More than 5 years have passed since March 2000 when the Lisbon European Council defined its strategic goal for the future decade, namely to“become the most competitive and dynamic knowledge-based society in the world, capable of sustainable economic growth with more and better jobs and greater cohesion.”And while this was planned to be achieved through a set of policy instruments, a significant improvement and increased investment into educational systems formed a cornerstone of the “Lisbon strategy”. It is widely acknowledged in theory and empirically proven that investment in human capital promotes economic growth and creates social returns for society as well as private returns to individuals. In order to realise these returns it is necessary, however, to devote significantly more resources to education and training. So how does the European education system compare to others in the world, which path should it take and how can future success be ensured? How can economic theory justify the investment in human capital? What can the European Union learn from the United States when reforming higher education?
Although the paper will not be able to provide definite answers to these questions, it will undertake an attempt towards pointing out the deficiencies of higher education in Europe and what policy instruments could help overcome these.
Table of Contents
1 Introduction
2 The Status Quo of European Higher Education
2.1 The European financing of higher education
2.2 Over-regulation and the role of government
2.3 The lack of social responsiveness
3 What is the Lisbon Strategy?
3.1 General Goals of the Lisbon Strategy
3.2 Reforming higher education within the Lisbon framework
3.3 The Bologna Declaration: a step into the right direction
4 Economic Background
4.1 Macroeconomics: Social Returns on investment in education
4.1.1 The production of goods
4.1.2 The accumulation of human capital
4.1.3 The impact of human capital on economic growth
4.1.4 Key findings and model results
4.2 Microeconomics: Private Returns on investment in education
4.2.1 Human Capital Theory
4.2.2 Empirical Evidence
4.3 Positive Externalities: Why public and private investment makes sense
5 What Europe can learn from the US
5.1 Funding
5.2 Organization
5.3 Competition
5.4 Meritocracy
6 Policy Implications: A Call for Tuitions in Europe
6.1 Tuition: an absolute necessity
6.2 Meritocracy and Competition
6.3 How to finance tuition for higher education
7 Conclusion
Research Objective and Key Themes
This paper examines the deficiencies of the European higher education system in relation to the goals set by the Lisbon Strategy. It evaluates the economic rationale for investing in higher education through both macroeconomic and microeconomic frameworks, compares the European model with the more successful United States system, and argues for policy reforms, specifically the introduction of tuition fees to improve university funding and performance.
- Analysis of the current status and structural problems of European universities.
- Economic justification for human capital investment and higher education funding.
- Comparative study between the US higher education system and European practices.
- Evaluation of policy measures, including meritocracy, competition, and student tuition.
Book Excerpt
2 The Status Quo of European Higher Education
In August 2005 the Jiao Tong University of Shanghai published the latest version of its “Academic Ranking of World Universities” and it did not contain any good news for the Europeans. As Table 1 shows, out of the world’s top 20 universities only two are European, namely Oxford and Cambridge, while 17 come from the US. For Germany the news is even more frustrating: The highest ranking academic institution in Germany is the Technical University of Munich that achieves an overall 52nd place in the survey.
Five years after the ambitious Lisbon goals have been called into existence, the results are disillusioning and the European Union and its member states do have to undertake significantly more in order not to fall further behind the United States while at the same time not being overtaken by the constantly improving Asian countries.
The reasons why Europe’s educational systems are lagging behind in such an obvious way differ from country to country, however, the three core problems are similar all across Europe with different levels of severity: firstly, European universities lack the funds necessary to provide students with a high quality education. This is often further exacerbated through an inefficient use of existing funds. Secondly, the institutions are highly over-regulated and government controlled and do not possess sufficient freedom with regard to choosing their own students, charging tuition, conducting research or maintaining copyrights and patents on successful research. Thirdly, the attainment level of higher education in Europe is insufficient with regard to managing the transition to a knowledge based economy. Accordingly a lack of social responsiveness persists.
Summary of Chapters
1 Introduction: Introduces the Lisbon Strategy's goal to make Europe the most competitive knowledge-based society and outlines the need for human capital investment.
2 The Status Quo of European Higher Education: Identifies critical weaknesses in European universities, including underfunding, over-regulation, and insufficient social responsiveness.
3 What is the Lisbon Strategy?: Details the goals set by the European Council in 2000 and discusses specific efforts to reform higher education, including the Bologna Declaration.
4 Economic Background: Provides the theoretical justification for investing in higher education using the Uzawa-Lucas growth model and microeconomic theories of private returns.
5 What Europe can learn from the US: Highlights the US model's strengths, focusing on diverse funding sources, institutional organization, competition, and meritocracy.
6 Policy Implications: A Call for Tuitions in Europe: Argues that EU member states must introduce tuition fees and reform funding structures to achieve global competitiveness.
7 Conclusion: Summarizes the urgency of educational reform in Europe to maintain economic growth and prosperity in a globalized, fast-paced world.
Keywords
Lisbon Strategy, Higher Education, Human Capital, Economic Growth, University Funding, Tuition Fees, European Union, United States, Meritocracy, Competition, Uzawa-Lucas Model, Knowledge-based Economy, Policy Reform, Tertiary Education.
Frequently Asked Questions
What is the primary objective of this paper?
The paper aims to highlight the shortcomings of the European higher education system and proposes policy shifts, specifically the introduction of tuition fees, to align with the competitive goals of the Lisbon Strategy.
What are the main thematic areas covered?
The study covers the status of European universities, macroeconomic and microeconomic theories regarding human capital, a comparison with the US higher education system, and specific policy recommendations for the EU.
Which economic model is used to explain the social returns on education?
The paper utilizes the Uzawa-Lucas growth model to demonstrate how investing in human capital, through education and training, drives long-term economic growth.
What role does the US higher education system play in this analysis?
The US system serves as a benchmark for excellence, demonstrating how high funding levels, organizational autonomy, competition, and meritocracy lead to superior academic and research outcomes.
What are the identified core problems of European higher education?
The core problems identified are a lack of sufficient funding, excessive government regulation and control, and an overall insufficient attainment level that limits social responsiveness.
How is the concept of meritocracy linked to higher education?
Meritocracy is presented as a principle where ability outweighs privilege; the authors argue it should be deeply integrated into the European system to incentivize performance and ensure the efficient allocation of resources.
Why do the authors argue that "tuition is an absolute necessity"?
They argue that current funding models based almost exclusively on public sources create disincentives for efficiency and that charging tuition, aligned with the theory of positive externalities, is necessary to bridge the funding gap between the EU and the US.
How does the Bologna Declaration relate to the Lisbon Strategy?
The Bologna Declaration is described as a forerunner to the Lisbon Strategy in the context of education, as it established a framework for harmonized, comparable degree structures across Europe to facilitate mobility.
- Arbeit zitieren
- Oliver Dachsel (Autor:in), Christopher Hagedorn (Autor:in), Isabel Goicoechea (Autor:in), Elisabeth Gamecho (Autor:in), 2005, The Lisbon Strategy - The Role of Education, München, GRIN Verlag, https://www.hausarbeiten.de/document/56955
