The rationale for higher education investments

The rationale for higher education investments

This working paper contributes to the debate around the financing of higher education and calls for a fair distribution of the costs of higher education between the private sector (including students and their families) and the public sector, allocated according to the ratio of private and public benefits and externalities that it generates. In particular, it indicates that approximately half of the benefits derived from higher education are private while the other half are social benefits and public externalities. However, several bottlenecks and inefficiencies limit the benefits generated by higher education institutions in Latin America. Overcoming these limitations will be critical to strengthening the impact and benefits of higher education, as well as to legitimating a more balanced funding pattern from public and private sources.