French Higher Ed: Higher Participation, Lower Retention and Rewards
Subject Capital markets
Topic Income Distribution and Poverty
Key Words Education, tuition, human capital
News Story

France moved from an elite to a mass system of education in the 1980s. The proportion of school-leavers going on to higher education has since increased from 30 to 58 percent. People who would not have considered a university education previously are now becoming students.

However, the universities are now more crowded, classes larger, teachers often untrained, and equipment obsolete. Moreover, of those going to college, only 80 percent finish their degrees within five years. Degrees in France should take only two years to complete, but only 45 percent of students do so. Many have difficulty transitioning to university. They find that courses are more difficult than anticipated, or fail to work hard, or lack interest in their courses of study, resulting in failure or dropping out, at least temporarily. This can be expensive: the average tuition for a year is $5,000.

Disappointment abounds after graduation. While twenty years ago, a degree would have led to a position in middle management, it now does little more than lead to blue-collar work. Employers see little difference between high school leavers and degree-holders, unless they have a postgraduate degree. Postgraduate education is only available to the brightest, however.

The U.K. Government expects the proportion of school-leavers going to university to increase from 32 percent to 50 percent by 2010. There is concern that some of the problems experienced by the French may arise in the U.K.

(Updated May 6, 2002)

1. More French school-leavers are deciding to go to university.
a) In what way have the perceived costs of going to college been reduced since the 1980s?
b) Why might the perceived benefits have increased?
2. Some students decide to drop out of university. Explain this in terms of an economically rational decision to stop investing in college. Refer to the elements in the investment calculation, especially the perceived benefits, costs, and time period.
3. The massification of higher education is said to have reduced the benefits that can be expected from a first degree.
a) Draw a supply and demand diagram of the market for middle management. Show the effect of more graduates seeking employment as middle managers on the equilibrium wage and employment level.
b) Mark the increase in labor supply at the original wage rate. Compare it with the change in employment. What is the difference? What happens to those people?
4. Postgraduate study is reported to enhance earnings prospects. Why don't more people choose to invest in it? Again, refer to the investment calculation.
Source Adam Sage and Martin Stephen, "French lessons," The Times, January 17, 2002.

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