Regulation of University Admission Quotas in Metropolitan Areas and the Competition between Universities

Abstract

The excessive demand for universities in metropolitan areas as a result of location premiums and regulated admission quotas diminishes the competition between universities and the incentive to enhance educational performance to attract more students. Case in point are the lower graduate employment rates (measure of educational performance) of universities in metropolitan areas compared to those in non-metropolitan areas despite higher quality students. Additionally, the graduate employment rate of non-metropolitan universities are influenced by educational input factors such as an increase in the percentage of courses taught by full-time faculty while that of metropolitan universities are contingent merely on enrollees’ entrance scores. Ergo, a structure that revitalizes the competition between universities and encourages them to improve their education services must be established in order to enhance the quality of higher education.