The Bologna Process: How student mobility affects multi-cultural skills and educational quality

We analyze the two goals behind the European Bologna Process of increasing student mobility: enabling graduates to develop multi--cultural skills and increasing the quality of universities. We isolate three effects: 1) a competition effect that raises quality; 2) a free rider effect that lowers quality; 3) a composition effect that influences the relative strengths of the two previous effects. The effects lead to a trade--off between the two goals. Full mobility may be optimal, only when externalities are high. In this case, student mobility yields inefficiently high educational quality. For more moderate externalities partial mobility is optimal and yields an inefficiently low quality of education.