Student based funding in higher education systems with declining and uncertain enrolments: the Portuguese case

Higher education systems have generally been adapting to increasing demand, higher quality requirements and severe financial constraints. In Portugal, where public funding critically depends on the new enrolments, the short term uncertainties of declining applications exacerbate systemic long term underfunding certainties. Unfavourable demographics explain most, but not all, recent negative trends in demand for higher education. In such uncertain context strategic planning is difficult, and predicting new enrolments, and thus the volume of public funds, became a new and major challenge for universities. This paper proposes an empirical analysis of demand's main determinants, allowing a more precise picture of future enrolments and funding.