The Provision of Higher Education in a Global World—Analysis and Policy Implications

Mobile students and graduates react to the institutional framework of higher education and on their turn induce changes in governmental policies. In this article, we are interested in how governmental decisions about the financial regime and the quality level of higher education interact with individual incentives to invest in higher education in closed economies and in economies open to migration. We show that mobility of (part of) the population results in a situation where the optimal instruments of the closed economy are no longer necessarily viable. The aim of the article is to derive policy implications as to the optimal financial regime and quality level of higher education in the presence of migration opportunities. (JEL codes: H77, I22, I28) Copyright , Oxford University Press.