Theoretical analysis of determining the determinants of demand and supply for higher education

Abstract

The paper considers the term «market of educational services» in the system of higher education. Using a comparative method, the determinants of demand and supply of educational services from the point of view of a market economy are investigated. The two main groups of factors of economic categories are defined as two separate tables that clearly demonstrate the similarity of education and economics. Among the key indicators of demand in this market is the number of entrants (consumers) who make their choice based on tangible and intangible preferences. The article also identifies the main factors influencing demand: the number of applicants, the place of universities in national and international rankings (reputation), university infrastructure, the prestige of the speciality, prices for educational services, related training costs, increasing demand specialists in the labor market, changes in final testing during the quarantine period and others. The main components for building the supply model are the number of higher education institutions (HEIs) and specialities on the market. Additionally, the supply models` components are the number of universities, other educational institutions, number of specialities and state orders in universities, costs of educational services, level of government funding and of scientific and technological progress, education policy (higher education standards), transition to distance learning in the period of quarantine, during the pandemic, the amount of funding for universities, deficit expectations (the birth rate, the dynamics of international emigration of families), etc. The paper recognizes that government and its policy affect the market situation in higher education significantly. Based on these results, the authors of this work developed recommendations for improving the higher education management in Ukraine, in particular, as an effective method of reducing labor emigration in Ukraine. The first recommendation is to increase the autonomy of universities and encourage them to cooperate with employers through reducing the percentage of curricula, as it will be updated with the help of labor market participants. The next guidance in the higher education system is an improvement of training areas for professional areas at a place of work and lifelong learning. Because consumers are not only graduates of schools and institutes, but also solvent elder individuals. The last piece of advice is an introduction of dual education with the support of employers.