At a Crossroads: Higher Education in Latin America and the Caribbean

At a Crossroads: Higher Education in Latin America and the Caribbean


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Higher education (HE) in Latin America and the Caribbean (LAC) has expanded dramatically in the last fifteen years, as the average gross enrollment rate has grown from 21% to 43% between 2000 and 2013, and many new institutions and programs have opened. While HE access has become more equitable, and HE supply has become more varied, many of the system's "new" students are, on average, less academically ready than their more advantaged counterparts. Furthermore, only half of HE students, on average, complete their degree; while still high, labor market returns to HE are declining, and vary greatly across institutions and programs. Thus, HE is at a crossroads today. Given the region's urgency to raise productivity in a low-growth, fiscally constrained environment, going past this crossroads requires the formation of skilled human capital fast and efficiently. This volume contributes to the discussion by studying quality, variety, and equity of HE in LAC. The volume presents comprehensive evidence on the recent HE expansion and evolution of HE labor market returns. Using novel data and state-of-the-art methods, it studies demand- and supply- drivers of the recent expansion. It investigates the behavior of institutions and students, and explores the unintended consequences of large-scale HE policies. Framing the analysis are the singular characteristics of the HE market, and the market segmentation induced by the variety of students and institutions in the system. At this crossroads, a role emerges for incentives, information, accountability, and choice.

Product Details

ISBN-13: 9781464810145
Publisher: World Bank Publications
Publication date: 05/25/2017
Series: Directions in Development
Pages: 300
Product dimensions: 7.00(w) x 10.00(h) x 0.63(d)

Table of Contents

Acknowledgments xvii

About the Authors xix

Abbreviations xxi

Overview 1

Students, Institutions, and the Policy Maker 3

Some Stylized Facts 6

Lessons Learned 24

Some Policy Considerations 30

Structure of the Report 35

Notes 36

References 37

Introduction 39

Students, Institutions, and the Policy Maker 41

Structure of the Report 44

Notes 45

References 45

Chapter 1 The Rapid Expansion of Higher Education in the New Century Ciro Avitabile 47

Abstract 47

Introduction 47

Trends in the Share of Skilled Labor Force, Higher Education Enrollment, and Completion Rates 48

"New" Students in the Higher Education System 54

Spending in Higher Education 57

Private Returns to Higher Education in Latin America and the Caribbean 61

Social Returns and Costs of Higher Education 64

Intergenerational Spillover of Higher Education 65

Short Window of Opportunity 67

Annex 1A Higher Education Enrollment Expansion and GDP Growth 68

Annex 1B Net Enrollment Rate, circa 2000 and 2013 69

Annex 1C Cognitive and Noncognitive Skills, by Level of Education 69

Annex 1D Role of Cognitive and Noncognitive Skills in the Higher Education Premium 70

Annex 1E Wage Dispersion, by Education Level, circa 2014 71

Annex 1F Trust, by Education Level 71

Annex 1G Political Participation, by Education Level 72

Notes 72

References 73

Chapter 2 Equity, Quality, and Variety of Higher Education Francisco Haimovich Paz 77

Abstract 77

Introduction 77

Equity 78

Quality 91

Variety 99

Annex 2A Decomposing Access Gaps to Education 104

Annex 2B Measuring Inequality in Access to Higher Education with the Gini Coefficient 106

Annex 2C Estimating the Re-distributive Effect of Public Spending in Higher Education 107

Annex 2D Change in Graduate Field Shares, Selected Latin American and Caribbean Countries, circa 2000-13 109

Notes 110

References 112

Chapter 3 The Economic Impact of Higher Education Sergio Urzúa 115

Abstract 115

Introduction 115

Economic Impact of Higher Education 117

Tuition and Opportunity Costs and the Impact of Higher Education on Lifetime Earnings 123

Implications for Financing Higher Education in Latin America 139

Conclusions 140

Annex 3A Methodology 141

Annex 3B Mincer and Employment Regressions in Chile 142

Annex 3C Missing Data Estimation 143

Notes 144

References 146

Chapter 4 The Demand Side of the Higher Education Expansion María Marta Ferreyra 149

Abstract 149

Introduction 149

Variety of Admission and Funding Mechanisms in the Region 150

Role of Recent Access-Expanding Policies 153

Increased Access for Whom, and to What? 154

Unintended Effects of Demand-Related Policy Interventions 170

Conclusions 185

Annex 4A Admission Mechanisms in Latin America and the Caribbean 186

Annex 4B Student Funding Mechanisms in Latin America and the Caribbean 188

Annex 4C Higher Education and Labor Market Statistics for the United States, Brazil, and Colombia 192

Notes 193

References 195

Chapter 5 The Supply Side of The Higher Education Expansion María Marta Ferreyra 199

Abstract 199

Introduction 199

Supply Expansion in the Region 200

Expansion Strategies and Student Sorting in Colombia 210

Expansion, "Business Stealing," and Ability Peer Effects in Chile 217

Students Loans and Supply Expansion in Chile 224

Conclusions 225

Annex 5A Sources of Administrative Information, about Number of HEIs, Programs and Enrollment 226

Annex 5B HEIs in the University and Nonuniversity Sectors 227

Notes 228

References 229

Chapter 6 The Current Landscape of Policies and Institutions for Higher Education Javier Botero Álvarez 231

Abstract 231

Vision for Higher Education 231

System Steering through Regulatory Framework and Special Financing Mechanisms 233

Governance of the Higher Education System and Its Institutions 248

Recent Reforms 256

Conclusions 258

Annex 6A Participation in Survey among Higher Education Authorities, May and September 2015 259

Notes 260

References 261

Chapter 7 Going Forward 263

Abstract 263

Introduction 263

Back to the Drawing Board 264

Trade-Offs between Higher Education Access and Completion 265

Role of Incentives, Competition, Monitoring, and Information 266

Higher Education and the Larger Context 270

Note 270

References 270

Glossary 271


2.1 Improving Access to Higher Education in Brazil Chile, and Honduras 88

2.2 Redistributive Effects of Public Spending in Higher Education 90

3.1 The Mincer Regression 117

3.2 Net Returns to Higher Education on Lifetime Earnings 124

3.3 Net Returns to Higher Education on Lifetime Earnings 126

3.4 Empirical Association between Net Returns and Accreditation Status 137

4.1 Funding Mechanisms Supporting the Ongoing and Future Expansions 151

4.2 Structural Models in Policy Analysis 171

5.1 Unintended Consequences: Tuition Increases and For-Profit Institutions in Brazil 202

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