On Perfect Information And Equilibrium Of Supply And Demand In Higher Education

Many studies on the supply and demand of higher education ideally ass抲nied that the education market is a place with perfect information, while in fact, the imperfection of information and the abnormality of education market are always important factors effecting the equilibrium of the education supply and demand. This paper will focus on the education supply and demand in a perspective of education information. According to the fundamental principles of education economics and information economics, and based on the conception of education information, the thesis makes a deep inquiry into the mechanism of the influence of imperfect information on the system of education supply and demand from the angles of educational benefits and educational costs respectively. The thesis consists of four parts: Part one briefly introduces basic theories in information economics and education information. Information economics is one of the economic subjects on how to reduce or eliminate the uncertain effects under the conditions of imperfect and asymmetrical infonnation. People in the world are facing the imperfect information all the time, so do the suppliers and the demanders in education. Education information is the knowledge differences in transferring, and it refers to the information at the levels of educational costs and educational benefits. In part two, based on the systematic picture of higher education supply and demand, with a lot of factual materials, the author states the disequilibrium between higher education supply and demand nowadays, such as the coexistence of high consumption and shortage of qualified personnel, the infinite inflation of individual demand for higher education, and the structural disequilibrium during the expansion of higher education. In part three, the thesis analyses the inner relationship between the information in labor market, the cost of education information and the education market in the perspectives of educational benefits and costs. It is claimed that the segmented labor market information is the main cause to total amount disequilibrium, and so is the twisted education information cost to structural disequilibrium in higher education. The paper also discusses the profound institutional causes underlying the imperfect labor market information and educational costs. On the basis of the comparison of traditional concepts of educational costs, the author also addresses an important concept here: education information cost. The current concepts of educational cost are based on the assumption of perfect education information, including direct and indirect cost (opportunity cost), while the introduction of the concept of education information cost, by exposing the reality of imperfect education information, attempts to reveal the costs that actually exist but are often ignored in education supply and demand, e.g. transfer cost in education. The explanation of the disequilibrium between education supply and demand from such a new perspective may not be perfect, but the effort is worthwhile. In part four, the paper addresses some countermeasures and suggestions to realize the equilibrium of higher education from the angle of perfect information: 1. The government should set up an effective market of education information to reduce the imperfect information; 2. To break up the institutional rampart in labor market to adjust its twisted information; 3. To recover the nature of education p...