Taken at face value, an increase in higher education access in a highly unequal country like Peru could be easily regarded as a positive outcome. A skilled labour force should create more income while more youngsters should be able to enjoy some degree of social mobility. This statement, however, assumes that higher education quality is independent of the process through which increased access is attained. In what follows, we document how the lack of regulation and information can create incentives for a process of higher education expansion that compromises the quality of this educational service.

In the last decade, the number of Peruvians between 19 and 22 years of age with completed secondary education rose by 38%. During this same period, their families enjoyed a 33% raise in per capita real income. This has led to a significant increase in the demand for higher education that has been accompanied by a rapid growth in the supply of private higher education. In fact, the number of private universities went from 29 to 65 between 1996 and 2010 [1] and has continued growing to the point that we can now count 81 private universities.

Larger demand accommodated by a raise in private supply has led to an increase in access to university education in Peru, and to a significant shift towards private enrolment. Between 2000 and 2010, the number of 19-22 year-olds enrolled in a university more than doubled (raised by 106%) and access rates went from 22% to 34%. In terms of composition, the proportion of those who access a private university grew from 9% to 18% (see Figure 1).

Source: own elaboration with ENAHO 2000 and 2010 data.

The nature of the process underlying this rapid response of private education supply has been heavily dependent on two characteristics of the Peruvian education system. The first one is that investment in the education sector is highly attractive because private education providers in Peru can operate under the same rules as private businesses [2]. The second characteristic is the absence of quality assurance mechanisms. There are no comprehensive or enforceable evaluations to authorize the creation of new higher education institutions, nor an accreditation system to guarantee continuous quality control [3].

A conservative definition of higher education quality should make reference to the effectiveness of higher education providers in conducting the process by which students develop professional skills. In principle, there are no reasons why private investment, per se, should hinder this effectiveness. However, in absence of regulation and information regarding higher education outcomes, for-profit institutions face strong incentives to maximize enrolment in the short run. In this regard, there are three phenomena that accompany the rapid increase in the supply of higher education in Peru, all of which are consistent with a profit-maximizing objective and conspire against the quality of educational services.

The first phenomenon is a decline in selectivity in admission processes. In fact, the proportion of applicants admitted into a university raised from 27% in year 2000 to 45% in 2009 [4]. It should be noted that the average admissions ratio for private universities has been around 75% throughout the last decade. During that same period, however, the number of applicants to these universities has triplicated (going from 68,533 in the year 2000, to 204,283 in 2009). In a country with especially poor basic education outcomes [5], it is difficult to reconcile these figures without suspecting a decline in the basic literacy and numeracy skills of the average university student. In the words of the Director of a Peruvian private university: “… if we use a more rigid profile to devise our admissions exams, we will be left with no students. What we have done is to accommodate our system to the profile of our applicants: a student with deficiencies” [6].

The second phenomenon is a shift in the average faculty composition towards more part-time lecturers and fewer full time professors. Currently, private universities concentrate 60% of total enrolment and full-time professors represent only 17% of their total faculty (in public universities this latter figure is 68%). As enrolment shifts towards private providers, there is a decline in research activity per student (which is already very low [7]) which, in turn, has a detrimental effect on the analytical content of courses and lectures. In addition, nearly half of all part-time lectures do not have an additional occupation so they lack the practical or job-related experience that could contribute to the process of professional skill formation.

The third phenomenon is a supply of degrees (and skills) that does not necessarily respond to the demands of the labour market. Business administration is currently the most popular career choice among high school graduates. Not surprisingly, 70 percent of the new private universities offer programmes in this area, despite the fact that more than one-third of graduates with this profession are underemployed (Castro and Yamada (2012b)).

One distinctive characteristic of educational services is that their quality cannot directly assessed by their “consumers”. This trait, together with the evidence discussed above, points towards the need for more decisive public action in the provision of information about higher education services and their labour market outcomes. In addition, stronger regulation and incentives for self-regulation (through an accreditation system, for example) are still in need.

1. National Institute of Statistics (INEI). University Census 1996 and 2010.

2. This is thanks to the enactment of Legislative Decree No. 882 back in 1996

3. More than 40% of private universities operate with a “provisional” authorization. This means that some of the official requirements established by the National Assembly of Rectors (Asamblea Nacional de Rectores - ANR) have not been fully met. In addition, many regional subsidiaries operate without any official permit. The National System for the Evaluation, Accreditation and Certification of Education Quality (SINEACE) was created by law in 2006. However, the higher education accreditation process has formally started only a couple of years ago and has still a very limited scope (Castro and Yamada, 2012a).

4. According the statistics provided by the National Assembly of Rectors (Asamblea Nacional de Rectores).

5. Peru ranked 63 and 64 out of 65 countries in the 2009 PISA evaluations in reading comprehension and mathematics, respectively. Only 13% of secondary students assessed were able to pass the level 3 threshold in reading comprehension (moderate complexity) against an average of 60% in OECD countries.

6. Fieldwork report of a qualitative study made in 2011 to assess the determinants of higher education quality in Peru: “Estudio Cualitativo sobre Atributos y Determinantes de la Calidad de la Educación Superior” (Apoyo Consultoria).

7. According to the 2010 University Census, only half of all full time professors had initiated a research project in the past two years. This figure falls down to 30% if we focus on private universities.

References

Castro J. F. and G. Yamada (2012a). ““Convexification” and “Deconvexification” of the
Peruvian Wage Profile: A Tale of Declining Education Quality”. Universidad del Pacifico Working Paper DD/12/02.

Castro J. F. and G. Yamada (2012b). “Declining Higher Education Quality Affects Postsecondary Choices: a Peruvian Case”, International Higher Education, Number 70.