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Higher education institutions. Empirical essays on student exchange programs and competitive research funding

This doctoral dissertation focuses on two core missions of Higher Education Institutions (HEIs): education and research. We approach these from the individual perspective, focusing on both the student and the researcher. The first part of the thesis deals with the university's education mission. The core aspects of education are lectures and training, which are expected to increase a student's skills and competences, thereby raising her human capital (Becker, 1964). Traditionally, these lectures are offered by the student's home institution. However, more and more universities offer students the possibility to leave on exchange and take courses at a partner institute; the underlying idea being to increase students’ understanding of other cultures, improve language skills and broaden students’ social horizon (European Commission, 2015).

The first two essays investigate whether participation in exchange has a positive effect on students’ human capital. Essay 1 studies the effect of participation in international exchange on students’ academic performance. We construct a dataset containing detailed information on 5,138 students, among whom 950 (18.5%) went on exchange. To deal with observed and unobserved differences between mobile and non-mobile students, we use a conditional difference-in-difference set-up. Our results indicate that, on average, exchange students’ grades decrease significantly, relative to non-mobile peers. The treatment effect is heterogeneous, showing a more positive impact for Erasmus exchange, and for students leaving for a destination that is not better ranked than her home Faculty.

The second essay investigates the effect of participation in exchange on students’ labor market outcomes, in terms of employment probability and gross monthly salary levels. Our database contains 1,027 students, among whom 249 (24%) participated in exchange. As we believe that mobile students differ from non-mobile peers in terms of motivation and ability, we apply an instrumental variable (IV) approach, where we follow Parey and Waldinger (2011) and Di Pietro (2012, 2015) and instrument exchange with the exposure to exchange. We find that participation in exchange has no positive impact on students’ labor market outcomes, one year after graduation. The OLS outcomes reveal that former mobile students are 12% less likely to have a job. The coefficient with the IV estimation is even larger in magnitude, but insignificant because of large standard errors. Further analysis reveals that exchange students are more likely to enter further education (i.e. register for another Master’s or Advanced Master’s degree) compared to non-mobile students. As indicated by Brandenburg et al. (2014) exchange enhances students’ curiosity, which might increase the likelihood of pursuing additional education. Turning to the results on gross monthly salary levels, we observe a positive relationship between exchange and salary, conditional on being employed. The findings do not reflect a causal impact, but suggest that exchange is correlated with unobserved students’ characteristics that exert a positive impact on salary levels. 

The final part of this thesis looks at universities’ research mission. Ever since the development of the Humboldtian model of education is research an important aspect in HEIs. Recent decades, however, have seen a change in funding of university-based research, with funding being increasingly allocated on the basis of performance (Geuna, 2003; Auranen and Nieminen, 2010; Hicks, 2012), which builds on the idea that competition increases efficiency and productivity levels (Johnes and Johnes, 1995; Auranen and Nieminen, 2010). One example of performance-based funding is competitive research funding, where researchers compete for public grants. These grants are the main subject of the third essay.

In order to deal with the non-random assignment of funding, we apply a regression discontinuity design, where we restrict the estimation sample to applicants whose application grade is at the cutoff value. The final sample contains 325 researchers, 150 got granted. For each researcher we look at publications seven years before and seven years after treatment.

Our results suggest that competitive funding has a positive impact on researchers’ productivity. On average, grant receipt increases the number of publications with 9%, or one additional paper every four to five years. Since the average researcher publishes 0.8 papers a year pre-treatment, this appears to be a considerable effect. Competitive funding also raises the number of citation-weighted publications with 21%. We find an increasingly positive impact of grant receipt over time, which is significant from the fourth year after application onwards. Heterogeneity in returns reveals differences in outcomes according to the field of research and the researcher’s life cycle. We observe a more positive effect for scientists active in the area of Natural Sciences and Engineering and for more senior researchers.

Date:1 Jul 2014 →  20 Sep 2018
Keywords:Competitive research funding, International student exchange programs
Disciplines:Applied economics, Economic history, Macroeconomics and monetary economics, Microeconomics, Tourism
Project type:PhD project