How Efficient Is the Allocation of University Places in Germany? - "Universities Must Be Incentivised to Allocate University Places Centrally"

The crowds are large, the lecture halls are full to bursting, and yet in 2015, many university places remained unfilled at German universities. Getting hold of an attractive university place therefore is fraught with hurdles for many applicants. Dr. Vitali Gretschko, head of the ZEW Research Group "Market Design", explains how the allocation of university places in Germany could be made more systematic whilst also being better adapted to individual universities and applicants.

What exactly is the issue when it comes to allocating university places for subjects with a limited number of places at certain universities?

Many universities do not take part in the centralised admissions procedure, the so-called "dialogue-orientated service procedure" (Dialogorientierte Serviceverfahren). Instead they choose to continue selecting applicants via their own local selection processes. This not only slows the admissions procedure, but also means that many applicants tend not to receive an offer from their preferred place of study, even though this would be the case in a coordinated admissions process. In addition, many applicants find themselves needing to make parallel applications to several universities due to the fact that many universities have their own specific admissions procedures. Applicants are therefore unable to indicate which universities they find particularly attractive, and which universities they are less interested in. Due to these circumstances, along with the fact that university places are primarily allocated on the basis of applicants' grades, some applicants receive offers from several universities, whilst other candidates do not receive any offers at all. In the best case scenario, applicants who receive an offer from their preferred university accept this straight away, thereby freeing up places offered to them by other universities for other potential applicants. Applicants who do not receive an offer from their first-choice university, however, are unsure whether or not they should accept one of the other offers, or whether they might receive a better one. This delays the acceptance process and means that some applicants unnecessarily accept worse offers than they need to. At the same time, university places which are in fact highly desirable remain unfilled. Universities therefore have an incentive to offer considerably more university places than are actually available for a given course and indulge in unnecessary risk planning.

On what grounds would it be beneficial for all universities to take part in the centralised admissions procedure?

The main advantage of the centralised admissions procedure is that it avoids delays in the acceptance process and prevents universities from overfilling courses. Applicants submit a list of universities, ordered according to preference, and the central allocation system uses an algorithm, that is, an exact predefined procedure, to allocate the best possible university place to the applicant as quickly as possible.

Can students be confident that this algorithm will give them the best possible result?

Provided that students have been truthful in listing their preferred universities, the "dialogue-orientated service procedure" is practically always able to allocate the best possible university place to applicants. This has the considerable advantage that applicants are unable to strategically outfox the algorithm in order to better their own chances in comparison to those of other applicants.

And what would an improved allocation system actually look like?

In the first instance, the "dialogue-orientated service procedure" increases the chance that an applicant will receive an offer of a university place at his or her preferred university. Secondly, such a system gives universities the freedom to implement individual criteria when selecting their students. It is therefore to be hoped that more universities will participate in the centralised admissions procedure. From this perspective, it is rather unfortunate that universities which have not taken part in the centralised procedure for the main allocation process are nevertheless subsequently able to take part in the centrally-run ballot process via which any remaining university places are allocated. This significantly decreases the incentive for universities to participate in the centralised system for the main admissions procedure. From the point of view of applicants, it is also unfortunate that offers can already be accepted during the initial coordination phase. This can mean that poorly informed applicants accept a relatively bad offer. In addition, there's the question of why a difference is being made between courses which have a limited number of places at certain universities and courses such as medicine, veterinary medicine, dentistry and pharmacy when it comes to the allocation of university places. Places for the latter-named courses have been allocated via a centralised procedure for years, a procedure which is somewhat different to the dialogue-orientated procedure. The algorithm used in this system makes it disadvantageous for applicants to truthfully list their preferred universities. This results in strategic application behaviours, which in turn lead to uncertainty and inefficiencies.