Efficiency and effectiveness of public expenditure on tertiary education in the EU

Tertiary education has a very strong influence on economic and productivity growth. It is at the core of the Europe 2020 strategy and Member States recognise a strong need for highly qualified labour. As populations are ageing, raising labour productivity increasingly becomes the efficient way to maintain standards of living. At the same time, it has become more urgent to improve the quality of public finances in view of the need for budget consolidation across the EU and since tertiary education expenditure accounts for a sizable share of public expenditure, increased scrutiny is required to monitor the efficiency and effectiveness of expenditure and assist in the definition of priorities, notably to identify areas that may enhance future growth.

Following the mandate of the Economic Policy Committee, the Working Group on Quality of Public Finances and the European Commission fruitfully collaborated on the evaluation of the efficiency and effectiveness of expenditure on tertiary education. The report reviews the main lessons from the economic literature on education and reviews the main trends in tertiary education, based on the statistical information available. It then presents the institutions of tertiary education systems across the EU and draws the lessons from country experience. Finally, the main policy challenges on tertiary education are also identified around three major issues :

+ Mass opening versus quality
+ Education versus research
+ Autonomy versus accountability

A comprehensive annex includes two sets of individual country fiches prepared by Member States and the Commission. Each fiche describes the tertiary education system, and the explanatory factors for efficiency (in particular staff policies, evaluation and funding rules), the impact on employability and finally the recent and planned reforms.