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Regular version of the site

Principles of streamlining mechanisms of state financing of higher vocational education

2007
Department: Centre for Financial and Economic Decisions in Education

The last decades of the 20th century and the beginning of the new millennium have been characterized by reforms of the education system  in almost all countries. The issue of efficient investment of public funds in ensuring the accessibility of quality higher education as well as aligning specialist training with labor market needs have become key points on the agenda. The purpose of this project is to study the principles of streamlining mechanisms of public funding of higher vocational education and training.

The uniqueness of the work consists in building a model of an efficient combination of financial mechanisms that facilitate the realization of an effective strategy of public participation in ensuring a competitive level of higher professional education development and its integration with science.

This research was based on the results of previous estimated testing of differentiated normative financing models (State Nominal Financial Obligations, SNFO) and flat-scale normative financing, benefit and loss analysis of higher education institutions depending on their position in the educational service market, their profile, management efficiency, and a number of other research works.

The information base for the research included:

  • reports on budget performance in financing higher professional education, including development programs;
  • statistical forms of 3-NK federal reporting for higher vocational education institutions;
  • data on the extra-budgetary income of institutions, collected in the course of previous studies;
  • statistics for higher education enrolment competitions;
  • average scores of the State Unified Examination (SUE) of applicants to different types of higher education institutions, considered as an indicator of an institution’s prestige value and its positioning in the educational service and research market;
  • ratings of higher education institutions and results of monitoring of the economics of education, compiled by SU-HSE.

In the course of the research, we confirmed the hypothesis about the non-linear nature of the influence of direct and indirect forms of state higher vocational education financing on strong, average and weak institutions. Direct forms include budget subventions and subsidies to perform government orders for employee training, subsidies to reimburse capital expenses, property insurance expenses, funds allocated to higher education institutions through tenders to realize programs of development and innovation. Indirect forms include tax benefits and exemptions, tax deductions, budget financing of information support, rating and facilitation of institution branding as factors of their investment appeal and prestige value.

The research showed the different efficiency of using differentiated (step) and flat scales in applying mechanisms of normative financing. Model estimates revealed the optimal ratio of attributive characteristics affecting the amount of higher vocational education financing for various areas of training. We also formulated principles for streamlining the mechanisms of state funding of higher vocational education.

In the course of the research, we developed a concept of streamlining mechanisms of public financing of higher professional education. We evaluated the relationship between the sources of institution financing and the quality of its educational services. We developed an integrated model of state financing of higher vocational education.

We have prepared an information base that facilitates testing the results of streamlining budget financing mechanisms in higher vocational education sector. We have developed a program-information module that allows the collection and processing of data required for further analysis and calculations.