The Scope of Higher Education – Who Decides?

Deciding on the number of students accepted into programs at Swedish universities constitutes a complex process seen by many as difficult to get a grip on. Is it the result of student demand? The number of staff at higher education institutions (HEIs)? Political preferences? Or perhaps the needs of the labor market? In this report, Mats Bergman, professor of economics at Södertörn University, describes what the process of determining the scope of the educational offer looks like while also discussing previous approaches. The author also presents research in economics on how the scope of higher education is determined. On the basis of this, he arrives at a number of recommendations on how to improve governance in Sweden.

RESULTS AND CONCLUSIONS OF THE REPORT

• According to the current governance model, the board or president of HEIs typically distribute the education budget between the different faculties, which, in turn, allocate funding to the different departments. These generally enjoy quite a high level of freedom to, within their budget, decide on the number of students admitted to existing programs. This year’s allocation is largely determined by last year’s educational offer. The number of applicants does not seem to affect the allocation of funding to HEIs and only to a limited extent how HEIs distribute funds between faculties.
• Political budget decisions determine how funds are allocated to HEIs and thus between technology-intensive HEIs and others, as well as the distribution between old and new HEIs. In addition, there is also direct political control in terms of the number of students being admitted to health care and education programs.
• Some 60 percent of students admitted to an HEI are admitted to their first choice. All applicants are also admitted to about half of all programs and the majority of stand-alone courses. A few major programs exhibit a high number of applicants, such as programs where you become a psychologist, physician, veterinarian, architect, lawyer or physiotherapist. As the number of admitted students increases in relation to the number of applicants, decision-making power is transferred from politicians and HEIs to students.
• The labor market has a limited direct impact on the educational offer. However, an indirect form of influence exists through political decisions regarding the budget and through student choices, as the labor market situation to some extent affects the choice of what to study.

RECOMMENDATIONS IN THE REPORT

• The educational offer should mainly be determined according to the current model – by decisions at the respective HEIs within the framework of a budget decided at the political level.
• However, the number of applicants to an HEI and the labor market outcomes of its alumni should to some extent affect the budget allocation.
• Do not give the parties in the labor market direct influence over the educational offer.
• Do not broaden the objectives for higher education as proposed by the Swedish Government Official Report (SOU 2019:6).
• Instead, consider moving toward broader programs where students specialize at a later stage.
• Continue utilizing political control to increase admissions to programs resulting in certified professions in education and health care.
• Consider stimulating the number of applicants to education and health care programs by forgiving student loans after having worked in the profession for some time. Also consider (more) specialized HEIs focusing on these areas.
• Use the education premium (expected salary) as a starting point for study counseling instead of the survey-based forecasts regarding the expected employment situation commonly used today.

AUTHOR

Mats Bergman, professor of economics at Södertörn University.