Disentangling the Reform Gridlock: Higher Education in Germany. CES Germany & Europe Working Papers, No. 02.7, 2002

For more than a decade, bemoaning the many roadblocks to reforming important aspect of German politics has become commonplace. Explanations emphasize formal and informal veto points, such as the role of political institutions and the lack of elite and societal support for reform initiatives. Against this background, I was interested in factors that place policy issues on the political agenda and follow up with concrete courses of action; i.e., in factors that lead to a disentangling of the reform gridlock. I emphasize the importance of agenda setting in the emergence of higher education reform in Germany. Globalization, European integration and domestic pressures combined to create new pressures for change. In response, an advocacy coalition of old and new political actors has introduced a drawn-out and ongoing process of value reorientation in the direction of competition, including international competition, and greater autonomy. The result has been a burst of activities, some moderate, some more far-reaching in their potential to restructure German higher education.

Does the growth in higher education mean a decline in the quality of degrees? CEPS Working Document No. 405/March 2015

In this paper the authors construct a theory about how the expansion of higher education could be associated with several factors that indicate a decline in the quality of degrees. They assume that the expansion of tertiary education takes place through three channels, and show how these channels are likely to reduce average study time, lower academic requirements and average wages, and inflate grades. First, universities have an incentive to increase their student body through public and private funding schemes beyond a level at which they can keep their academic requirements high. Second, due to skill-biased technological change, employers have an incentive to recruit staff with a higher education degree. Third, students have an incentive to acquire a college degree due to employers’ preferences for such qualifications; the university application procedures; and through the growing social value placed on education. The authors develop a parsimonious dynamic model in which a student, a college and an employer repeatedly make decisions about requirement levels, performance and wage levels. Their model shows that if i) universities have the incentive to decrease entrance requirements, ii) employers are more likely to employ staff with a higher education degree and iii) all types of students enrol in colleges, the final grade will not necessarily induce weaker students to study more to catch up with more able students. In order to re-establish a quality-guarantee mechanism, entrance requirements should be set at a higher level.