Higher education efficiency analysis: Evidence from Latin America

Abstract

Efficiency in higher education is a key indicator, especially for public funded universities to secure the resources they need. This study analyses higher education inefficiency with a sample of 100 institutions of four Latin American countries. A two stage Simar and Wilson procedure is used to first obtain scores for research and academic inefficiency and in the second stage to assess the impact of several variables such as province GDP, budget and university age on both inefficiency scores. The results show that both research and academic inefficiency are negatively associated with budget and university age. However, province GDP is negatively associated to research inefficiency but positively related to academic inefficiency. Public policy should prioritize the development of internal institutional capacity through multi-year funding frameworks that are connected to improved efficiency in both research and teaching.