Try, Try Again: Higher Education and Theory of the Second Best

by John Holbo on October 25, 2012

My first post got some good comments and some angry responses that seem to me somewhat to miss the point, but that is probably the fault of my questionable Club Med analogy, and also the fact that I wasn’t upfront enough about how I am thinking very much in second best terms, on the assumption that first best isn’t in the table. Let me try to clarify.

Some commenters objected to Club Med as an analogy because their kids are living in crummy dorms, and their schools don’t have a lot of fancy schmancy rock climbing walls in the gym – or any gym at all that you can go to without paying an extra membership fee. Fair enough. (In my defense, some schools are taking this route. Competing to have the best climbing walls, etc. But I waive this defense. It isn’t the case that the story of contemporary higher education is the story of too many climbing walls in the gym.) I’ve never been to Club Med myself but my understanding is that it’s a fun place where you can do a lot of fun activities, and it costs a lot of money. That was the level at which I intended the comparison to operate: the nice thing about college isn’t the dorm rooms, probably, but all the nice things you can do. There are tons of classes you can take, most notably. There’s also a library and some other stuff. But why not compare college to prison (since the dorm room is as crummy as a prison cell, and you don’t have a private bathroom)? Or the army? Yes, fine. Let these be our comparisons. They will not refute my point but confirm it by other means. If prisoners had to pay for their own incarceration for four years, it would cost them a lot of money. They would ‘graduate’ from prison in serious debt, probably (despite having lived in a crummy grey box). If soldiers had to pay for their own equipment and training, it wouldn’t be cheap. I take it the force of these analogies is supposed to be: but it would be absurd to make prisoners pay for their imprisonment, or soldiers pay for their own training. We shouldn’t make students pay their own way either. Yes, I quite agree. Henry linked in comments to a great piece about the death of the UC system. If US society were politically wise and good, it would reaffirm the commitment that California once made to its young people – no longer. Unfortunately, the US seems determined to do the unwise and bad thing instead. So the question my post asked is: what is the least bad way for the unwise and bad thing to go down?

You could, of course, say the thing to do is scream to the heavens that this thing is unwise and bad. I should have done a bit more of that in the first post. We want higher education to be an engine of virtuous meritocracy but also an engine of democracy. We want people to be upwardly mobile, thanks to education. But we also want the absolute numbers of people who get higher degrees to go up and up. More state support not less would be a good investment and, furthermore, the right thing to do. Such are my beliefs.

That said, you still have to think about second best if you don’t think you are going to get first best.

My basic thought – which my ill-fated Club Med analogy was intended to support: but instead we detoured through prison and the army – is that the paradigm college experience is just plain going to cost a lot. Four years being a full-time student at a residential college, say. That’s not going to come cheap. We shouldn’t beat our brains out about how we can do this thing inexpensively any more than we should beat our brains out about how we could make Club Med cheap, or how we could incarcerate people more cheaply. Or how we should be able to train soldiers, as well as we do now, but at half the cost. There isn’t some conspiracy to artificially inflate the cost of college. We could do different things. That might cost less. (Incarcerate fewer people, or just make them wear ankle thingies rather than living in a concrete box.) But there isn’t any reason to think we can do substantially the same things we already are, just at much lower cost. This is clearly a source of sincere disagreement in comments. Some people think that the rate at which college costs have gone up means that there must be some way to pop the cost bubble and dramatically lower costs back down without sacrificing quality. There’s some conspiracy of incompetence or venality by the administrators/teachers. We need to break the back of that, whatever it is, then things would get better. I don’t really think that’s plausible, but if you think it’s plausible, go ahead and work out your own solution to the problem along those lines.

College is a premium product. A costly good. But a valuable one we want people to have. If the state isn’t going to subsidize its provision, making it available to all, then how will it go?

Option 1: everyone who isn’t rich goes into serious debt to pay for this costly but valuable good.

Option 2: we devise a less premium product. It won’t be as good, but it will cost less.

I distrust Option 1. In fact, I’m paranoid about it, for reasons outlined in this article. I don’t quite drink the full jug of kool-aid. For example, I don’t buy that tuition has skyrocketed ‘because it can’. That is, there’s just a speculative bubble, in effect. I don’t think the growth in administration is quite as sinister as they suggest. It’s largely a function of universities wanting to do so much for students – so many programs and options and choices – which is a good thing. But it creates overhead costs.

I do agree that private for-profit outfits like University of Phoenix are, in effect, trying to get their noses into the huge trough of student loan money. That’s worrisome. The old are eating their young, leaving them holding the debt bag [pardon my mixed metaphor]. I am less worried by things like Western Governors University, which seems genuinely committed to trying to find a way to Option 2. Which makes me sad, but at least it isn’t some private sector trick to saddle students with debt. At least it’s an attempt to keep the democratic ideal of higher education for all alive, even if the dream looks pretty shabby.

Western Governors gives up the dream of a well-rounded liberal arts education. It gives up all the stuff that you can only do hands-on, in person. It gives up college as a formative social experience. It gives up a lot. But what it provides is worth something, and it’s not clear they are charging more than it is worth. It just makes me depressed to look at it, is all. But I can’t really argue with the logic of it, if the alternative is Option 1.

Final point. Some commenters objected to the implication that their cash-strapped institutions are emulating the top of the market – are all trying to be Harvard. The Rolls Royce option. Because they obviously aren’t making the dorms nice or repainting the classrooms or any of that. It’s all looking shabby. I said no one was trying to be Kia, but it looks like Kia to them. My analogy was, here again, potentially misleading. The idea was supposed to be this: everyone is emulating the top in that even second and third and fourth and fifth tier schools are structured like Harvard – same array of departments and programs and courses, just stretched fearfully thin, because no money to pay for it. This is aspirational, but also a necessary element of marketing to potential students. You can’t be Harvard but you have to sort of look like the same kind of place.

A better option might be to do a lot less, but hopefully do it better. This is, I take it, the Western Governors model. Not just online but simpler. More streamlined. Not really a university at all, in the traditional sense. Cheaper, as a result. Again, this depresses me. But it might be the way of the future. And it might be less bad for students than pushing them into debt to buy the premium product.

I dunno. [Editor’s note. I accidentally hit ‘publish’ prematurely, when I was planning on messing about with this post for a bit longer. But that’s alright. I really don’t know what I think about all this, in the final analysis. So I might as well do the messing about in comments, rather than in the post itself.]

{ 201 comments }

1

Harold 10.25.12 at 4:02 am

Just a few points
1) “my understanding is that it’s -[Club Med is] a fun place where you can do a lot of fun activities, and it costs a lot of money.”

Just for the record, Club Med was designed as a place where not too well-off people could vacation cheaply.

2) “If prisoners had to pay for their own incarceration for four years, it would cost them a lot of money. They would ‘graduate’ from prison in serious debt, probably (despite having lived in a crummy grey box)” You say this would be absurd, but prisoners in the USA , at least in rural Pennsylvania and Maryland do have to pay the cost of their imprisonment, causing them and often their elderly or impoverished relatives to lose all their money. Why make it cheaper when it is a money-generating activity for the state?

2

John Holbo 10.25.12 at 4:09 am

“You say this would be absurd, but prisoners in the USA , at least in rural Pennsylvania and Maryland do have to pay the cost of their imprisonment, causing them and often their elderly or impoverished relatives to lose all their money.”

I was going to mention in the post that making prisoners pay for their imprisonment and also making soldiers pay for their equipment and training, i.e. you are hoping to pay now and secure a good career later, is a standard model – just not standard in the US. I wasn’t aware that Pennsylvania and Maryland were so far ahead of me in this regard! How sad!

3

mbw 10.25.12 at 4:10 am

Western Governor’s is comparable in price to the state university where I teach, probably a bit more (hard to judge exactly). We have better outcomes in terms of graduation rates, and many of my students report finding online classes much worse than taking the classes face-to-face. (We also do offer online classes for the working adult who desires flexibility.)

So I’m wondering here what a regional state university has to do here to be considered Option 2. We’re about the same price, perhaps a little less. We’re better. Not to put too fine a point on it, but what do we have to do so our well-heeled colleagues at research schools remember that we exist instead of insisting that students who can’t afford Harvard don’t really need any kind of face-to-face instruction, or a chance at majoring in something that isn’t glorified tech ed?

4

John Holbo 10.25.12 at 4:12 am

“Club Med was designed as a place where not too well-off people could vacation cheaply.”

I was actually aware of this, and it was sort of in the back of my mind. It’s expensive, but it’s also for middle-class customers. Club Med isn’t really all that cheap, is it? Isn’t it more that you can go there and shoo the kids off to rock climb so you can relax on the beach, drinking a beer? For which valuable service you are willing to pay through the nose, but only for a weekend? (I probably should have researched Club Med before posting.)

5

John Holbo 10.25.12 at 4:20 am

“So I’m wondering here what a regional state university has to do here to be considered Option 2.”

I should have said more about how this option is good, option 2-wise. Community colleges. State schools that are keeping tuition reasonable, despite the fact that the amount they are getting from the state is squeezed and squeezed.

“but what do we have to do so our well-heeled colleagues at research schools remember that we exist instead of insisting that students who can’t afford Harvard don’t really need any kind of face-to-face instruction, or a chance at majoring in something that isn’t glorified tech ed?”

Leaving a comment was sufficient unto the purpose! I probably sound in the post like I think I am some sort of expert, when really I am trying to learn about this and think it through. My impression to date has been that the regional state universities are being forced to raise tuition. If they are in fact providing face-to-face instruction and not charging more than Western Governors then that’s clearly the better model, since face-to-face is better.

I am entirely in favor of dignifying the work of dedicated toilers at unknown state schools, especially since, in the Brave New World we are entering, dedicated toiling without much glory or thanks will, one way or another, be the backbone of the system.

6

Bryan 10.25.12 at 4:22 am

I read the piece on the UC system, and it was very interesting. I wonder if there will ever be a return to that level of state funding for higher ed, which seems to me to be the first-best solution.

If not, it does seem like we’re left with trying to find a least-bad solution. I wonder what ppl think of equity contracts to finance college education, as proposed by Luigi Zingales in this NY Times piece from earlier this year: http://www.nytimes.com/2012/06/14/opinion/the-college-graduate-as-collateral.html?_r=3&hp&

To be honest, I’m in two minds over the whole issue. On the one hand, the democratic ideal of higher education for all remains attractive to me. On the other, given that state spending is limited, perhaps those dollars should be spent on the poor rather than on subsidizing college tuition for the middle class. I’m willing to be persuaded one way or the other.

7

Harold 10.25.12 at 4:25 am

Actually, I am not completely certain about how it works in Maryland, but I know it is true for Pennsylvania.

Maryland does have ways that entrap people into a cycle of fines and probation.

When I visit friends in the country I hear all about it. It’s horrible.

8

mbw 10.25.12 at 4:30 am

We’ve had to raise tuition, but tuition here was quite low. I believe it’s around $4500 per year for a full load. It is going up at an alarming rate, and we are getting squeezed. But… we’re still here. We are cheaper than many public universities, but WGU is much cheaper than many online options.

The other thing I’d point out is that I think a state university like mine has a much broader impact in the community. There’s the jobs in the physical plant, of course, but also community gatherings, informational classes downtown, public lectures, and things like that. There’s a place for WGU, I’m sure, but I don’t see them hosting lectures or public debate watches or physics day for elementary schoolers, and while that’s hard to quantify, it’s something that WGU nor Harvard does for this town.

9

C 10.25.12 at 4:31 am

So agree with Holbo (this is rare enough that I feel compelled to say this!), but oddly enough, I think that for once he understates the strength of his case.

For instance, he doesn’t touch on some aspects that are increasingly pernicious about the US system. For instance:

1. Credentialism is now supreme as businesses refuse to use other measures to hire intelligent people than college. In general, employers are extremely afraid of discrimination lawsuits and too risk-averse to do their own vetting and so have outsourced their processes to universities (whether “disparate impact” is justified or not when it comes to testing, other countries are much less averse to using it).

2. Higher education in the US behaves essentially like an unanswerable monopoly as it knows that, unlike 50 years ago, it is the only route to a decent living in America, no matter how intelligent, experienced or talented you are. This situation is just not true (for the most part) in Europe or Asia and unsurprisingly, private institutions have nowhere near the pricing power that they have in the US (even in Asian countries where the free public systems are not superior like in Europe).

3. Colleges have gotten around outrageous sticker prices by colluding in massive loan burdening of the young and calling it an “investment”. One could make the same argument about the outrageous health bills in the US but no one seems to do that (for understandable reasons) and health reform has a strong constituency. It puzzles me that this persists.

4. Read Bryan Caplan on signaling–fascinating insight into the US system (not knowledgeable enough to know if it actually applies elsewhere–I would doubt it).

10

argh 10.25.12 at 4:34 am

I think these essays are interesting but misguiding, because they’re missing the real reason that college costs are going through the roof. It’s not because of buildings or equipment. It’s not even because of salaries (higher salaries for administrators are made up for by having more adjuncts, so overall it’s a wash).

It’s because of health care.

Universities have to pay for health insurance for a LOT of employees, and usually for students as well. To make things worse, the state governments also have to do that, and if they’re paying for it by cutting university funding. So universities are effectively getting hit by a double dose of increased health care costs. I don’t think there’s any way to control the cost of universities without getting health care costs under control somehow.

11

Harold 10.25.12 at 4:39 am

12

Harold 10.25.12 at 4:50 am

Sad is not really the right word. It’s outrageous!

13

afinetheorem 10.25.12 at 5:02 am

The basic premise of the post is incorrect, though. University education has absolutely not been soaring in cost. Expenditures per FTE student, inflation-adjusted, have been rising at about 1% per year, less than growth in GDP/capita, even over the last ten years. Net tuition payments have risen a bit faster, though at the state level, a lot of this is driven by cutbacks in state support (which has dropped $2000/FTE student, inflation-adjusted, on average for public four-year students over the past decade). In some places, like the aforementioned California, there has been an even more substantial decline in state support.

If state support per student were held constant, and minor adjustments in the growth of admin/student services were made, there would no inflation-adjusted growth in the cost of college at all. Net expenditures per student at four-year public universities, on average, are only $10000/yr or so. This is not Club Med, or prison, or the army, and it is absolutely achievable given our current wealth.

14

Meredith 10.25.12 at 5:55 am

Just to note that variety of options is crucial, because that variety will provide for varied needs and desires. Actual access to those options is another, separate, but crucial issue. Still. Focused conversation at a nail salon could be very productive. (Socrates at the gymnasium so different?) Maybe this is very US, but I assume such variety to be the stuff and staff of life. Community colleges, elite schools (small and large, each having its very distinct culture), state colleges, state universities. Let’s add nail salons. (I’m fresh from a Monday haircut and conversation with my “stylist” that was more intellectually invigorating than the the one with the students I’d just been meeting with in class.) (Also, a friend teaching years ago at a community college: his most intense experience as a teacher, teaching Latin as an independent study to two ex-cons fresh out of Walpole. Learning some Latin was life-transforming for them. Go figure. Liberal arts and all that.)

At the same time: the monastic cell. That’s what a dorm room once emulated. Not a bad model for the student fortunate enough to be experiencing “education” in the residential college, in a consumerist, gluttonous society (like that which many monks were shunning?). A 4-year, residential experience — which, these days, insists on the value of the junior semester/year abroad! Much as I value the 4-year residential college experience (hell, my life is devoted to that experience), its limits are registered in the value rightly placed on study abroad (or rather, “study away”).

15

QS 10.25.12 at 6:12 am

Yours is the logic of the corporate university. The affirmation of higher education as a “premium product” leads rather to the proliferation of adjunct faculty and shiny baubles, such as gyms and other student eye candy. This is what happens when we treat higher education as a factory: the university seeks to reduce the cost of labor (professors become adjuncts) while generating consumer demand (shiny packaging).

16

John Holbo 10.25.12 at 6:12 am

“Just to note that variety of options is crucial, because that variety will provide for varied needs and desires. Actual access to those options is another, separate, but crucial issue.”

Part of the idea of the traditional university/college is that you can go there as a young person and figure out what you want – find yourself! – which presupposes that the university is providing a universe of options. This is one of many ways in which the more streamlined models give up a key element of the traditional ideal of the liberal arts education.

17

John Holbo 10.25.12 at 6:21 am

“The affirmation of higher education as a “premium product” leads rather to the proliferation of adjunct faculty and shiny baubles, such as gyms and other student eye candy.”

How so? Shouldn’t the affirmation of higher education as a premium product lead to trying to get prestigious faculty?

On the other hand, how does my suggestion that maybe the eye candy has to go encourage the proliferation of eye candy?

18

John Holbo 10.25.12 at 6:52 am

“The basic premise of the post is incorrect, though. University education has absolutely not been soaring in cost.”

I confess to puzzled agnosticism about this. Some people say what you say. Ergo, I’m just getting on the bandwagon of erroneous moral panic about the cost. Others say the grounds for panic are real. Admittedly, I should probably have done more research about this before posting. So probably the post should have a frame around it: there’s a worry that costs are through the roof. If that’s right, what should we do/think about it.

19

Sebastian H 10.25.12 at 7:08 am

John: “Some people think that the rate at which college costs have gone up means that there must be some way to pop the cost bubble and dramatically lower costs back down without sacrificing quality. There’s some conspiracy of incompetence or venality by the administrators/teachers. We need to break the back of that, whatever it is, then things would get better. I don’t really think that’s plausible, but if you think it’s plausible, go ahead and work out your own solution to the problem along those lines.”

I don’t understand what your theory for the rising costs is then. Are you suggesting that the university experience is 6-8 times higher quality than it was in the 1980s? And most of that enormous rise in price came in the 1970-1990s *before* the states started seriously cutting back funding. As much as your linked article blames Governor Reagan, the fact is that CState funding for Universities stayed very high until the dot-com crash or so. The nationwide tuition hike-fest predates that by almost two decades. I’m not completely sure that this is largely explainable through the positional good/government loan lens, but the timing looks alot better than your government abandonment theory. Your timing appears to be off by about 20 years.

“College is a premium product. A costly good. But a valuable one we want people to have. “

Yes, but it was 6-8 times cheaper in very recent memory. And unless you are explicitly willing to say so, I’m not going to assume you think it is even twice as good now. (Actually would you mind estimating how much better you think it is now?)

It is very difficult to argue that the quality of university education is dramatically better than it was 30-40 years ago. And I’m not particularly convinced that the amenities are even twice as good, much less 6-8 times better. So we have a dramatic skyrocketing of price without an obvious cost-side explanation. That suggests that something is going on with the market. Since disturbingly large portion of this market is young people getting enormous (and for many, life crushing) government loans masking the immediate price, that seems an obvious place to look for a distortion.

You seem to argue that because college is a ‘premium’ product, of course it costs alot. But it isn’t much more premium than before, yet it costs enormously more. I can’t fully explain that with positional goods (the price being bid up by rich people to try to differentiate themselves), but you don’t seem to be able to explain it *at all*.

Part of your post seems to suggest that it doesn’t even need to be explained. Is that what you’re arguing?

20

Sebastian H 10.25.12 at 7:20 am

“The basic premise of the post is incorrect, though. University education has absolutely not been soaring in cost. “

You notably don’t link to anything to support this, and I’m skeptical because your argument doesn’t even hold through for the next whole two paragraphs.

You argue that ‘costs’ have only gone up about 1%. But tuition has year in year out been outpacing standard inflation by 2-3% (EVERY YEAR for well over 30 years). See for example from the college board or this ridiculously scary graph just since 1985.

“If state support per student were held constant, and minor adjustments in the growth of admin/student services were made, there would no inflation-adjusted growth in the cost of college at all. “

Again you don’t show the stats. State support didn’t drop much until around 2000. The amazing run up in tuition started in about 1970. What are you using as your start date for statistical analysis? 2002 or something?

21

Adam Roberts 10.25.12 at 7:48 am

I’m surprised nobody has made this point (maybe they have, and I missed it — or is it too obvious a point to need making?) The army analogy is better than the Club Med analogy because the benefit of university education is not primarily garnered by the student (obvious some benefit is garnered by the student, in terms of increasing earning potential, more interesting jobs etc. in the same way that a soldier will pick up some transferable skills from basic training) but by society as a whole. It is a massive social good that a large proportion of its population be well educated: it makes the whole country not only more productive and more civilised but also it reduces inequality. It doesn’t seem to me outrageous that society as a whole pay for something that will benefit society as a whole.

22

afinetheorem 10.25.12 at 8:27 am

Sebastian – you’re quite wrong on essentially every point.

At public four year universities, the big increases in net tuition (i.e., tuition after aid, which is really what we care about) is a phenomenon of the last 10 years: http://trends.collegeboard.org/college-pricing/figures-tables/average-net-price-full-time-students-over-time-%E2%80%94-public-institutions .

Declining state support for public universities is not a trend simply of the last decade: http://trends.collegeboard.org/college-pricing/figures-tables/state-appropriations-1000-personal-income-over-time .

Public doctoral university spending per FTE student rose from $14870 to $16320 in inflation-adjusted dollars over the past decade: http://trends.collegeboard.org/college-pricing/figures-tables/net-tuition-revenues-subsidies-and-educational-expenditures-fte-student-over-time ; the rise in expenditure per year per student is slightly, though not enormously, higher for private doctoral universities, and lower for two-year colleges. Most of that increase is driven by increased administrative spending and by higher benefits spending – salaries have hardly increased at all.

There are many, many much more detailed studies of the increase in college prices. Looking at expenditures is far more useful than looking at sticker tuition prices or similar because of the huge change in the amount of price discrimination in college pricing over the past couple decades.

23

bad Jim 10.25.12 at 9:02 am

I’m all for option zero. I paid nearly nothing for a world-class education at Berkeley back in 1968-1972. It certainly wasn’t the only reason for my success, but I’ve paid millions in taxes since then which would have been more profitably spent on education than squandered, as it was, on military posturing and exercise.

There’s no good reason the U.S. couldn’t turn back to the policies of California under Edmund G. Brown. They’re in no small part what gave us Silicon Valley and biotechnology and an ocean of fine wine; they’re a big part of what makes our coastal real estate so expensive. We could certainly afford to do what our parents did.

That aberrant outbreak of sanity ended thirty-four years ago, when our state decided we were no longer willing to share. Two years later we inflicted our dementia-afflicted former governor upon the nation, whereafter utter stupidity became and remains fashionable.

Now the default attitude isn’t just “I upped my income: up yours!”, it’s that nobody else deserves something I don’t get (here I reference my nephew and my late barber). Their needy resentment reinforces the illimitable greed of the truly wealthy, so they acquiesce in their own impoverishment.

As a modest multi-millionaire with a conventional Keynesian background I find this incredibly frustrating. “Idiots!”, I want to scream, “we could all be making a ton more money if more people were working, if people were better educated, if we were taking better care of where we live.” But no. People, especially poor people, hate taxes more than they love profits.

24

Sebastian H 10.25.12 at 9:28 am

Oh good heavens. You’re essentially claiming that a decline in percentage of the total state budget over periods where the state budget expanded immensely counts as a real dollar decline. That is ridiculous. Try the second chart in dollars per student and it would be an argument. Appropriations per thousand dollars in income adds approximately nothing useful to the discussion. Afinetherom you’re dangerously close to “how to lie with statistics” territory. Yes spending per student is down recently. But tuition is up dramatically as a forty year trend.

The link I give (from the same source you use) is straightforward, useful, nonmisleading, and entitled “A thirty-year look at college pricing reveals that rapidly rising prices are not a new development.”

Rapidly rising prices through the whole period.

25

Tim Worstall 10.25.12 at 9:29 am

“Option 2: we devise a less premium product. It won’t be as good, but it will cost less.”

This is the only solution to the Baumol Effect.

Start with the original example of the symphony orchestra. You can’t increase their productivity if you insist that they play at the old speed, on the old instruments. Thus, as wages in general rise over time listening to a live symphony orchestra will become relatively more expensive.

However, you can give them new instruments (a synthesizer replaces the strings section perhaps). Or you can record them and issue CDs and whatever.

That is, you can increase the productivity of delivering music by applying new technologies. Can’t change the productivity of the orchestra, but you can the delivery of what you actually care about, which is music to listeners.

More flippantly treatment for a headache used to be nurse wiping your forehead with a cool damp cloth. We’ve now mechanised this to a 2 cent aspirin (unless you’re in the US health care system where it costs $50).

The same will be true of education. If you want to reduce the cost of educating people it will be necessary to change the way in which you educate people. Change the technology. This might indeed mean online lectures, online libraries. Classes at the mall. Might mean all sorts of other and as yet entirely unthought of changes.

But that is the end lesson of that Baumol Effect. The only way to reduce the progressively higher relative costs of services is by in some manner automating them.

26

Sebastian H 10.25.12 at 9:35 am

The baumol effect typically takes place through wages. Wages in a sector which cant become more efficient relative to other sectors have to rise. We can’t really appeal to the baumol effect here unless enormous increases in teacher salaries were driving the enormous tuition increases. And we all agree they aren’t, right?

27

guthrie 10.25.12 at 9:38 am

Although it appears that symphony orchestras in the USA are facing wage cuts because the management want to spend more money on other things, such as their own salaries, not because they want to increase productivity.
http://labornotes.org/2012/10/orchestras-face-season-lockouts

28

Alex Blaze 10.25.12 at 11:16 am

Costs for some people are up, for others they’re not. It’s fair to point out that you can go to a four-year state school in the city you grew up in, live with your parents, get a few grants & scholarships to pay half tuition, and be paying $10K/year for all expenses combined (if you have a job you graduate debt-free). It’s an education that doesn’t involve online classes (which are pretty hard for the average 18-22 yo to stick to or get any help with) or freshman comp in dilapidated malls, and the best part is it already exists in most of the country. There are issues with really rural areas, but that’s not what’s driving the high cost of education.

The thing is, not everyone does this. The US spends 3% of GDP on higher education, OECD average is 1.5% (it’s much more common to just go to the public school in your home town outside the US). Why do people go to a liberal arts college instead of a state school? Why do they go to elite schools and take on a bunch of debt? Why are we spending twice as much as we have to on this education when we ostensibly have a system in place to avoid that?

Part of it is cultural: Americans see education as an investment for life, and investment in America means money, not just time and effort. Employers tend to care about the name of the school you went to in lots of fields (law is notorious for this), whereas having the right degree in other countries is what’s important since all universities are about the same. It’s also a sign of social class to go to, say, Marquette University instead of the University of Wisconsin at Milwaukee.

Another part is structural: we pay for college with debt instead of government spending. It’s not the whole difference, but part of that 1.5% GDP differential is just interest on debt.

And part is definitely a result of poor financial education. in other countries, you don’t have to calculate how much more you’ll make for the rest of your life because you went to Seton Hall instead of CUNY, and if it’s worth taking on the extra debt. In the US you should, but students are explicitly discouraged from doing so (it’s the most important investment you’ll make, cost should not be considered when applying, etc.).

29

Cranky Observer 10.25.12 at 11:31 am

= = = This is the only solution to the Baumol Effect. = = =

Assumes facts not in evidence.

Cranky

If this “Baumol Effect” exists, why didn’t advanced society collapse around 1500 (if not during the Roman Republic)? All the factors that Baumol cites existed then, existed in the Netherlands in the 1600s, existed in Massachusetts in the 1700s and California in the 1920-1980 period. Yet only in the last 20 years has this “disease” broken out and started taking down symphonies, universities, etc.

30

faustusnotes 10.25.12 at 11:31 am

I have a few problems with the underlying ideas about the role of university in this post. First:

We want higher education to be an engine of virtuous meritocracy but also an engine of democracy. We want people to be upwardly mobile, thanks to education.

Why do we want this? Is the US solution to inequality to set up a credentialist ponzi scheme? If everyone in the US gets an education and an upwardly mobile job, who is going to be a manual labourer, a cleaner, or a welder? As leftists, we can do better than this silly neo-liberal scam.

And then:

College is a premium product.

According to the Australian Bureau of Statistics, in 2001 the average university attendance rate in the OECD was 22%, ranging from 7% in Turkey to 35% in Canada. Currently 28% of Australians have a university degree, and I bet in people in their 30s this figure is higher. So no, College is not a premium product. It’s on a par with plasma screen TVs and having children in terms of its ubiquitousness (those are complete guesses).The full collection of Nausicaa: Princess of the Valley of Wind comics is a premium product; a university education is a necessity for a sizable minority of people in the developed world.

Maybe this means it should be expensive, but not necessarily. What it does mean is that governments of developed nations need to be ensuring that their policies encourage and support university attendance – and not for credentialist reasons.

31

Trader Joe 10.25.12 at 11:38 am

The most interesting point here is actually why do all universities feel the need to offer all possible disciplines. I get that some schools have ‘specialties’ – but these are most often historical accident that some ‘guru’ emerged among the faculty and then attracted equally strong followers than a strategic decision to be #1 at – say Chemistry or History or Business.

Apple focuses on making great personal electronics and enjoys economies of scale AND premium prices….they don’t try to make cars, toasters and sleeping bags because some people want those too.

MOOC is going to force this focus and specialization over the next 10 years – the sooner universities get on board with this concept, the sooner they can start delivering content people want to pay for – rather than having the 14th best english department in the state, they will have no english department and students will sit and watch the 1st best department in action….that’s where the ‘big savings’ + ‘higher quality’ kicks in.

32

Fu Ko 10.25.12 at 11:41 am

“This is the only solution to the Baumol Effect.”

It’s called the Baumol Effect, not the Baumol Problem. Why on earth would it be a problem in need of solution that the same number of people were required to perform the same amount of work while consuming the same proportion of the GDP?

So modern professors perform the same work as in 1700, but now they can afford plumbing and electricity and cars… and this is a problem? Sounds like some kind of overly-numerical resentment.

33

Clay Shirky 10.25.12 at 11:42 am

Sebastian #26,

No, we don’t all agree. In fact, some of us are convinced that higher wages make up the bulk of the explanation: http://www.insidehighered.com/views/2010/10/19/feldman

34

Aaron Bady 10.25.12 at 11:48 am

It’s a small point, perhaps, but these kinds of discussions often presume that college is a single thing (“the university experience”) and it really, really isn’t. That’s like saying that houses are a single thing, and having a discussion about how to make houses better; the difference between apartments and single-family homes are much more important than the similarities. In California, people often take the 11 campus UC as the point of departure for discussing “public higher ed,” for a host of reasonable reasons, but the 23 campus CSU system is the largest single system of higher ed in the country, and there’s over a hundred California community colleges, and California is hardly the only state like that. The point, then, is just that its’s very difficult to have a meaningful conversation about “college” without unconsciously taking your own experience as representative for all, and understressing the structural differences between different kinds of colleges.

35

Harold 10.25.12 at 11:52 am

I don’t know if John Holbo is trolling or not. He says he is considering the “second best” option, as I understand, namely to make highter education second rate — as a CD (someone else said) is to a live symphony orchestra, or a big mac to a sirloin burger. He doesn’t hint what his idea of a first-rate solution might be.

How are these things handled in Singapore, I wonder.

Club Med began as a non-profit cooperative. It was later changed to a luxury item, whether because it couldn’t be self sustaining or because it could be make to generate big returns I can’t be sure.

36

Fu Ko 10.25.12 at 11:53 am

Cranky, the Baumol Effect has existed for all that time. (That’s why even adjunct professors can afford homes with plumbing, although Newton could not.) Did anyone actually suggest that this would result in some kind of societal collapse? I thought it was just a way of explaining how increased wages in one industry could reduce labor supply (and thus increase wages) in another industry.

37

sherparick1 10.25.12 at 11:53 am

I don’t know if anyone else has mentioned this yet, but the staff at Club Med are not paid a lot (although they do get full board and their travel expenses while working pretty long hours). http://www.clubmedplanet.com/forum/topic.asp?TOPIC_ID=7568

One of the great changes in American society in the 1960s and 70s was the way “college” became a credentialing system for professional jobs. It was not always so, for instance journalism in the 30s and 40s did not require having a college degree. http://en.wikipedia.org/wiki/Walter_Cronkite

It is is this value of credentialing, the marketing of coming from a school ranked “high” in the US News or Washington Monthly college lists that I think has allowed colleges to charge what the market will bear.

38

Tim Worstall 10.25.12 at 11:56 am

“If this “Baumol Effect” exists, why didn’t advanced society collapse around 1500 (if not during the Roman Republic)? All the factors that Baumol cites existed then, existed in the Netherlands in the 1600s, existed in Massachusetts in the 1700s and California in the 1920-1980 period. Yet only in the last 20 years has this “disease” broken out and started taking down symphonies, universities, etc.”

Because we’ve changed the technologies we use to deliver services perhaps?

“Why on earth would it be a problem in need of solution that the same number of people were required to perform the same amount of work while consuming the same proportion of the GDP?”

Because the problem is that such services will consume an ever increasing portion of GDP. Not a static amount: that’s the whole point of the analysis.

39

Clay Shirky 10.25.12 at 12:05 pm

Cranky #29,

Funny you should mention 1500.

‘Round about that time, the scribes, those saviors of Western memory, ran into a spot of bother. Their services started to cost too much for people who wanted to buy books. And here’s the big mystery: the scribes had not raised their prices.

What do you think could have happened to make the scribes less competitive, starting around 1500?

40

Cranky Observer 10.25.12 at 12:09 pm

= = = Because we’ve changed the technologies we use to deliver services perhaps? = = =

These inter-tubes I helped build back in the day (at a university then in the process of upscaling, which I couldn’t afford to send my children to when the time came) are a wonderful thing, but it will be difficult to convince me they had a greater effect on productivity in education (and symphonies for that matter) than the printing press, the typewriter, and even the mimeograph machine.

In any case, a modern economy is a bubbling stew of relative productivities that are constantly changing, advancing, retreating, moving sideways, etc. Very hard calculate which sector is suffering a “cost disease” without assume a large number of other sectors have fixed relative velocities, which isn’t the case.

Cranky

41

Cranky Observer 10.25.12 at 12:12 pm

As I noted in the other thread this supposed “Baumol Effect” is one of those conundrum/paradox theories which is clever on the surface but seems to have the ability to paralyze people’s brains. At least after vigorous objection it has been demoted from a “disease” to an “effect”; that’s progress anyway.

Cranky

42

Clay Shirky 10.25.12 at 12:14 pm

John,

I wonder why you think of Western Governor’s as Option #2, instead of, say, Udacity, P2PU, or University of the People? WG looks to me more like Option #1b, an attempt to leave a lot of the old organizational assumptions in place, but squeeze out all of the costs on the inside, while the MOOCish world looks to me more like Option #2, in that it is trying to answer a different set of questions altogether, less “How do we educate America’s middle class at 10s of thousands of dollars per capita?” and more “How do we spin up 10,000 competent programmers a year, living anywhere in the world, in a way that is too cheap to meter?”

Or maybe your options go all the way to 11, and WG’s “Keep the structure, discard the costs” model seems better than really unbundling college, as MOOCs et al threaten to do?

43

Bill Benzon 10.25.12 at 12:17 pm

Tim Burke has had his version of option 2 up on his blog for some time. Here’s some paragraphs from the intro, followed by the link:

I’ve been messing around for a while with a blueprint for an alternative institution and have finally finished the basic sketch. This is no more than a sketch, and very clearly impractical or inadvisable in a number of the gestures it contains. It attempts to resolve through fundamental redesign three interconnected problems:

1) The haphazard, disconnected curricular design of both liberal arts colleges and research universities, both the range of subjects covered and the connections between areas of study. Rather than glossing over the relationship between integrative and specialized knowledge and trusting everything to turn out for the best, as most conventional liberal arts colleges do, or actively favoring specialized knowledge, as most research universities do, this curriculum proposes a much more consciously and rigorously organized relationship between integrative and specialized knowledge and between academic study and practical know-how. This is my own response to the kinds of curricular incoherence identified so expertly by Gerald Graff in his book Clueless in Academe, which I strongly recommend to both students and other academics.

2) The insular, timid and self-confirming character of a great deal of contemporary academic practice. This outline responds to this both by widening the labor pool of potential instructors and by systematically directing faculty towards communicating with wider publics while also demanding that faculty broaden their knowledge and intellectual practice rather than narrowing themselves towards more and more inward-looking forms of specialization. Rather than the laissez-faire spirit of most contemporary academic institutions, in which generalism is only one of many options for professional development and a responsibility to wider public discourse and needs is not a requirement, the 21st Century College would make these central conditions of continued employment. As part of this reorganization, this blueprint also advises the abolition of conventional academic departments and units.

3) The rise of the expensive “full-service” model of higher education coupled with the pervasive resurgence of in loco parentis, of the college or university as “nanny” determined to manage most aspects of community life and ethos. This blueprint counsels abandoning the vast majority of services provided by most colleges and universities while also maintaining a scrupulous disinterest in the private lives of students, faculty and administrators.

http://blogs.swarthmore.edu/burke/permanent-features-advice-on-academia/21st-century-college/

44

Clay Shirky 10.25.12 at 12:19 pm

Cranky #40,

You said that last thread too, but just repeating it doesn’t do much to support your view.

Service costs for industries that haven’t seen significant increases in worker-output per hour increase faster than inflation in years when average productivity per worker overall is rising.

That seems to needs an explanation. What’s yours, if it the same as Baumol’s?

45

Clay Shirky 10.25.12 at 12:20 pm

…if it isn’t the same as Baumol’s, that is.

46

Andre Mayer 10.25.12 at 1:14 pm

The really interesting thing about higher education economics (in the US) is that costs and prices have risen rapidly as we’ve moved from overall shortage to overall surplus (since the baby boom expansion, let’s say). Some of this has to do with Veblen goods and all that, and the use of financial aid to achieve differential pricing; there are known cases in which colleges have raised tuition to show that they’re just as good as the competition. But a lot of it has to do with the fact that bad schools used to be very, very bad; whereas today the public institutions that account for 75-80% of enrollments are largely sort of OK, at least. I’d note, too, that the recent increases in public-sector prices reflects a political judgment on the part of state legislators.

47

ezra abrams 10.25.12 at 1:17 pm

leadership starts with leaders
The Head of the Univ of CA system, M Yudoff, was originally offered a salary that was, iirc, in the neighborhood of 1 million dollars a year
the President of Dickinson, in PA, a good 2nd rate school, makes something like 500 K
Here in the State of MA, the Univ is a place for retired state pols to double dip on pensions and salary

Being serious involves painful choices; until we start with the head, why should anyone else suffer ?

48

Bertie 10.25.12 at 1:31 pm

The non-existence of socio-economic collapse at any particular time and place in history is not an argument against Baumol cost disease.

I can avoid, for example, ever having to get a manual watch serviced by a skilled watchmaker, or having a pattern 1911 pistol serviced by a skilled gunsmith, both occupations subject to Baumol cost disease and therefore both expensive services. I can just buy a digital watch and a Glock. Just like no one had to employ the expensive services of post-Gutenberg scribes.

But education is different; it is sort of mandatory, like health care or law enforcement (to mention a few other occupations subject to cost disease). These things all need some more worker productivity gains to ease the pain on those more-or-less required to consume these services.

49

Cranky Observer 10.25.12 at 1:42 pm

Personally I think it is incumbent on those advancing the Baumol theory to provide some concrete examples of it occurring that clearly factor out confounding factors such as (1) the constant back-and-forth churn in relative productivity across all elements of a modern society (b) actual data on salaries (c) the fact that all current examples advanced just happen to be in industries that the US’ new ruling class wants to see destroyed (e.g. Public education). But that’s just me.

Cranky

50

Anarcissie 10.25.12 at 2:03 pm

I don’t think you’re going to get anywhere with this unless you deal with the class issues which a few people have unsuccessfully tried to raise. If you separated out the functions of class filtering and replication which the education industry currently performs as its primary role, you could think about what would probably amount to a radically different system of learning for non-aristocratic people which might actually increase their productivity and enjoyment of life without subjecting them to life indebtedness to the company store.

51

AcademicLurker 10.25.12 at 2:06 pm

(b) actual data on salaries

At least for public universities, faculty salaries are a matter of public record and the record clearly shows that faculty salaries have not increased at anything like the rate at which tuition/room/board costs have increased. I notice no actual salary numbers are mentioned in the article linked in 33.

Why let facts ruin a perfectly good theory, after all.

52

Josh G. 10.25.12 at 2:21 pm

Like other posters, I think it’s worth investigating why college costs have gone up so fast when the “college experience” isn’t that much different than it was two or three decades ago, especially given that professorial pay hasn’t increased substantially and that an increasing proportion of classes are taught by low-wage adjuncts.

Seems to me that there are three factors: (1) the increasing withdrawal of state subsidies to universities, (2) administrative bloat, and (3) increasing health-care costs. If you look at changes in college structure over the past couple of decades, what really stands out is the increase in the number of administrative staff members. Benjamin Ginsberg documents this trend in The Fall of the Faculty: The Rise of the All-Administrative University and Why It Matters. The absurd increase in health insurance rates over the past decade is well known, and is almost certainly a major factor in tuition increases. But this is something that the university can’t fix alone; it has to be tackled at the national level (and PPACA is only a halting start at best). Of course, the second and third factors outlined above work synergistically: almost all administrative staff get health benefits, even as an increasing number of adjunct teaching staff do not. Hiring an assistant deanlet at $35,000 a year may not sound too expensive, but that number is probably almost doubled when the cost of health insurance and other benefits is added in. Cutting administrative bloat is the #1 thing that universities can do on their own to rein in costs.

A more serious, overarching problem is that college over the past few decades has changed from “nice to have” to an absolute necessity for anyone with middle-class aspirations. The death of private-sector unionism, the loosening of trade protection, and the increase in low-skill immigration have all combined to virtually eliminate the blue-collar middle class. The only way to fix this is to revive unions, tighten trade policy (especially regarding importation of finished goods from low-wage countries) and restrict immigration. But this will be a long, uphill climb.
In the meantime, there is still an area where things can be fixed on the margins. It used to be that entry-level white-collar jobs did not require a college degree. Now they do. Why? One major reason is Griggs v. Duke Power. Under this Supreme Court case (portions of which were later codified in the Civil Rights Act of 1991), the use of employment tests is considered racial discrimination under most circumstances. On the other hand, employers remained free to require college degrees for workers. An employer who wanted reasonably intelligent applicants could not safely require an IQ test, but could look at the applicant’s college history and use that as a proxy. Repealing Griggs and its progeny might help curb credentialism in the lower echelons of the white-collar world.

53

Clay Shirky 10.25.12 at 2:53 pm

Cranky Observer #48,

concrete examples of it occurring that clearly factor out confounding factors such as (1) the constant back-and-forth churn in relative productivity across all elements of a modern society

That isn’t a confounding factor. That is a cause. In the 1970s, when worker productivity fell, tuition didn’t rise as quickly.

(b) actual data on salaries

Start here: http://wmpeople.wm.edu/asset/index/dhfeld/explainingincreasesinhighereducationcosts

You’re looking in particular for “Table 1. Mean Absolute Deviations Between Prices and Higher Education Costs”

-c

54

Clay Shirky 10.25.12 at 3:00 pm

Lurker #50,

The increase in salary isn’t just from faculty salaries. It’s also from growth in the number of faculty, from administration (which is both growing in number and compensation), and from staff (which is growing in number and, where there has been a shift to more educated workers, as with IT, compensation.)

55

Clay Shirky 10.25.12 at 3:04 pm

Ambiguous — I should have said “the increase in personnel costs” isn’t just from faculty salaries.

And, as other’s have said, total compensation includes per-head spending on health care.

56

Meredith 10.25.12 at 3:23 pm

One quick note on rising costs and faculty salaries. When people use salaries of the late 1970′s and early 1980′s as a baseline, I cringe. In that period, assistant professors’ salaries where I teach (and elsewhere) were comparable to Depression-era salaries. A single person could barely support herself; supporting a family was a nightmare. Colleges and universities recognized the scandal of the situation (well, were forced to recognize it by aggressive faculty) and committed themselves to raising salaries — which, given the economy of most of the 80′s (not the period of booming endowments in the 90′s), meant raising tuition significantly. Initially, schools were only returning tuition to earlier “real-dollar” levels. Not sure how far they have since exceeded the real dollar levels of, say, 1976.
Wealthy private institutions and major research universities: the gulf between the salaries there and at most colleges and universities is another issue. It persists, dramatically.

57

Eli Rabett 10.25.12 at 3:24 pm

Let us calibrate this. Club Med runs about $120 US/ night. That’s about 90 Euro or about 75 UK. Certainly within reach of anyone who stays in the average Holiday Inn, and it is all in, meals, drinks and more. This is NOT out of the reach of the average person in the developed world and the US.

Mom Rabett in the last years of her life had to go to an extended care facility. That ran about $180-200 US per day.

When you talk about colleges, you need to split out room and board and tuition. Roughly speaking room and board, access to the gym, health care (yes Virginia colleges provide students health care as part of the costs) . Housing and food are going to cost about $14000 (that may be a bit high, but it varies, single, double apartment, type of meal plan, etc) for a nine month academic year or about $50 per day. (Eli looked at a couple of local schools. That is cheap compared even to Club Med, but Club Med has better beaches.

Which reduces this whole thing to an argument about tuition, which varies between $2K and $50K.

58

John Holbo 10.25.12 at 3:30 pm

Good discussion. Quick response to Shirky:

“I wonder why you think of Western Governor’s as Option #2, instead of, say, Udacity, P2PU, or University of the People? WG looks to me more like Option #1b, an attempt to leave a lot of the old organizational assumptions in place, but squeeze out all of the costs on the inside, while the MOOCish world looks to me more like Option #2, in that it is trying to answer a different set of questions altogether, less “How do we educate America’s middle class at 10s of thousands of dollars per capita?” and more “How do we spin up 10,000 competent programmers a year, living anywhere in the world, in a way that is too cheap to meter?””

Easy answer! I am ignorant about these other options you mention!

More later.

59

AcademicLurker 10.25.12 at 3:37 pm

Ambiguous — I should have said “the increase in personnel costs” isn’t just from faculty salaries.

And, as other’s have said, total compensation includes per-head spending on health care.

Certainly hiring more people in order to provide more services accounts for part of it.

I agree that healthcare costs are part of the equation but think it’s a bit counter productive to treat them as a specifically higher education issue. Our crazy healthcare system introduces absurd inefficiencies in many sectors, not just higher ed.

Anyway, apologies if I was overly snarky in 50. I just didn’t want the discussion to drift into the familiar & tedious “If only we abolish tenure and fire all those fabulously wealthy professors, all our higher education problems will be solved!”

60

AcademicLurker 10.25.12 at 3:38 pm

The first 2 lines of 58 should be in italics.

61

marcel 10.25.12 at 3:50 pm

In a comment with which I am otherwise in complete agreement, bad Jim wrote: People, especially poor people, hate taxes more than they love profits.

I think it is rather that people (perhaps especially poor people, but only perhaps) hate the idea that someone worse off may catch up more than they love the idea that they (and everyone worse off than they are) are better off.

62

Sebastian H 10.25.12 at 4:02 pm

I’m not a hard Baumol skeptic like Cranky, but it definitely has the feel of a magic wand in this discussion. In many cases above, it is being invoked where education is not distinctive from the rest of the economy. I’m willing to buy that Baumol should be invoked for the salaries of people actually working to teach students. Maybe it is true that productivity gains are much slower in that area than in the rest of the economy, sparking enormous gains in their salaries because their per unit productivity can’t rise and the underlying function remains important. But when I point to the relative stagnation of their wages as a counterpoint (strongly implying Baumol is not the cause), you can’t retort a la Clay Shirky pointing to an essay saying things like: “Like many other businesses, over the last two decades universities have shed most of their typists, replacing them with a smaller number of IT specialists.”

Everyone in the whole freaking US economy has done that. But in the whole rest of the US economy that shift has involved having fewer people overall. That last step does not appear to have happened in the university situation.

There is no evidence whatsoever that the Baumol cost problem should apply to “Higher Education as a whole”. Typists should still be getting more efficient by moving to word processing programs. Administrators should still be getting more efficient with email and spreadsheet programs. Both should be more efficient with telephones. All of the things that are functioning in the rest of the economy function in higher education too. Baumol *maybe* should apply to actual instructors of students. But if it were applying there, we should see massive wage increases there first. We don’t. Which strongly suggests to me that Baumol’s cost disease isn’t a good explanation.

If you want to explain skyrocketing tuition through skyrocketing personnel costs, don’t pick areas that are essentially the same as the rest of the economy. The high education distinctive costs have not skyrocketed. Invoking increases in general and administrative personnel costs may indeed accurately trace the reason for skyrocketing tuition. I’m not yet convinced, but I’m open to it.

However to the extent that explains the increase in cost, it does not explain why that increase happened because that is an area in common with the rest of the economy, not a special area for higher education. You would then need to look at why universities could get away with that ballooning cost while other sectors could not (and did not). I suspect that brings us right back to the college degree as signaling problem (and positional goods being bid up, because the purpose of positional goods is to position yourself above people who can’t afford it) and the price support being propped up by government loans (non dischargeable in bankruptcy and with very loose lending standards).

Essentially if you want to explain the dramatic differences, please stop pointing to things where higher education is exactly the same as the rest of the economy.

63

John Holbo 10.25.12 at 4:33 pm

Apologies to a few folks – including Aaron Bady – who got stuck in moderation for no good reason.

64

QS 10.25.12 at 4:46 pm

“How so? Shouldn’t the affirmation of higher education as a premium product lead to trying to get prestigious faculty?”

No, because by treating education as a commodity you incorporate market logic. Once education becomes something to sell to consumers, you are trying to maximize profits (or minimize loss). One way to do this is to create the perception of value without delivering actual “use value.” There are plenty of “premium products” which under the pretty package are quite poor. I think the Jaguar automobile might be the apt analogy.

We should treat education as a public good rather than commodity. It should operate on a logic separate from that of the market.

65

QS 10.25.12 at 4:47 pm

Although you could certainly say (and many have) that “prestigious faculty” are just another shiny wrapper around the education product, in that those faculty are prestigious because they bring revenue into the university but do not have much (any?) role to play in the education of the students.

66

bianca steele 10.25.12 at 4:50 pm

I’m not entirely sure what’s meant by “not everyone needs college.” Would nurses go back to not needing college degrees? Bookkeeping could be taught in high school again, or in Katherine Gibbs type schools. I don’t see why car salesmen need college degrees either. We could cut back BFA’s, and artists could stop bothering with those bothersome literature and history courses. Or is it more like, not everyone can afford college, but all those professions still need bachelor’s degrees, so only well-off kids will be able to be RN’s, bookkeepers, and drawing instructors?

I do realize that the proposals of less expensive alternatives are intended to avoid those kinds of conclusions, but I don’t quite see why the progression–nursing school not good enough, need bachelor’s, oops bachelor’s is too expensive, need something less good than nursing school–makes sense.

67

bianca steele 10.25.12 at 4:59 pm

I’m trying to avoid cynicism, but for that matter, the numbers of nontraditional students garnered from older RN’s doing their BS’s after a few decades, not to mention MS’s and NP’s and so on, must get fairly large.

68

Bertie 10.25.12 at 5:33 pm

Baumol *maybe* should apply to actual instructors of students. But if it were applying there, we should see massive wage increases there first. We don’t. Which strongly suggests to me that Baumol’s cost disease isn’t a good explanation.

But it isn’t just the annual wage (and the facts supporting both sides of the wage growth question have been cited between this and the other thread). We’ve talked about the following components of compensation as well (we don’t all agree on these, but they’re possibilities):
1. Health care and defined-benefit pension costs
2. Decreased course load per faculty member
3. Transfer of work from teaching faculty to “administration”

Note that exploding costs without commensurate explosion in annual salary can certainly be observed in other areas of the economy where its existence is less disputed than is the case here. A lot of public-sector employment is like this. The salary growth in such fields may not be particularly impressive, but the benefit costs are getting huge and the individual workers are working less or less hard than they used to.

Contrary to what some might think, Baumol’s cost disease is not some neoliberal, worker-destroying, all power to the 1% theory. It is actually a mostly center-left favoring theory in that it defends the increasing share of GDP going to education and government. A conservative or libertarian critique of Baumol’s cost disease (or perhaps more accurately, a criticism of the application of that theory) is that some of the occupations often cited as having cost disease features benefit from rent-seeking in the broad sense of the term: monopoly power, public sector unions, licensing regimes, immigration/citizenship restrictions, and so on. And there’s something to that argument, I think. But higher education employees enjoy rather less protectionism of this sort; here the Baumol’s cost disease effect is relatively more pure.

69

blavag 10.25.12 at 5:41 pm

Higher education is a political question see:
See Christopher Newfield’s, Unmaking the Public University: The Forty-Year Assault on the Middle Class

http://www.amazon.com/Unmaking-Public-University-Forty-Year-Assault/dp/0674060369

70

GiT 10.25.12 at 5:49 pm

I think it was afinetheorem above who wanted to focus on expenditures. No one seemed to take any interest in the previous thread, but I still wonder what people think of these graphs. If you are hesitant to go to some blog called “freemarketmojo”, you can just go straight to the paper at the NBER and see what the graphs look like in context. The picture painted suggests that rising per student expenditures is chiefly a creature of elite/flagship universities, and to me suggests a trend of increasingly betting all the new money on the winners – an appropriate strategy for horse racing and investing, but maybe not for education…

http://www.nber.org/papers/w15446

http://freemarketmojo.wordpress.com/2009/11/01/the-changing-selectivity-of-american-colleges/

From the abstract:

It is the consequent re-sorting of students among colleges that has, at once, caused selectivity to rise in a small number of colleges while simultaneously causing it to fall in other colleges. I show that the integration of the market for college education has had profound implications on the peers whom college students experience, the resources invested in their education, the tuition they pay, and the subsidies they enjoy. An important finding is that, even though tuition has been rising rapidly at the most selective schools, the deal students get there has arguably improved greatly. The result is that the “stakes” associated with admission to these colleges are much higher now than in the past.

71

Gaspard 10.25.12 at 6:50 pm

Aaron Bady’s point is very important here – it shows the conservatism of our age where there is no attempt at all to unpack this idea of a college experience, and that platitudes about it being “transformative” are so rarely questioned.

The reason the strip-mall 2nd rate model hasn’t materialised may be to do with the fact that the percentage of the population who do find college transformative in that liberal arts sense is not large enough to support it, in the same way that traffic and commenters for this blog remain a niche market. The fetishisation of the college experience, its expansion, and the way employer’s exploit it for credentialism should not be confused with all these bromides about engines of democracy.

72

Metatone 10.25.12 at 6:58 pm

Clay invokes a reason for the MOOCish approach – cheaply spinning up 10,000 new programmers across the world.

I think this is an interesting reason, it’s probably true in the context of “the world” because there are countries with few programmers – and also it’s possibly true in the context of “society” because more programmers might mean more people to do data crunching of public data etc. and create either new services (wikipedia, online train tracking) or better oversight of organisations and governments.

Still, I don’t know the situation in the US, but in places like Europe and Japan there has been persistent underemployment of programmers (which is part of how we got some of the cool stuff in the Open Source realm). As such, I’m not sure how well the MOOCish approach actually serves the people getting educated.

73

Metatone 10.25.12 at 7:03 pm

As an aside, my gut feeling is that the MOOCish model will take over a lot of undergraduate education, and it will have pros and cons, but probably be a net plus if it means people don’t start life in debt.

However, what’s really not clear to me is how research institutions (currently subsidised at least in physical plant terms, if not direct money subsidies, by the old style undergrad education) will be funded and structured. And I think that’s really quite an important thing to explore.

74

Richard 10.25.12 at 7:34 pm

Re 20,22,24: Is it true, or not, that total college spending per FTE has only risen modestly over the past decade? If that is statistically true, then isn’t there a good argument that (on average) the colleges are not at fault for this mess? Wouldn’t that mean the real issue here is cost shifting from state subsidy to tuition, and the social policy issues around that?

75

Josh G. 10.25.12 at 7:36 pm

bianca steele @ 66: “I’m not entirely sure what’s meant by “not everyone needs college.” Would nurses go back to not needing college degrees?

Obviously registered nurses need field-specific nursing education. Why they need to spend a couple of years learning Beowulf and the quadratic equation is much less clear. One answer might be that this is part of a well-rounded education, but that’s just words, and doesn’t (or shouldn’t) carry much weight against a five-figure nondischargeable debt. If society wants people to know these things, it should damn well pay for them to learn. Why do employers demand it? The only reason I can think of is because they consider it a proxy for other desirable qualities, such as high intelligence and/or perseverance. However, in that case, it would make more sense to measure these traits directly, rather than relying upon a flawed and expensive proxy measurement. But that can’t change until Griggs v. Duke Power and its legal progeny are repealed, or we close the achievement gap in schools. Since the achievement gap isn’t going to be closed any time soon (and probably can’t be with anything short of a new Great Society), that leaves only the first option as a viable short-term solution.

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Lurker 10.25.12 at 7:43 pm

Actually, there are alternative solutions to the academic financing problem. The easiest would be to introduce trade classes into high schools. Now, many jobs require college degrees only as credentials. On the other hand, there are subjects in the community colleges that do not really belong into academia, and subjects that are not taught anywhere.

For example, one should be able to become a professional:
* plumber
* stylist
* electrician
* clerical assistant
* metal worker
during the high school years. If you started trade classes at the age 16, you could be a pretty proficient journeyman in any of these trades by the high school graduation, even if you had some academic classes in addition.

In Finland, even policemen can do without a degree. They only need to have the prerequisite of high school (or vocational school) graduation and a year’s work experience to enter the police school, which is a two years long trade school.

77

Alex 10.25.12 at 8:04 pm

Cranky: (and others) William Baumol observed the effect in the 1960s.

78

Tim Worstall 10.25.12 at 8:05 pm

@62 “Baumol *maybe* should apply to actual instructors of students. But if it were applying there, we should see massive wage increases there first. We don’t. Which strongly suggests to me that Baumol’s cost disease isn’t a good explanation. “

Err, no. You’ve got Baumol the wrong way around. We have seen (absent health care costs, pensions etc) just normal economy wide style average wage increases. Which is Baumol’s very point.

Productivity in manufacturing will increase faster than that in services. But average wages are determined by average productivity. Thus, wages in both services and manufactures will rise, on average, over time, at the rate of that increase in average productivity. But productivity in services lags behind the improvements in that in manufacturing. Thus, relative to each other, services will become more expensive relative to manufactures.

That there has been no explosion in relative salaries to those teaching but there has been a large rise in the costs of those services provided is not a refutation of Baumol. It’s his very point in the first place. As professorial salaries rise along with general incomes then education will become more expensive relative to manufactures.

79

JW Mason 10.25.12 at 9:13 pm

I think the key point has been made by mbw, Alex Blaze, and others: There already is a “non-premium” option 2, in the form of the non-selective schools that the vast majority of US college students attend. I don’t think the reason that John Holbo skipped over the whole universe of non-flagship state universities and community colleges and went straight to online education is that no one is making profits from the former but they very much are from the latter; but I do think that is part of the reason why the conversation goes that way so often.

Of course it is true that no one “needs” a traditional college education to do most of the work that’s required for us to get our share of the social product. (Of course much of that work isn’t socially necessary either, so in that sense a job is just as much a credential as a degree.) But it remains the case that college is one of the only socially sanctioned public activities which is not judged solely on economic criteria. The replacement of liberal arts with vocational education is largely a myth — the proportion of college students studying liberal arts is no lower than it was 30 years ago — and community colleges are full of teachers and students who take academic work seriously as a pursuit in itself and not just as the accumulation of human capital. You may not believe it, but even two-year schools are often real communities of learning in a way that online degree mills can’t remotely come close to.

Now, you can say, why should public recognition of our existence as citizens and human beings and not just quanta of labor power be tied up with this traditional model of colleges? And of course in principle there’s no reason it should be. But in practice, schools are the biggest non-market spaces we have that still have a real degree of social recognition and power, that have successfully maintained their own autonomous logic and not just turned into another vehicle for the pursuit of profit. If we lose that, it’s not just going to spontaneously reappear in nail salons or wherever. The whole point of schools is that they are not businesses.

Of course one can imagine a world where it’s easier to work in a salon without ever going to college — without ever, for that matter, studying history or economics or literature or biology or physics. That people think we’d be better off in that world is what’s baffling.

To be honest the whole tone of this post reminds me of the attacks on pubic employee unions: Everybody else has to accept job insecurity and powerlessness at work, why are these people special? Same here: Every other institution is subordinated to the logic of the market, why is college special? And yet as various commenters have pointed out, it is just not the case that traditional college education is obsolete or cost-prohibitive or otherwise on its way out. There’s a huge swath of public colleges and universities that, despite chronic underfunding, remain genuinely accessible places for people to discover themselves as part of a wider intellectual universe. If you can’t see it, that’s on you.

80

Nate O 10.25.12 at 9:29 pm

I think there should be more emphasis on students improving their university. Make the Greek system do landscaping, make the architecture students design new facilities, make the construction management students run the construction. I’m sure it would save money and provide valuable experience.

81

bianca steele 10.25.12 at 10:14 pm

There already is a “non-premium” option 2, in the form of the non-selective schools that the vast majority of US college students attend.

Aren’t people already taking out loans to attend even these? Maybe my memory of my reading was wrong.

My position on this is complicated. I know of at least one professional graphic artist who might not have been allowed by his parents to go to art school if there hadn’t been a bachelor’s degree at the end of it. I agree that the idea that even an administrative assistant have could a literature or history degree, or even a physics degree, from an institution not good enough to get her into graduate school or a publishing office, is an attractive ideal. I agree that a 22 year old with a degree is a more attractive candidate, often, than an 18 year old with only high school. I’m not sure the model that replaces secretarial school with huge college debt and a liberal arts degree from an institution nobody’s really happy with, then secretarial wages, is that attractive an ideal.

82

Salem 10.25.12 at 10:29 pm

“Of course one can imagine a world where it’s easier to work in a salon without ever going to college — without ever, for that matter, studying history or economics or literature or biology or physics. That people think we’d be better off in that world is what’s baffling.”

Because quite a lot of people don’t want to go to college, or study history or economics or literature etc, but do want to get a job. Speaking purely of myself, the most miserable years of my life were spent at a (very expensive) college, hating every moment of it, and desperately wanting to quit and get a job. But I couldn’t, because the kinds of job that I wanted would not be available to me if I quit, not because the knowledge I was gaining was in any way useful, but because I needed the credential, as a signal of my intelligence, perseverance, etc. And so many friends felt just the same.

This blog is populated by a lot of academics, which is fine. And indeed, academics are the kind of people who like academia! But you have to broaden your mind, accept that people are different, want different things, and have different value judgments. This should not be baffling to you.

83

Bloix 10.25.12 at 10:32 pm

#78- “We have seen (absent health care costs, pensions etc) just normal economy wide style average wage increases. Which is Baumol’s very point.”

There haven’t been any “economy-wide style average wage increases” arising from productivity gains for three decades. All the gains from increased productivity have flowed to the top 1 percent. See http://www.irle.berkeley.edu/events/spring08/feller/
(and particularly the graph).

Without such general wage increases, there’s been no pressure for academic salaries to rise, either. And so they haven’t. Academic salaries have risen (after inflation) about 7% over 30 years. That’s a trivial gain.

The Baumol effect argument is an ideological support for the contention that we just can’t afford college anymore. As far I can tell, it’s not evidence-based.

84

Somebody 10.25.12 at 10:48 pm

You have brought up Western Governors University twice now. And you have brought it up in the context of a model of what to give up in order to make education more affordable.

But as an online institution, it still costs at least $2,890 per term (http://www.wgu.edu/tuition_financial_aid/tuition) while in-state tuition at a comparable state school is only $680 more for a full course load (http://fbs.admin.utah.edu/download/income/FreshSophRes/FreshSophTuitionRes.pdf). And of course community colleges are much less expensive than this.

While it is possible for efficiencies to accrue to an online schooling system, it is unclear that this is happening at WGU or that if so, that the students are seeing the results in the form of lower tuition costs.

85

mbw 10.25.12 at 10:59 pm

People take out loans for online colleges, too. WGU advertises that it’s cheaper by half that most of its competitors. If that’s right, figure $10K per year for an online education. The legislature’s a big fan of it here because it means no tenured faculty and WGU certainly contributes.

I obviously have a personal reason for thinking that it’s important that one not have to be Harvard-caliber or Harvard-wealthy at age 18 to be allowed to read Plato in college or have a real chemistry lab, but beyond that, I worry that narrowly focused vocational education becoming “college” is going to be exactly the wrong way to go. I seen to remember learning that computer programming was the way to go for financial reward; and then there were a lot of unemployed programmers. What happens to an online grad who hasn’t had to broaden her knowledge base at all who can’t find a job in her field?

I get that college is mostly career training for most folks, but most people don’t end up with a job that exactly matches what they studied. So what happens when we narrow that field of study to get rid of all those useless liberal arts, mathematics, and science electives?

86

Cranky Observer 10.25.12 at 11:49 pm

Via Brad DeLong, commentor KenL at Unqualified Offerings:

= = = “But just as the Internet has not ended travel, as it and before it the telephone were predicted to do, so I think will be the case with the live classroom. It’s just a question of who is allowed which experience. The wealthy do not and never will send their children to an online university. Funny how no one ever mentions that.” = = =

87

Cranky Observer 10.26.12 at 12:02 am

= = = Lurker @ 7:43: “Actually, there are alternative solutions to the academic financing problem. The easiest would be to introduce trade classes into high schools. Now, many jobs require college degrees only as credentials. On the other hand, there are subjects in the community colleges that do not really belong into academia, and subjects that are not taught anywhere.

For example, one should be able to become a professional:
* plumber
* stylist
* electrician
* clerical assistant
* metal worker
during the high school years. ” = = =

You are describing the Chicago Public Schools high schools of the 1880-1970 period (and presumably New York’s, Philadelphia’s, Detroit’s, etc). All of the larger CPS high schools had programs in one or more of those areas and there were four special-purpose trade high schools that handled the heavier programs, including one operated with the trade union council that would award an apprentice card on graduation.

These programs are now mostly (although not entirely) gone for a wide range of reasons, including but not limited to greater need for math and writing (and now computer) skills in the complex trades (electrical, plumbing, auto mechanics) requiring the full four years of academic subjects, loss of the industries that had provided the jobs after graduation, population flight to the suburbs where new-built schools were not intended to bring such lower-class “city” programs with them. Of course the drive to destroy public schooling in the US in general factored in too. And on the positive side, a more general belief in US society that young adults should be equipped for change and growth throughout their lives, which is IMHO a generally good attitude but makes it difficult to implement a Germany-type “choose your skill for the rest of your life at 16″ strong apprenticeship program.

Cranky

88

Paul 10.26.12 at 12:02 am

Just some unrelated observations that don’t appear to have received much attention

On-line and shopping malls can and do expand access to non-trads and others who for one reason or another cannot relocate full time to a bucolic campus. On-line (or for that matter a class at a suburban mall) is not automatically going to save much money, unless the professor is paid less, or a larger number of students is crammed into the room. But we already have very large lectures at some of the most expensive places.

Student debt in many cases might be a product of student lifestyles–that smart phone is probably $1000 a year or so, and many of my students at my non-prestigious regional university believe a car, in many cases a nice new car, is a necessity. A friend was recently complaining about her son’s tuition, but I suspect she’s spending more on her son’s car than her son’s tuition.

Some of the “is it worth it” conversation is probably a byproduct of an anemic economy that has little to do with problems of higher ed.

The old days where state supported institutions were heavily subsidized by taxpayers is seen by many here as a golden age. But consider–were most students attending the “public ivies” were middle and upper middle class kids? What was the tax base supporting those kids? Was it fair to ask working class families to subsidize the education of middle and upper class kids? I realize that the current situation isn’t doing those working class kids any favors, so I’m not saying things are better now.

Along the same lines, one of the saddest things to me in all this is how much of a game college admission and financial aid is. A kid who comes from family capable of playing the game well is going to have a huge advantage over a kid who is relying on their overworked high school guidance counselor. Just knowing that some of the most prestigious and elite schools have the most generous financial aid programs out there is an advantage.

89

Harold 10.26.12 at 12:22 am

I would guess that another reason these “vocational” (really working with your hands) subjects are no longer taught is fear of liability in case of injury.

90

Salient 10.26.12 at 12:37 am

I don’t think the growth in administration is quite as sinister as they suggest. It’s largely a function of universities wanting to do so much for students – so many programs and options and choices – which is a good thing. But it creates overhead costs.

I do wish it would become standard for complaints about ‘administrative costs’ to be phrased as complaints about the programs comprising those costs. Health services — a free clinic, affordable across-the-board treatment. IT — blazing-fast Internet access everywhere, reliable and secure communication (e.g. Blackboard), and technology-intense instructional tools. Comfortable living space designed to support a social atmosphere. Accommodation services for students with disability, including testing and diagnosis facilities. (Add in something something overpaid athletics, something something overpaid top management, if you want.)

But whatever, most importantly, encompassing all that stuff, the university provides a complete local economy — complete enough that a student will hardly ever have to leave campus in order to get whatever things they need and want.

Some universities actually accomplish this (I remember Madison citizens making dry remarks about how many U.W.-Madison students never leave the campus). Some universities barely manage any shred of an incomplete economy, and don’t even provide local housing. So there’s a kind of sliding scale. But consider, doesn’t that scale actually track pretty well with institutions’ prestige? Is this a coincidence? You could basically define class categories for institutions according to how well and how thoroughly they accomplish this feat, and I conjecture the ordering you’d get would not differ drastically from the school rankings in U.S. News and World Report or whatever. Maybe the ‘top schools’ are pressured to provide top services, so even if an institution’s prestige is defined by its faculty’s research, it has to match that prestige on the complete-local-economy scale.

And hey, about that something something ‘administrative cost.’ Complaints about various specific administrative costs are probably reasonable, but holy crap, it’s not like your average city does too much better managing a complete local economy, and what’s their administrative overhead? (I guess the folks at the top make a lot less. I have to admit, I’ve never looked up the salary a mayor commands, but I doubt it’s six figures in most places.)

So anyway. JH, I think what you are asking is equivalent to, how do we go about integrating universities further into their surrounding cities, thereby alleviating the need for the university to manage a complete local economy? You’re apprehensive about a ‘mall’ school that relies entirely on the surrounding city to provide the economy. How much of the specialness of attending university is really the specialness of living in a closed, tight-knit, interconnected local economy, along with a lot of your peers?

91

Tom 10.26.12 at 12:44 am

I agree with afinetheorem’s point: university education has not been soaring in cost. One has to take into account the aid that the student receive and that is why net tuition and fees is the correct measure to use. There is a good article here:
http://economix.blogs.nytimes.com/2011/11/04/college-is-cheaper-than-you-think/

As mentioned by others, there are also many cheaper, but still valuable, alternatives to expensive private universities such as in-state public universities: the Kia model has been around for a while. That does not mean that we should not think about ways through which we can increase productivity in higher education. I believe that the discussion would have been more useful if the post had focused on that.

92

Salient 10.26.12 at 12:56 am

oh and hey thank you to Adam Roberts for getting to the heart of what I was trying to say with my army analogy, better than I did (but all the same I think JH’s response makes sense — we can stomp and storm about the injustice of terribly low public funding, and argue that publicly funding students is as justifiable as publicly funding soldiers, and demand that the steep decline in public funding for state schools be reversed… but suppose we assume that decline is irreversible, then what can we do to help a lot of the less wealthy students get what they need? Makes sense to ponder, at least.)

93

Markos Valaris 10.26.12 at 1:40 am

I find it hard to see how, even in theory, the Baumol effect explains what it is supposed to explain.

Suppose that A picks 10 apples a day, which she sells for $1 each. She makes $10 a day. In the afternoon she takes philosophy courses with B, who teaches 10 students a day and charges them each $1. The price of apples is the same as the price of philosophy, and A devotes 10% of her income to philosophy.

Then A acquires a technology that allows her to pick 20 apples a day. Let’s say half of this increase in productivity shows up as increased income for her and half as lower prices for apples. A now makes $15 a day, and each apple sells for $0.75.

Now B wants the same income as A, but she cannot teach more than 10 students a day. So she raises her prices instead: she now charges $1.5 per student. The price of philosophy is now double the price of apples. Cost disease!

But here is the thing. The share of A’s income that goes to philosophy hasn’t changed: she now pays $1.5 for her classes, but her income is now $15. If she could afford philosophy before, she can afford philosophy now.

If the cost disease is due to wages in the service sector keeping up with wages elsewhere, then why would it affect the share of people’s income needed to buy the same bundle of services? The numerator increases, but so does the denominator.

I’m no economist (in fact I’m a philosopher!), so I probably got something wrong here. But what?

94

Watson Ladd 10.26.12 at 1:41 am

Salient, in the 1990′s the students at Chicago didn’t do worse then today. So what do the additional legions of administrators add? Is this just additional signalling with no social value?

95

GiT 10.26.12 at 4:12 am

Maybe they add less sexual harassment, improve opportunities and access for the disabled, and improve the outcomes of URM students. Maybe they are now just as good at different things – things they would not have been expected to be good at in 1990 (like working with the internet and computers).

96

LFC 10.26.12 at 5:16 am

I know this post/thread is largely about cost, but some other issues have arisen which I think are interesting (and arguably important). What I’m about to write is put forward tentatively not definitively, which I say b/c I fear it may elicit some strong reactions.

That higher education has taken on so much of a credentialing aspect, at least in the U.S., is quite unfortunate, ISTM. It results among other things in experiences like those of Salem @82, who was miserable at an expensive college and wanted to quit and get a job but felt s/he couldn’t b.c of the credentialing aspect. We should be exploring ways of trying to weaken the now-tight connection between a degree and certain kinds of employment; thus I have considerable sympathy for the efforts of that wealthy entrepreneur (whose name is escaping me) to persuade people that college should not be seen as the only route to ‘success’. (Note: sympathy for his efforts on this particular issue, not for his politics in general.)

In the current set-up in the U.S., large numbers of 18-to-22-year-olds from certain socioeconomic strata (albeit still a minority of the total population) are given 4-year liberal-arts educations (sometimes including a year or semester in Asia or Europe or elsewhere), whether or not they themselves have some desire for or interest in pursuing it. By making this more-or-less (de facto) required for everyone at least in certain socioeconomic strata, you guarantee ending up with some students who are going to be bored, alienated and/or unhappy and who probably will find their most enjoyable experiences to involve the consumption of a variety of (licit and illicit) substances.

The oft-mentioned benefits of a liberal arts education (things like becoming more able to think creatively, read critically, write clearly, speak effectively, and so on) are definitely not to be sneezed at; but what is regrettable is the evolution of a system in which there is seen to be only one route, broadly construed, to acquiring these benefits, namely some kind of formal, institution-based post-high-school education which is seen at the same time as necessary/indispensable to one’s economic prospects. Whether we’re talking about private colleges, major public universities, regional universities, community colleges or whatever, if a substantial number of students are enrolled b.c they feel they have no alternative given the current set-up, are not benefiting much educationally, and basically are just marking time until their release, then I think that is a problem. The credentialing aspect of post-secondary education is so entrenched that eroding it will be very difficult. But I think there should be more efforts made in that direction. That will no doubt require a restructuring of the job market, hiring practices etc., but I’m inclined to think there is a strong case to be made that that is the direction in which, ideally, things should be moving. The eventual upshot of such a major change would be that if, say, you’re an upper-middle-class American 18-year-old graduating from high school, going to college (of whatever kind) would become a choice, an option, rather than, as now, something you automatically do because everyone else in your peer group is doing it and because your immediate environment and the larger society in effect require it.

97

RDT 10.26.12 at 6:07 am

@93 I’m hand-waving here, but is it clear that the average fraction of income spent on higher-ed has changed dramatically over time? Fifty years ago a lot of people were spending 0% of their income on college because they weren’t going.

98

garymar 10.26.12 at 6:14 am

There are people, usually older people, who attend community college classes because they desperately want to learn. And not just to make money. For them, reading literature, for the first time in their lives, is truly a transformative experience.

And I remember Washtenaw Community College in Michigan. Auto repair, HVAC, healthcare classes. Large workshops filled with heavy welding equipment. Awesome!

99

garymar 10.26.12 at 6:15 am

Now how did I get a blockquote in there?

100

Katherine 10.26.12 at 9:29 am

Just a thought about the “4 year liberal arts education” model – I did mine in 3, normal UK-style. Is there any evidence that US students come out better/more educated over 4 years than do their UK equivalents? If not, there’s a possible 25% saving right there.

101

Cian 10.26.12 at 11:05 am

On Baumol. Two points.

First of all, if this applies to Higher Education, it should also apply to schools. Does it? I see no evidence of this.

Second, the trend in recent years in Higher Education is for graduate students and temps to take on more and more of the teaching load. In which case you would expect the cost of labor to be falling, rather than rising. So what gives?

102

Cian 10.26.12 at 11:06 am

Just a thought about the “4 year liberal arts education” model – I did mine in 3, normal UK-style. Is there any evidence that US students come out better/more educated over 4 years than do their UK equivalents? If not, there’s a possible 25% saving right there.

I suspect that UK students on average leave school better prepared than US students. Also, in the UK you choose your major prior to going, unlike in the US.

103

Katherine 10.26.12 at 12:08 pm

Well, yes, Cian, I’m aware of the explanations as to why. My point was – it doesn’t have to be that way, and the other way is vastly cheaper.

104

Cian 10.26.12 at 12:19 pm

it doesn’t have to be that way

Well only in the abstract. The kinds of social and political change required to get to that point would be enormous. Federalism being only one of the barriers you face.

105

Harold 10.26.12 at 12:34 pm

I gather the Scandinavian system has compulsory education for all for nine years (including crafts and handwork for everyone, which is supposed to promote social egalitarianism) until 16 age followed by tuition-free non-compulsory high school, which is more like our community college and which can be academic or vocational. Virtually everyone chooses to go. I presume university is three years. There are entrance exams, but there is flexibility in admission, to allow for students to switch from vocational to academic tracks and visa versa.

There are those with vested interests who have reasons to oppose change. Robert Hutchinson tried to have exams for the U of Chicago, so that students who passed could skip high school and even get college credits. For some reason, high school administrators hated this system and it had to be dismantled. Someone told me that only one student ever passed everything, obtaining college credit as well – he was an Italian national from Italy.

106

Harold 10.26.12 at 12:59 pm

Berlioz scholar Jacques Barzun RIP http://www.nytimes.com/2012/10/26/arts/jacques-barzun-historian-and-scholar-dies-at-104.html?pagewanted=all

“He believed that the mission of the university should have nothing to do with professional training or political advocacy. The university, he wrote, should not be a ‘public utility”; rather it should be a “city of the mind” devoted to the intellectual currents of Western civilization.” –NYT obit

I liked him, but did not like many of the other people who admired him.

107

bianca steele 10.26.12 at 12:59 pm

@Katherine, cian– It seems like an interesting exercise to take a typical first-year college introductory lecture course and see what would happen if it were turned into an A-level, or the reverse.

108

Tim Worstall 10.26.12 at 1:15 pm

“Now B wants the same income as A, but she cannot teach more than 10 students a day. So she raises her prices instead: she now charges $1.5 per student. The price of philosophy is now double the price of apples. Cost disease!”

Yes, exactly. The price of a service is now higher relative to manufactures than it was (if you’ll give me apples being a manufacture).

And that’s Baumol.

109

JW Mason 10.26.12 at 2:45 pm

is it clear that the average fraction of income spent on higher-ed has changed dramatically over time? Fifty years ago a lot of people were spending 0% of their income on college because they weren’t going.

As it happens, I have right here (for the actual work I should be doing instead of commenting), exactly the answers to this question.

(1) Higher Ed Share of Total Household Consumption
1960 0.4%
1970 0.8%
1980 0.7%
1990 0.9%
2000 1.1%
2010 1.5%

(2) Higher Ed Enrollment as Share of Total Population
1950 1.5%
1960 2.2%
1970 4.2%
1980 5.3%
1990 5.6%
2000 5.4%
2010 6.8%

(3) Normalized Higher Ed Spending = (1)/(2), 1960=100
1960 100.00
1970 95.12
1980 68.85
1990 81.83
2000 103.69
2010 111.47

So while it’s true that people are spending more on higher ed in recent years, it’s a pretty modest increase — less than a tenth of a percent of household income per year. The big story is the large fall in the cost of higher ed during the period of rapidly expanding public institutions, which was then reversed after 1980. Among the population that goes to college, they pay about as much today as they did 50 years ago. So I think we can safely throw out Baumol as a red herring — relative productivity trends were no different in 1960-1980, when higher ed costs were falling, than in more recent years when they have been rising.

The bigger point is that there is just isn’t a crisis here. The vast majority of rising higher ed expenditure in recent years is accounted for by higher enrollment, not higher costs. Looking at it another way, according to the Digest of Educational Statistics, college debt of current students rose (adjusted for inflation) by 2.9 percent annually between 2003-2004 and 2007-2008, which is a bit faster than income. But for pubic schools it was only 1.9 percent, and for public community colleges, 0.8 percent. Given that real disposable income rises somewhere above 2 percent a year, that means that public higher ed is actually becoming *more* affordable, at least if we use debt as our metric. So again, it just is not the case that the cost of providing a traditional, classroom based college education is rising out of control.

Here’s how it looks to me: We have a system of public higher education in this country that is, by and large, good quality, largely staffed with dedicated, committed, qualified people, it provides a service of great social as well as individual value, and it is affordable and accessible to almost everyone who wants it. It’s underfunded, at least compared with the 1960s and 1970s, which is unfortunate, and of course like anything we could make it better and cheaper, if we wanted to. But overall it’s working pretty well.

But we also have in this country a political movement that hates public institutions of any kind. And our system of capitalism means that you can’t have any large public institution without attracting a bunch of well-funded hucksters looking to transform it into a source of profit. So we get this totally manufactured, bogus “crisis”of higher ed costs, backed up with bogus arguments about Baumol disease and so on, that they hope to use as la lever to pry some of the resources currently going to our (affordable, really pretty good) system of public higher ed into their own greedy maws. Very much like Social Security privatizers. And people like John Holbo are their useful idiots.

110

RDT 10.26.12 at 2:46 pm

@bianca (103) Isn’t that pretty much what AP exams are?

@cian (101) I think cost-disease has affected K-12 schools…
– it’s not as evident since in most cases parents aren’t paying the bills — but high end private school tuition is pretty high.
– it’s probably one of the sectors where “you could make a lot more money doing something else” aspect of cost-disease has significantly affected the status (and perhaps the quality) of the work-force.

111

Sebastian H 10.26.12 at 2:48 pm

Yes, that is exactly Baumol. And that isn’t what explains the skyrocketing price of higher education, because the productivity constrained teacher is not getting paid lots more, certainly not enough to justify the price increase. The administrators, secretaries and IT people are either not in that position, or no more in that position than administrators, secretaries and IT people in the rest of the economy. Therefore, while Baumols cost disease may be a real economic phenomenon, it probably doesn’t explain much in this discussion.

112

JW Mason 10.26.12 at 2:50 pm

while Baumols cost disease may be a real economic phenomenon, it probably doesn’t explain much in this discussion.

Yup.

113

PJW 10.26.12 at 3:05 pm

Michael Saylor said on a recent appearance on the Charlie Rose TV program that it won’t be long before a Harvard education will be available on a mobile phone. I don’t know many of the details of this idea, but his comments were intriguing enough that I’m tempted to get a copy of his new book The Mobile Wave. Just speculating here but I don’t think it would be too big of a stretch to think that one day lab requirements could be satisfied in a virtual environment. Walter Benjamin anticipated this stuff in the long ago. Some of his thoughts about education and the medium he was working on in the Arcades Project are uncanny when held up and compared to the ideas in this thread and Holbo’s earlier one. And what happens when our brains are directly connected to Google Datya Centers? Think something and know it. My dad, 76, says he wants no part of that Brave New World.

114

bianca steele 10.26.12 at 3:07 pm

RDT:
Not sure what you mean by “that,” and I’d be happy to hear from someone on the other side of the pond some more details about A-levels, which I know about mostly from novels, mostly by people older than fifty or sixty. If you mean “substituting for college-level introductory courses, for people who will specialize in the subject” I think the answer is “no,” for the most part. Maybe “yes” in languages, maybe “yes” in calculus (is that what A-level math consists of?), maybe “yes” for science exams in some schools. I could be wrong, but AP Literature and History (usually taught in place of regular high school courses) don’t seem to me the same thing.

115

LFC 10.26.12 at 3:08 pm

garymar @98
There are people, usually older people, who attend community college classes because they desperately want to learn. … For them, reading literature, for the first time in their lives, is truly a transformative experience.

I’m sure that’s true (and is one of the several or many good things community colleges do). A question I’d raise — to which I don’t know the answer — is: for how many of those people would the experience have been transformative when they were 18 or 19? For some, no doubt, but not sure how many.

Harold @105: small correction — Robert Hutchins. (iirc)

116

AcademicLurker 10.26.12 at 3:21 pm

Michael Saylor said on a recent appearance on the Charlie Rose TV program that it won’t be long before a Harvard education will be available on a mobile phone…..Just speculating here but I don’t think it would be too big of a stretch to think that one day lab requirements could be satisfied in a virtual environment.

When I was in grade school, I was assured that by the time I was an adult it would be routine to pop over to Paris in the morning (I grew up in Los Angeles) for some shopping & lunch and be back home for dinner. Funny it never happened.

I’ve also noticed a conspicuous lack of domed cities and flying cars. Didn’t Water Benjamin predict those? Maybe it was Adorno.

117

LFC 10.26.12 at 3:24 pm

JW Mason @109:
I’m not disagreeing (not v. knowledgeable about the economics of higher ed), but I’d point out that you seem to be ignoring that private institutions form a v. substantial — don’t they? — part of the US higher ed system. Yes, the public part of the system shd be better funded and may remain relatively affordable for many, but there are prob. tens of thousands of students, prob. more than that, who attend private institutions. Those institutions are not going away, they are too entrenched historically and otherwise, and I don’t think that you can ignore them and what they’re doing in terms of prices etc.

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JW Mason 10.26.12 at 3:29 pm

LFC-

Sure, again, it’s like Social Security: We have a public system that is universal and works really well, but should be bigger; and then we have a hodge-podge of private systems that run the range of inefficient to outright scams. We shouldn’t ignore the latter, of course, but what we really, really shouldn’t do is use the problems of private system to argue that there’s something wrong with the public system and it needs to be replaced. Which is what John H. is doing here.

119

VeeLow 10.26.12 at 3:35 pm

is Clay Shirky still around? his position looks to be in ruins……

120

Harold 10.26.12 at 4:28 pm

I see many students for whom college is not fun. I think it could be argued that many aspects of college are or were quite punitive and leave people (including the faculty) with the feeling that they can never measure up to some unstated ideal and are failures; or if they are successful, that they are frauds — I think Anthony Grafton wrote about this. While we are thinking about ways to reform the economics of college perhaps this could be addressed.

Not that everything should be “fun” of course, but things that one is going to spend years doing should at least be rewarding in some sense.

121

Tim Worstall 10.26.12 at 4:35 pm

“Yes, that is exactly Baumol. And that isn’t what explains the skyrocketing price of higher education, because the productivity constrained teacher is not getting paid lots more, certainly not enough to justify the price increase.”

Oh no. Hang on now.

That productivity constrained teacher has had pay rises a little over inflation. Not much. But inflation is being measured as the average of services inflation and manufactures inflation. And as we’ve been saying, productivity in manufactures has been increasing faster than in services. So the cost of the labour component for manufactures has been falling (indeed, in many manufactured items, as well as food, we’ve seen disinflation over this time period…..especially if you want to enter the minefield of hedonic adjustments).

That the productivity constrained person in services has just been getting the same sort of pay rises as everyone else doesn’t disprove Baumol. It is Baumol.

And thus services will rise in relation to the cost of manufactures.

122

GiT 10.26.12 at 5:08 pm

@101: “Second, the trend in recent years in Higher Education is for graduate students and temps to take on more and more of the teaching load. In which case you would expect the cost of labor to be falling, rather than rising. So what gives?”

One could also cheapen the price of a symphony orchestra by replacing professional musicians with high school band students.

The problem, I guess, is that the difference in quality in music is much more concrete than that in education.

Also, my understanding of Baumol’s is in line with Tim’s. It’s not a question of whether teacher pay is rising absolutely, it’s whether it’s rising relative to the pay of, say, an autoworker, even though the professor is pumping out the same x-hundred students/year while the autoworker now produces 3 times as many cars per year.

123

RDT 10.26.12 at 5:22 pm

Regarding AP exams… Again, I think the range of higher-ed options in the US confuses the issue. For many top-tier (to use a lazy shorthand) a high school schedule full of AP classes has become the expectation: AP History is what a “good” high school history class looks like, and most science majors enter competitive colleges with at least some calculus.

On the other hand, state schools give credit for AP exam scores of 3 and above in a wide range of subjects.

124

RDT 10.26.12 at 5:42 pm

@ PJW (113)

One of the questions underlying this whole issue is whether a Harvard education is primarily the classes you take, or whether the 24-7 interaction with a large number of intellectually engaged peers is a significant part of its educational value.

Making the information in college level courses available inexpensively isn’t a problem — there have always been books, and technology provides somewhat more interactive formats. But I think many of us feel that there’s to a college education than that — and that “more” is the expensive part (which I think is what John H. was trying to get at with his Club-Med analogy, if I can dare mention it again).

125

Lurker 10.26.12 at 6:00 pm

Not sure what you mean by “that,” and I’d be happy to hear from someone on the other side of the pond some more details about A-levels, which I know about mostly from novels, mostly by people older than fifty or sixty.

I cannot talk for the British A-levels, but I can talk for the German-type abitur system. There, the academically tracked high school aims for students who are able to start university studies without an academic “core” in the college curriculum. For example, in the Finnish high school curriculum, the obligatory philosophy course has the following contents:
*the concept of “philosophy”, the nature of the philosophical questions and their relation to practical, scientific and religious questions, the main areas of philosophy
* the basic questions on the nature of reality: relation of the spirit and the matter, freedom and determinism
* main ontological viewpoints and their relation to scientific and everyday viewpoints: knowledge, truth and justification, relation between a priori and a posteriori in the formation of knowledge
* the relation between the individual and the society as a philosphical question, concepts of “justice” and “freedom”
* concepts of “right” and “good”, the nature of the moral values and their relation to reality and other values. Different views on the good life, beauty and happiness
A typical question in the national Finnish high school leaving exam on philosophy would be: “A human being is responsible for many things, for example for his own deeds. How are the limits of responsibility drawn in moral philosophy.” (This question, the number 3 in spring 2012, expects an answer of about handwritten 1-2 A4 pages.)

In history, the obligatory course on international political history includes, inter alia, the following topics (the course covers the period from 1870 to present, here the topics for post-WWII) :
* theories of the cold war: USA and Soviet Union as the leaders of a bilateral world.
* the ideological, economical and military fronts of the cold war
* the nature of the crises of the cold war
* Germany as the hot spot of the cold war
* the role of China in international politics
* the break-up of the Soviet Union and movement to unilateral world
* international peace attempts
* the 3rd world as a part of international politics
* the Middle East and its problems
* the changing position of the USA in international politics
* new international structures
A typical national final exam question (number 4, spring 2012) testing these points would be: “Compare the Berlin and Cuban crises (1958-1962) from the viewpoints of their parties.” Again, this question should be answered with an essay.

As far as I can see, these contents are surprisingly near the core of a typical US “liberal arts” education.

126

GiT 10.26.12 at 6:09 pm

“One of the questions underlying this whole issue is whether a Harvard education is primarily the classes you take, or whether the 24-7 interaction with a large number of intellectually engaged peers is a significant part of its educational value.”

…or 24-7 interaction with a large number of the progeny of the very rich.

http://www.thecrimson.com/column/the-red-line/article/2012/9/27/harvard-real-diversity/

127

Sebastian H 10.26.12 at 6:58 pm

Tim I can’t tell whether you’re just agreeing with me in different language or disagreeing. You’re right about your description of Baumol’s cost disease but I’m having trouble seeing how or why you think it is important to the discussion of skyrocketing university prices. Professors have been getting small increases above inflation over the past thirty to forty years. That may or may not be due to Baumol issues or other things. College tuition on the other hand had been positively skyrocketing compared to inflation. This suggests that whatever the issue is (or issues are) Baumol’s cost disease as regarding teachers is not likely to be a very important factor.

And since teachers are the most obvious input subject to Baumol’s cost disease, and since administrators on the other hand really aren’t (especially compared to administrators in all sorts of other sectors). It isn’t clear at all that a discussion of Baumol’s cost disease is adding to the conversation in any obvious way.

Now there are non obvious ways I could theoretically wedge it in. Perhaps Baumol’s theory would predict instructors should be getting paid three or four times what they make now, but administrators are capturing it all in personal pay and hiring administrative aides and such. (Note I’m not advocating this position, merely sketching the kind of relevant-to-existing-facts discussion where Baumol’s cost disease would be relevant).

But actual teacher salaries aren’t reflecting Baumol’s cost disease issues, so either Baumol’s cost disease is not relevant to this discussion, or the locus of its relevance has not been identified by those raising it.

It is an analytic tool. We should use it for relevant analysis, not just invoke it and think we are done.

128

AcademicLurker 10.26.12 at 7:07 pm

I’m starting to suspect that the continual invocations of Baumol’s disease is largely an excuse to keep focusing the discussion of teacher salaries despite the fact that the available evidence makes it clear that teacher salaries cannot be responsible for the massive increase in college costs.

129

RDT 10.26.12 at 8:00 pm

@ GiH (126)

I was trying to avoid the “networking is the true value of Harvard” argument because I think the 24-7 nature of the most expensive colleges is central to the reason they are valued, and the reason they are expensive — even for colleges with a much lower median family income than Harvard’s.

130

Cato 10.26.12 at 10:07 pm

I don’t think faculty salaries per se can be blamed for the rising costs of higher education. I do think, however, that the resources devoted to faculty support can be. We faculty tend to like the fact that our libraries are well-stocked and well-staffed. We are happy that our IT departments devote considerable time and resources to making sure that we are well-connected, and that we are well-supplied with gadgets and electronic goodies. We value the fact that our labs are state-of-the-art. We prize the fact that we can use funds and turn to staff devoted to helping us attend conferences and engage in various kinds of scholarly travel. And we need to acknowledge the benefits of having access to staff members devoted to helping us pursue grants and fellowship support. Well, these benefits are all, technically, counted as administrative costs. So, we faculty need to be careful when we complain about administrative bloat…

But, at the same time, I think these benefits/administrative costs are, to a certain extent, imposed on us, and that we faculty are frogs in the cauldron, not realizing how cooked we are becoming. Most of these baubles are justified because they are related to our research, and it is there where I think we need to re-examine institutional priorities and incentives. Teaching loads have been reduced because faculty have become, over time, more research focused. This is partly out of self-interest, but partly (I would argue mostly) because higher management (Deans and Provosts) has seen, correctly, that research expectations are a great way to keep the attention of faculty away from governance, and at the same a convenient tool with which to enact “speed-up” among the labor force.

We faculty are (when we are tenured) too exhausted and (before we are tenured) too afraid to make much of a stink about how our institutions have forgotten what their missions ought to be: to educate students. And please, spare me the wailing about how colleges and universities have as their primary mission the preservation and advancement of knowledge… Yes, that is indeed a mission, but if you lose the ability to finance that mission then you aren’t exactly doing a good job in maintaining it. We need to see that as a second-order interest. It is valuable, but it is not what pays the bills. The students pay the bills, whether via tuition or via alumni donations, and they are quickly figuring out that we faculty are sucking them dry: running away from actual teaching and mentoring because the institutional incentive structure dictates that we must. I don’t know a single one of my colleagues who would argue that our research/teaching balance is ideal. We all value teaching, and see the long-term benefits of it, but we are compelled to minimize our teaching in order to produce articles, books, and grant proposals – most of which will not amount to much in the long-term. Will we be failing our second-order interests if we produce half, or even a third, of the research we are currently pumping out? I doubt it. I think most would agree that the quality of what we would produce in a system where we could take more time to do it would increase. More importantly, we could devote more time to teaching, mentoring, and institutional governance. Re-focused in this way, we could dispense with much of the so-called support staff and toys that cost so much. Things that we enjoy but don’t need. These things are a pretty and expensive prison of our own design, and one that is causing us to lose focus and lose the interest of those upon whom we ultimately depend, our students.

131

Markos Valaris 10.26.12 at 10:24 pm

And that’s Baumol.

Well then Baumol really is a red herring here. If there is a university cost crisis, then it must be the case that the sort of household that used to be able to afford a university education now can’t do so. In other words, the share of household income that buys you a university education must be rising in an unsustainable way. If the Baumol cost disease can’t explain that even in principle, then why is it relevant to this discussion?

132

Salient 10.26.12 at 10:31 pm

Salient, in the 1990′s the students at Chicago didn’t do worse then today.

No relevance to anything I was saying. But thanks for playing!

So what do the additional legions of administrators add?

Blazing fast Internet, quality low-cost fairly comprehensive health care, accommodations for students with disability, and a complete local economy.

(Funny, I remember writing that already, for the umpteenth time… is the idea to play a backwards-in-time game, where my earlier post actually answers the questions you pose in reply to it? That doesn’t even rise to mid-tier quality trolling.)

133

BillCinSD 10.26.12 at 10:56 pm

Salient,

those aren’t actually administrators, those are overhead. 30 years ago, when I attended the school I work at now, we had a President, and a vice-President as our entire high-level administration, we now have a President, a Provost, two or three deans and I think 7 vice-Presidents. The student population has not changed

134

Salient 10.27.12 at 1:41 am

those aren’t actually administrators, those are overhead.

Hey, I’m not the one who decides what “administrative costs” means. The reason why overhead costs get lumped under “administrative costs” is opaque to me.

Regarding your school’s bureaucratization, I dunno, what is there to say? I wonder what those people do all day, and how much of their workload (if any) stems from maintaining a campus economy. (That’s not an attempt to defend their jobs or their salaries. If we want to reduce those jobs and those salaries, I think figuring out what these folks do all day seems like a good first step. Then we can ask, which of those administrative duties can be dropped, or transferred to the surrounding city? And, how can we fulfill the remaining administrative duties more efficiently and cheaply?)

135

clew 10.27.12 at 2:01 am

Friday night wiffling:

If the MOOCs and OpenCourseware work, and the problem isn’t just class sclerotics (my vote), then second best might be to figure out how to get an accredited university that does nothing but proctor tests to verify actual learning. It might also arrange both local and international groups of students studying one thing. They probably need list moderators with some domain knowledge — oh, there we have seminar sessions with the room costs displaced to “the cloud” (Hello, Aristophanes!)

Labs and fieldwork from PublicLaboratory and Make: ‘s ten thousand garages.

This is sort of wild optimism, and sort of thinking that if the Flying University could educate people so brilliantly, it’s not the cod-Gothic buildings. It might be the unity against a dire threat. I expect we can come up with an array of those.

I heard Neal Stephenson talk about _The Diamond Age_ to a group of Microsofties way back. A stock nerd asked if he really thought educating a child would take another human’s real-time interaction, given a perfect MOOC-analog. Stephenson said yes. The novel has a subtler take on it: a single human’s loving attention raises a child who can transcend her class upbringing. Dutiful employees playing the same role turn rich children into unfocused adults. Purely mechanical training produces a collective, because (I assume) all the love and attention is peer-to-peer.

136

Watson Ladd 10.27.12 at 2:28 am

Salient, Chicago had those things in 1990. Today it has many more administrators, while having the same things. What did the additional ones add? Also, do we really need a local economy? Universities have historically been part of the community, hence the Latin Quarter?

137

Salient 10.27.12 at 3:30 am

Oh go to hell Watson. “do we really need a local economy” was the point of my post.

138

Tim Worstall 10.27.12 at 4:01 am

“Professors have been getting small increases above inflation over the past thirty to forty years. That may or may not be due to Baumol issues or other things. College tuition on the other hand had been positively skyrocketing compared to inflation. This suggests that whatever the issue is (or issues are) Baumol’s cost disease as regarding teachers is not likely to be a very important factor. “

But this is the point. Baumol doesn’t require that professors get great big salary rises for it to become a problem (or an “effect” if you like).

Assume that professors get the same pay rises as everyone else in the economy. Just standard, average, wage inflation. Because the productivity of labour increases more quickly in manufactures than it does in services then, even with professors gaining only economy wide average pay rises, the price of education will rise relative to the price of manufactures.

The thing that Baumol enables us to understand is the rise in the relative price of education without there being huge relative pay rises for educators. That’s rather the point of it, that’s the insight.

“Also, my understanding of Baumol’s is in line with Tim’s. It’s not a question of whether teacher pay is rising absolutely, it’s whether it’s rising relative to the pay of, say, an autoworker, even though the professor is pumping out the same x-hundred students/year while the autoworker now produces 3 times as many cars per year.”

Quite. Thus the labour costs embedded in a car are declining relative to those embedded in education. Even if the salaries aren’t changing relative to each other.

Whether this is responsible for all of the rise in university costs is entirely another matter. I’d certainly support some of the other points being made: health care insurance for example. This has become much more expensive over the decades and labour costs are total compensation, not just wages. And we should note that health care itself suffers from the Baumol. And I wouldn’t be at all surprised if admin costs had risen: but then I’m willing to shout about bureaucracy at any time of the day or night. And some part of the increase in visible costs is obviously down to State aid falling. Plus the arms race in facilities caused by positional stuff.

Any and all of which might make up the complete answer. But there is still that Baumol problem in there. We could even use it to explain things entirely the other way around. It’s a general complaint I see on these pages that the conditions for TA’s, adjuncts, have become much, much worse over the decades. But, as some at least contend, the teaching bill at college hasn’t changed all that much. Which means we could point to the degradation of those terms for the TAs etc as being the reaction to Baumol. If the terms and conditions, the teaching structure, had remained the same then the teaching bill would have risen purely through Baumol. It hasn’t because we have changed the technology we use: instead of tenured faculty we’ve got cheapo temps doing the work.

Whether or not Baumol is the specific cause of the changes in relative prices is, to me at least, something of an irrelevance. For it’s still a problem within any service at all. A long term one. And one that needs to be met by changing the technology by which that service is produced. We might usefully consider whether the deterioration in terms for junior faculty has in fact been the system’s response to this very problem in fact.

139

mdc 10.27.12 at 1:23 pm

@131 ” If there is a university cost crisis, then it must be the case that the sort of household that used to be able to afford a university education now can’t do so. “

I think this is right. Net tuition is not sky-rocketing. At many schools it’s falling.

140

Guido Nius 10.27.12 at 3:35 pm

MOOCs beat Baumol as far as on topic but Baumol beats MOOCs 20 to 1 in comments, i.e. technology is a solution but technology alone is not the solution.

141

Guido Nius 10.27.12 at 3:46 pm

I mean [109] shows that people increasingly recognize the value of higher education and that more people get access to higher education whereas the original post, I gather, goes from the correct assumption that, at a personal level, access to higher education creates financial stress. The point then is not what happens with actual tuition rates but that we’ll need to be inventive in finding models that increase access to higher education without it meaning that so much financial stress is caused at the individual level (the data in [109] is averaging out over lower class people enrolling more but at a higher percentage of their class income).

This can be done in using technology implied in MOOCs, lowering the threshold of entry into the system without sacrificing the strengths of the current system (it not being a strength of the system to allow people regardless of income to get higher education in line with their talents and motivation).

142

Watson Ladd 10.27.12 at 5:28 pm

Guido, the top 30 or so schools in the US have a need blind admissions policy. The huge income issues are at the secondary level, where high schools differ dramatically in program quality, and at lower-quality schools where community colleges are very cash strapped, leading to the proliferation of commercial schools.

143

RDT 10.27.12 at 5:30 pm

A historical/semantic question (or maybe one for economists):

Why is the effect that Baumol describes a “disease”? It seems to me that its closely related to a rising standard of living — services cost more relative to things, because, overall, people get paid a wage that allows them to buy more things. I can see that if the increasing standard of living is accompanied by increasing income inequality, the effect is problematic for the people who don’t share in the income gains. But is it possible to have an overall increase in living standard without seeing the effect Baumol describes?

144

Jerry Vinokurov 10.27.12 at 5:45 pm

I’m curious as to whether the numbers on net cost of college factor in student loans (or perhaps “factor out” the loans, as in, subtract them from the net cost). That question is motivated by, e.g. this story, which indicates that student debt has increased quite substantially over at least the last decade. All of which together seems to indicate that there’s some discrepancy between whatever it is that “net cost” is calculating and the cost incurred by actual students.

145

Jerry Vinokurov 10.27.12 at 5:50 pm

The top 30 schools are actually a very small fraction of all higher education institutions in the US. Most flagship state universities, including the UC’s, are decidedly not need-blind at all.

146

Katherine 10.27.12 at 5:58 pm

maybe “yes” in calculus (is that what A-level math consists of?)

Hell yes. And some. Are you suggesting that someone could study maths until the age of 18 and not do some calculus?

147

GiT 10.27.12 at 6:18 pm

It’s pretty easy to study math until the age of 18 and not do any calculus in the United States.

…and to another post, many schools which used to profess to be “need blind” have switched to being “need aware.” Which is pretty much the opposite.

148

tomslee 10.27.12 at 6:20 pm

Forgive me if I’ve missed this in the A-level/UG year-one discussion.

The major difference I’ve seen between UK and North American education is early specialization. People generally do 3 or 4 A levels, but students in North American schools at a similar age usually do 7 or 8. Whether one is better than the other is a matter of taste.

Also, I’ve always found the age comparisons are made more difficult by the Sept vs Jan cutoff for the school year. My son (Canadian, born December 1991) was two years ahead of his cousin (British, born September 1992).

149

bianca steele 10.27.12 at 6:23 pm

Until very recently, calculus was always considered a college-level subject in the US. There may now be high school calculus courses that are not AP courses, even in public schools, but I have no evidence they exist.

150

Jerry Vinokurov 10.27.12 at 6:29 pm

My high school was rather weird in that we had an actual community college professor teach calculus on our campus. But it’s true that most high schools top out at “pre-calculus” (trig, mostly), with the better schools typically offering AP calc.

151

Katherine 10.27.12 at 7:49 pm

I can see of course that early specialisation (a la A-levels) can lead to more “advanced” learning, if you will, at an earlier age, but the International Baccaleureate Maths (Higher Level) course includes calculus. Maybe that’s the AP equivalent.

152

clew 10.27.12 at 8:20 pm

I thought calculus in high school was more common before universal high schooling; I think this should be covered in The Teaching of Secondary Mathematics, but I only have snippet view and while they mention calculus they could be talking about preparing for college courses.

153

ezra abrams 10.27.12 at 10:16 pm

I would like to register a complaint
Why is there no reliable, agreed on set of data to cover basic things like cost over time (at least since WWII), number of admins/FTE and other basic statistical facts.

I blame the professors: with all of the sociology, poly sci, econ and education professors, I would have thought that a few would have gotten their undergrads working on this.

The failure to provide basic data means we can’t have a rational discussion; this is, imo, a failure of hte professoriate, who, imo, think such things beneath them
(like where I live in newton MA, BC has a campus; you would think the engineers there would work on important stuff like quieting the horribly loud buses that carry students between campuses)

I understand that some questions – such as the number of admins /FTE student over time are hard to answer: is a person who maintains the wireless necessary for students to submit homework a teaching support person or a administrative drone ?
(I also note that people like FIRE and the goldwater institute and others who claim that there has been a large increase in admins/fte don’t address things like the change in the studentry, the change in pedagogy, much less ask a basic question like, has there been an increase in admins in private biz over this time period, reflecting a change in our society from mfr to service)

However, I urge all CT readers to join my complaint – why don’t we have basic agreed facts about higher ed on a professional website, so we can agree about things like change in funding over time ?

154

Salient 10.28.12 at 12:50 am

ezra, at the very least you’ll have to pen in a complaint-exception for Rita Kirshstein, Ph.D. at the Delta Cost Project, which hosts more or less exactly what you’re looking for in “a professional website” with “basic agreed facts about higher ed.”

I think most of the DCP publications don’t delve back any farther than the 1980′s, though. If you’re interested in digging a little deeper and farther back in time, I’d recommend the Higher Education Data Center (maintained by the American Federation of Teachers). They have normalized expenditures data, as well as employment statistics so you can compare headcounts. I’d also suggest the annual Digest of Education Statistics, published by the National Center for Education Statistics (a report published annually from the mid-60s to today). You’ll want to refer to Chapter 3 for aggregated data (‘Expenditures’ section), and Appendix A2 for their sources.

So, we do have basic agreed facts about higher ed on a professional website, so sure, we can agree about things like change in funding over time. The problem is, as you noted, nobody really knows what the fuck an ‘administrator’ is, and when you define it narrowly, you find most administrators’ core jobs fall into two categories. One is to investigate and reduce student attrition, and (when competent and successful) effectively pays for itself. The second, more senior-level role is to fulfill fundraising duties, essentially hanging out with awful people who have lots of money at university events, and catering to their whims in the hopes they’ll donate $12m this year to [whatever].

155

Markos Valaris 10.28.12 at 3:08 am

Argument from authority time! Baumol himself seems to think that his cost disease makes services expensive relative to manufactures but not unaffordable. Don’t have the time to actually read Baumol’s book right now, but here is the Economist’s Free Exchange column on Baumol:


A bigger slice of a much bigger pie
… Mr Baumol['s] most intriguing prediction: although [the costs of education, medicine, and the arts] will grow alarmingly high, they will remain affordable. In fact, buying power is growing much faster than medicine, education and the arts are becoming dearer . In a way, the disease produces its own cure. The real problem is not the cost disease, Mr Baumol argues, but knee-jerk reactions to it. The most likely response to spiralling budgets for publicly provided medicine and education is to shift provision to the private sector. But that will not cure the underlying disease.

If it happens, such a reaction rests on a mistaken premise: that the rising costs in the stagnant sectors make people poorer. Mr Baumol’s crystal ball says that in 100 years a live performance of a Mozart quartet will be vastly more expensive, but people will still be able to afford it.

So, here is an (armchair) hypothesis. The Baumol effect is real. Costs in education rise faster than inflation, but as they track average productivity, they are not actually in danger of becoming unaffordable from the point of view of the economy as a whole.

But the productivity gains of the last 30 years are not distributed equally. Median incomes have stagnated, despite the increases in productivity. So for much of the middle class university education really does become unaffordable. But then the problem is not the Baumol effect: it is rising inequality.

156

GiT 10.28.12 at 7:20 am

Well, the proximate problem is not the Baumol effect. It’s nonetheless involved.

157

Sebastian Holsclaw 10.28.12 at 8:35 am

I don’t understand how people here can keep citing the Baumol effect without paying attention to the actual salary data.

You can’t just say overall costs went up therefore Baumol.

The costs should go up in salaries *for the types of jobs which aren’t subject to productivity increases*. That isn’t ALL jobs. That is certain jobs relative to the economy as a whole. There is no reason whatsoever to believe that the administrative jobs with respect to education are less subject to productivity increases than administrative jobs everywhere else in the economy. There is some reason to suspect that actual teaching jobs might be less subject to productivity increases, at least so far.

Saying that ‘education’ is subject to Baumol’s cost disease is either hiding the ball, or not looking at the issue with sufficient granularity. Actual INSTRUCTION is subject to it, but does not in fact seem to be suffering from Baumol’s cost disease unless the necessary pay hikes are being absorbed somewhere far away from the actual instructors. If the easy case, instructors, does not seem to be suffering from the Baumol effect, why in the world should we believe that the rest of the sector is actually suffering from the effect?

158

Markos Valaris 10.28.12 at 8:44 am

It’s nonetheless involved.

Fair enough. But this is why it’s crucial to understand exactly what the Baumol effect is. The way you usually see it discussed, it’s taken to imply that current models for the provision of services such as healthcare and education are hopeless, because they render these services unaffordable. The proposed solution, almost invariably, is to open them to private sector “innovation”.

But if my (admittedly, amateur-level) understanding of the Baumol effect is right (@93), then this is not at all what it implies. It seems to me that, while it implies that the cost of services will rise faster than inflation, it also implies that the cost of services will rise slower than real income . This also seems to be the gist of Baumol’s own argument as summarised by the Economist (that’s the point of the quote in 155).

This, in my opinion, makes a huge difference. It suggests that the fact (to the extent that it is a fact) that higher education is out of reach for more and more families, that’s not because the university is somehow fundamentally misconceived as an institution, but rather because of the political economy of the last few decades.

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David Zaer 10.28.12 at 12:17 pm

Because no one has mentioned this particular aspect about “administrative bloat”, I will make a comment about the public’s expectations. People expect universities to provide more in the way of safety than in the past. They expect universities to take responsibility for over-drinking, for rape, for mental health. It is not just support for minorities, for LGBT students (as one comment pointed out).

I was just reading about Amherst University and their response to an article a student wrote about being raped and her experience. There is an administrator who is in charge of preventing sexual assault. That person resigned and there is going to be, presumably, a shake up in the way Amherst does things (according to the president of the university).

Fifty years ago there was not such an administrative support (adequate or not). There was drinking, rape and mental disease back then but it was all swept under the rug. Now it is more out in the open and university administrations have to deal.

It is a good thing for universities to deal with these issues. I’m not saying this is “bloat”. I am just saying these are things they do now they did not before. The public expects them to. It seems to me this is an expensive thing. Perhaps the public’s expectation of what a university should provide is driving the increased size of administration?

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Metatone 10.28.12 at 12:37 pm

Well said Markos Calaris @158.

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Watson Ladd 10.28.12 at 3:15 pm

Baumol effect does matter when the spending is provided by the state. A higher percentage of revenue goes to the state even if the state does nothing more, so political projects involving bathtubs lead to real cuts. But Baumol is not the same as the cancer that is administration. The Delta Cost project does not identify the percentage of salaries that are paid to non professors, which has dramatically risen at many schools.

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JW Mason 10.28.12 at 3:24 pm

By the way, anybody know what it costs to go to a CUNY community college for a year? $3,900, all in. Way cheaper than Western Governors, etc. And it’s a good education! Lots of super smart people teach at CUNY community colleges. Fellow named Corey Robin, for instance.

Anybody who continues to say “Baumol effect” in this conversation is a fool. And anyone who thinks that online education is the “solution” to the “problem” of rising higher ed costs is a fool and/or a dupe.

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christian_h 10.28.12 at 4:09 pm

Yeah, I am with JW Mason here (almost). I teach at UCLA, which has seen severe tuition increases lately. Why? Is it because our “product” (god, I hate that term… bt anyway) has become more expesnive to “produce”? Of course not. It is because of political decisions (which are not restricted to decisions made by politicians) that have been made on numerous leadership levels, since before the financial crisis struck. And most of those decisions are related to attempst – sometimes open, sometimes hidden – to transform public higher education into private profit. A big part of this is of course the sharp decline in state support, but this isn’t the whole story. Other parts are the responsibility of boards of regents (eg, how they organize the investment of funds – hint it might be related to their own business interests), and of course university administrations (eg, the money that wil be raised to build new labs, or [as at UCLA] conference centers etc that invariable end up being run ut of general funds).
But practically none of it has to do with the actual cost of instruction increasing.

I say I’m with JW “almost” because I do think that the public system, which does currently work by and large fine, can only take so much more stress. It’s similar to a person who never invests in the upkeep of their house. It will be fine, or by and large fine – until it collapses. Which is what we should be cncentrating on, politically. The rest, as JW says, is a diversion.

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christian_h 10.28.12 at 4:10 pm

Yuck. Apologies for the spelling massacre.

165

SusanC 10.28.12 at 4:12 pm

I’m from the UK, which may have a different situation from the US, but here goes anyway…

Earlier in the thread, maintaining the email was given as an example of a admin function. I think we’d consider computer officers as being closer to teaching staff than admin proper (although they are probably “overhead”) It’s pretty clear that if you want to teach a class that has the students using computers, someone is going to have to set those computers up, and if it isn’t a specialized computer officer it’s probably going to be the lecturer doing it. In any case, it’s clear that you’re getting value from the employee.

Admin “proper” I’d consider to be – for example – the people who make sure all the students have valid immigration visas and do whatever paperwork the government demands to show they actually are students (attending classes etc.). From the university’s point of view, these people are if anything even more critical than teaching staff – in that if their job doesn’t get done properly, the government will throw the university’s paying customers out of the country, depriving the university of its revenue stream.[*] They are also, in the institutions I am familiar with, overworked and underpaid. (Researchers might put up with low salaries in return for the added fun of doing research, but basically no-one is that enthused about doing immigration paperwork for a university when they could get paid more for doing the same function for a richer employer.).

[*] See London Metropolitan University for an example of what everyone’s terrified of happening.

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Meredith 10.28.12 at 4:41 pm

Paul @88: “The old days where state supported institutions were heavily subsidized by taxpayers is seen by many here as a golden age. But consider–were most students attending the “public ivies” were middle and upper middle class kids? What was the tax base supporting those kids? Was it fair to ask working class families to subsidize the education of middle and upper class kids?”

This question got me to thinking about issues not being raised here.
When I was at the U of Michigan for graduate school over 30 years ago, having come from a private 4-year liberal arts college and having grown up in a state with a thin public higher education system (NJ), one thing that deeply impressed me was the huge role the U of M and Michigan State played in providing the state with most of its teachers, doctors, dentists, nurses, engineers, and so on. I have no idea how to calculate, in some ideal world, the tax contribution working class people in Michigan should be making to these universities, which probably still draw most of their students from the middle and upper middle classes (whose previous educational and social situations give them advantages that make more of them eligible for admission to these schools). But it’s not as if only the students who attend these universities benefit from the education they receive there. The working class people of Michigan do, as well, and not in some pie-in-the-sky way. Their children’s teachers and their own doctors, for instance, were probably educated at U of M or M State.
When it comes to educating professionals like teachers or doctors, in most states in the US the public higher education systems play a huge role for each state. (States like MA and NJ, which for years could rely on private institutions to play the same role, have been playing catch-up over the last 30 years or so, belatedly building up their public higher education systems but doing so because it’s good for all the people of these states.)

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Jerry Vinokurov 10.28.12 at 4:48 pm

I believe Corey teaches at Brooklyn College, which is actually a senior (4-year) college within the CUNY system, and not a CC.

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Harold 10.28.12 at 5:02 pm

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GiT 10.28.12 at 5:03 pm

@165

The UC tried to do this. Of course they have an incentive to exaggerate, but…

http://www.universityofcalifornia.edu/news/article/26216

“The University of California is a key economic catalyst for the state, generating $46.3 billion in annual economic activity for California and contributing $32.8 billion toward California’s gross state product through direct spending and multiplier effects, according to an independent economic impact report.

Put another way, every $1 the California taxpayer invests in UC provides the foundational support that, supplemented by revenues from other sources, results in nearly $14 in overall economic output.”

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Guido Nius 10.28.12 at 5:21 pm

@161: on-line education is a solution to the many problems in increasing accessibility to higher education.

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Watson Ladd 10.28.12 at 5:31 pm

But did the doctors charge less because they had payed less in tuition? Or was this just a subsidy to those who could have afforded it? NJ still doesn’t have a large public system: its biggest export is college students.

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RDT 10.28.12 at 6:26 pm

Following up on what Markos Valaris wrote in 158…

Given the roughly finite hours a person can work in one week, wouldn’t we expect that the cost of services would track growth/decline in personal income, rather than inflation. If this were a barter economy, X could trade an hour of hairdressing service for an hour of Y’s calculus teaching service, or an hour of Z’s widget production. If Z got better at widget production, X might be able to get more widgets for an hour of hair dressing, but unless Y learned to teach calculus faster, X is going to get the same amount of calculus.

Given that the student-to-employee ratio at many private colleges is quite low, it doesn’t seem surprising that a year at college costs a significant fraction of a typical annual employee income. The problem is, that puts it out of reach of many families, and I think John’s basic question may well come down to “What is the least educationally damaging way of raising the student-to-employee ratio in higher education?”

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J. Otto Pohl 10.28.12 at 6:46 pm

161

Well than CUNY is a lot cheaper to attend for non-Ghanaians than the University of Ghana if that is the actual total including room and board. If it is only tuition than University of Ghana is a better deal for US students in the humanities, but just barely. We charge foreigners almost $6,000 to $9,000 a year total including room, but not meals. Figure another $2,500 a year to eat. Only $3,300 of that $6,000 a year is actual tuition for humanities and $6,400 out of $9,000 for sciences . In country tuition is a lot lower at about $1,000 year for sciences and $750 for humanities.

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Meredith 10.28.12 at 9:16 pm

Watson Ladd @172: “But did the doctors charge less because they had payed less in tuition? Or was this just a subsidy to those who could have afforded it? NJ still doesn’t have a large public system: its biggest export is college students.”
It would be mind-bogglingly difficult to figure out if those doctors whose education has been extensively subsidized by a state charge less than they would be charging if their education had not been so subsidized. Easier to track: It does tend to be true that greater subsidies encourage physicians to become PCP’s, since debt burdens then don’t make high-paying specialities look good just for financial reasons.
More helpful, perhaps, to think of teachers, who won’t get rich from teaching. (Personally, I don’t care if doctors are paid a lot — most of them more than earn it. Nurses and other health professionals should be paid more than they currently are — like teachers.)
True, NJ still has a relatively “thin” public system of higher education, but it’s a lot better than it was in the 50′s and 60′s. By contrast, Massachusetts, even though it has plenty of private colleges and universities (an amazing number, in fact, and a wide range — not all are Harvard or Amherst or Wellesley), with many others in nearby states (handy for people who don’t want to attend college too far from home), has invested enormously not just in UMass but in the whole state college and community college system, over the last 30 or 40 years.

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JW Mason 10.28.12 at 9:18 pm

I believe Corey teaches at Brooklyn College, which is actually a senior (4-year) college within the CUNY system, and not a CC.

You are right. For some reason I thought he was at BMCC. Well, there are lots of other good people teaching at the two-year CUNY schools, and the four-year one aren’t much more expensive.

I do think that the public system, which does currently work by and large fine, can only take so much more stress. It’s similar to a person who never invests in the upkeep of their house. It will be fine, or by and large fine – until it collapses. Which is what we should be cncentrating on, politically.

I don’t disagree with this, altho I do think the UC system is really an outlier in terms of how bad the underfunding is. But I really do think it’s important for us to talk about the other side — this is public system, without the “discipline” of markets or the pursuit of profits, which also has an exceptional degree of worker self-management, both individually (college instruction must be one of the last great redoubts of craft labor in the country) and collectively in departments. And it really works! People put a great value on it, and in fact come from all over the world to take part in it. Only focusing on the crisis side risks missing how the success of this public institution could be a model for other areas.

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JW Mason 10.28.12 at 9:26 pm

The old days where state supported institutions were heavily subsidized by taxpayers is seen by many here as a golden age. But consider–were most students attending the “public ivies” were middle and upper middle class kids? What was the tax base supporting those kids? Was it fair to ask working class families to subsidize the education of middle and upper class kids?

God, I hate this argument. I’m lucky enough to live just south of Prospect Park. Given that the neighborhoods north and west of the park are some of the wealthiest in Brooklyn, it’s likely that the users of the park are significantly higher income than the population of New York as a whole. By the logic above, this means we should object on “egalitarian” grounds to the park being maintained by public funds. Would’t it be fairer to gate off the park and charge admission, so poor New Yorkers aren’t subsidizing the strolling middle class?

I think it’s obvious how stupid and disingenuous it would be to show ones concern for poor people by proposing to ban them from the parks. But somehow people can make parallel arguments about higher ed with a straight face.

Look, we are not going to have great public institutions for poor people only. So our choices are either great public spaces that are used by the well-off as well as the working class; or chintzy, barely-adequate means-tested services. I know which side I am on.

Besides, a big part of the point of free or nearly free, universal world-class higher ed was that it let people move from the working class into the middle class.

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JW Mason 10.28.12 at 9:29 pm

CUNY is a lot cheaper to attend for non-Ghanaians than the University of Ghana if that is the actual total including room and board

CUNY is not residential, so that’s only tuition and fees.

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Salient 10.28.12 at 9:56 pm

The Delta Cost project does not identify the percentage of salaries that are paid to non professors

Oh fergawdsake, Watson. I also listed AFT and NCES as resources for that reason, among others, and I specifically indicated you’d need to look there if you wanted to “dig deeper.” (In this case, you want the NCES reports. I don’t know which ‘percentage’ you mean, out of 100 people or out of $100, but you can figure out stuff like the percentage of employees, or the percentage of total salary, by ordinary mathematical calculations on the NCES information. I’m not going to chew your food for you.)

This is what, three times now? Is this “reply either by asking for what I have already been given, or by asserting that I don’t have it and request it” a new schtick you’re debuting? Works wonders.

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Salient 10.28.12 at 10:21 pm

…eh, maybe that was too harsh. IPEDS (NCES) has more data than you could possibly want. This includes extensive human resources data categorized by position, as well as associated salary data. That’s what you want.

Specifically for salary data by type of employee, CUPA-HR (acronym for something something Human Resources which I’m too lazy to look up) publishes annual surveys, which are much more specific about positions. I think there’s a nominal fee to access some of their data (the blissful glory of university library internet), but you can find a few most relevant to this topic by searching for HigherEdJobs Salary Data (in fact that’s how I found out about CUPA-HR in the first place).

[No links because they've been sending my comments into auto-moderation lately. Normally I'd link.]

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John Quiggin 10.28.12 at 10:25 pm

@109 JWM, I read your data quite differently, mainly because I tend to see most things in terms of a sharp break from the 1970s onward. Looking at the period since 1980, I read your data as showing a 60 per cent increase in the cost of higher education, over a period when household incomes outside the top quintile were essentially static.

Not surprisingly, that translates into much slower growth in participation. And, from other sources, I believe that declining completion rates mean that there has been essentially no growth in the proportion of college graduates in the 25-34 age cohort since about 1980.

In this context, while I think the framing may be problematic, there really is a crisis.

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JW Mason 10.28.12 at 11:14 pm

JQ @181,

That’s a fair point — I might be pushing a little too hard against the crisis rhetoric. But the stronger point is that college costs fell even faster in the 1960s and 1970s than they’ve been rising more recently, so presenting the increase in college costs as the result of some kind of inevitable technological trend is clearly wrong.

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ezra abrams 10.28.12 at 11:32 pm

Salient at 154
thanks for educating me
I looked at the delta cost site; it is ok , but not great.

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Watson Ladd 10.29.12 at 12:10 am

Salient, I do have those numbers for a particular example. I think that the general trend of rising tuitions has a number of causes, and looking at specific cases might illuminate the dynamics at work in a way averages don’t. This of course requires more than just statistics. But thank you very much for telling me about these other sources.

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Martin Bento 10.29.12 at 4:48 am

On the question of whether there is a crisis, I don’t think we can look only at what the cost per student is. We have to look also at: a) are we providing good enough education to a high enough number of students, and b) how will whatever public subsidies we advocate compete with other public priorities in coming decades?

On a, the boomers were a large generation and the college system was greatly expanded to acommodate them. Gen X was a much smaller generation, but these extra slots were already in place and some additional expansion was done (although Merced may be the only new UC campus since the 60s, I believe the smaller campuses – Riverside, Santa Cruz, San Diego, Irvine – kept expanding for decades after founding, and that the UC system as a whole was expanding until recently). The result was that the Xers got higher participation than the boomers. Now, the Milennials are expected to at least match the participation of the Xers (everyone should go to college!), but with a population comparable to the boomers. That implies tons of new slots, which I am not seeing appear. And new slots under the same system will cost lots of new money however you slice it. Resultingly, I believe there are a lot of qualified milennials who are simply not going to college

If we are not going to have this generation permanently held back by this, we’re going to have to give them a way to make it back later. Of course, older students are admitted to all colleges, AFAIK, and usually there are a couple about. But college is not set up for them so it is difficult. There are several reasons, but the biggest is that older people can seldom disrupt their entire life for four or more years for the sake of an immersive experience. College needs to fit in with the rest of life.

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Salient 10.29.12 at 8:04 am

Do your “numbers for a particular example” really indicate that Chicago provided “blazing fast Internet” to its students in 1990. Really truly? Not that it needs saying, but — IT, in the sense we use the word today of connecting everybody to internet/email, literally did not exist in 1990. You knowwwww thaaaaat. Why did you saaaaay what you diiiiid.

With other stuff I said earlier, like “technology-intense instructional tools” — you could I guess argue a very strained interpretation of that that makes it true in 1990, and while it’s basically exploiting my vague language to say something I obviously didn’t intend, it’s also ‘arguable.’

Here’s some thoughts on 1990 vs. 2010s.

* The Americans with Disabilities Act passed in 1990, and universities have set much higher standards for quality and breadth of accommodation since then. If someone were to say that the Chicago administration of today is doing no better job of accommodating its students with disability than the Chicago administration of 1990, that would do today’s administration an injustice. They spend more per student, and have more people doing more things; students with disabilities receive better accommodation. It’s not fair or accurate to say Chicago had equivalent services in 1990.

* BillCinSD asked: Why so many more senior administrators? One reason to keep in mind — fundraising has become increasingly essential as state funding dries up, and a number of top administrative positions include substantial fundraising (read: schmoozing) duties. If you need more schmoozing, you need more schmoozers (plus people to do all the actual duties of the top positions, which employs a lot more people in mid-high administrative positions each doing something more specific — the bloat of fragmentation). But hey, getting even one million-dollar donation a year effectively pays for that administrator’s salary, so to speak.

* Why so many junior level administrators? Attrition. Universities have been ramping up their anti-attrition administration steadily for more than a decade now, and have been taking a multifaceted approach that requires hiring many more people to address the causes of attrition in many more different ways.

* Why a more intense focus on attrition? Loss of state funding. One student staying on instead of leaving early, pays for one administrator’s salary. Ten students staying on instead of leaving early, and you’ve made a lot of money off that administrator. Scale that up, multiplying by the number of administrators with anti-attrition roles. Then look at attrition-reduction goals set out by the university’s Senate. Proportionality? Proportionality.

So, yeah. We hire legions of administrators to deal with attrition in various ways, in part because we can’t afford to be losing that tuition money. That’s not all administrators, of course, but it’s a hell of a lot of them:

* Some administrators are assigned assessment roles, determining which students are likeliest to attrit.

* Some administrators are assigned contact roles, meeting with identified students, establishing a connection, learning their needs and concerns.

*Some administrators are assigned financial management roles, overseeing the suite of financial resources available to students.

* Some administrators are assigned explanatory roles, helping students understand the suite of financial resources available to them, including emergency services.

* Some administrators are assigned social-environmental roles, creating a “welcoming environment,” with adequate destress and participation avenues. (The more you can get students to participate in some non-academic activity on campus, the more likely that student is to stay on for the full term.)

* Some administrators are assigned social-environmental roles, letting students know about all those social opportunities.

* Some administrators are assigned adaptive-environment roles, helping students adjust to having left home for the first time.

* Some administrators are assigned academic supplementary-service roles, ranging from organizing regular tutors to providing walk-in homework assistance to hosting special review periods before exams… and lots of other stuff, it seems every week I get an email about some new study-help service for students.

All those administrators, even at the lower levels, command a compensation package that includes good health care. They are, therefore, costly.

Senior administrators are finding their time increasingly devoted to fundraising social activities, and have to delegate many more responsibilities, including coordination responsibilities, causing the bloat of fragmentation. (Coordinating responsibilities among a group takes a lot more overhead, time, and manpower than having one person oversee those responsibilities. The less coordination there is at the top, the more coordination there is at the bottom — at a higher cost.)

Now there’s also the administrators helping to build and maintain a complete local economy — housing, food, essential supplies, fun and recreation. While that’s exactly what we could scale back first, to answer JH’s question, it’s also exactly the stuff that you’ve lost when you mall-ify the university: there’s no longer a campus. For larger institutions in particular, that would mean there’s no longer a mini-city, and no longer the experience of living in a managed. But on the other hand, that works well with Martin Bento’s “College needs to fit in with the rest of life” proposal, as well as my own pet proposal that universities should be well-equipped to ensure interested local citizens can take an affordable class on an interesting subject now and then, just for fun / personal interest.

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Martin Bento 10.29.12 at 8:17 am

Salient, I’m with you on the last. I like community colleges for that reason, and would like to see them offer 4-year degrees, but they need to up the quality. Before I get deeper into this, I’m seeing if others are still up for the discussion. It always seems to be late in threads that I find the time for them. I’m not sure what you mean by your IT point though. At my University, I know for a fact that Internet and email were available to all who wanted them since the 70s. No web, of course. But email, usenet, IRC (old form of chat), etc. There seems to be a notion that the Internet did not exist prior to becoming a mass medium, and that’s incorrect.

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Martin Bento 10.29.12 at 9:32 am

Well, I probably shouldn’t have said “for a fact” for things before my time. It was probably Arpanet rather than the Internet proper back in the 70s, but I know from talking to some of my elders that terminals with access to that sort of functionality was available to students from around the end of the 70s. Many people used email before they used PCs.

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Meredith 10.29.12 at 1:56 pm

I started as a professor in 1976. My experience:
The 1980′s: desk top computers became the norm for all faculty and everyone else (though not all students). Just the beginnings of internet/email. (You can’t imagine how clunky all this was by today’s standards.) The 1990′s: email, internet, web sites and so forth gather steam and by end of decade have become entrenched way of life (but still not efficient or reliable in the ways we take for granted now — early 90′s, for instance, operate with the lament, “world-wide wait”; I can remember it was the late 90′s when grad programs began requiring letters of rec be submitted online, but their sites didn’t work well — real pain). Also in 1990′s: increasing use of computing for various aspects of teaching and research (beyond numbers-crunching research, for which computers had been used since the 1960′s — punch cards and all that).
In other words: Enormous investments (material, personnel) made during 1980′s and 1990′s as faculty, staff, libraries — world — became digitalized.

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Sebastian H 10.29.12 at 3:39 pm

Those enormous digital investments largely happened in the rest of the working world too. There, it generally did not lead to a price explosion.

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J. Otto Pohl 10.29.12 at 3:50 pm

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We have computers here in Africa too, but tuition is a lot lower. The Ghanaian students are subsidized. So $750 a year tuition for undergraduate history students does not reflect the real price. But, an Obruni paying full freight is only paying $3,300 for tuition. I am not including the fees here. The difference between here and the US is not having computers and internet. It is the fact that salaries are two to four times higher for faculty in the US for the same job.

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JE McKellar 10.29.12 at 4:17 pm

With regards to IT in education, how much of that increased productivity has gone into simply teaching students more? Not that students are necessarily learning more, just that instructors are presenting more information in more elaborate and expensive ways, which soaks up any productivity gains generated by the new technology. Like with health care, the professionals want to do as much as they can to help their clients with the resources they have at their disposal.

More to the point, though, is that higher ed now seems to be more about sopping up the unemployed and underemployed than actual education or mere job-training. The “everyone has to go to college” idea (186) is grounded in a real lack of alternatives for both the young and the old. Even more so, the new marginally-attached precariat and the ubiquitous 29-hour-a-week service worker take a half-hearted stab at education just to give some structure and dignity to their lives, and maybe defer some student loans.

What that means is that the system of higher education in this country is increasing coming to be a highly-expensive jobs and social services program, with associated costs that have nothing to do with actual teaching. The “managed-city/club-med” analogy might be a reasonable place to start thinking about cutting costs, but in reality, maybe all that structure and social management is the real function of the universities, and education a mere pretense. If we cut it, far worse things could happen- loss of faith in the meritocracy and rational structure of society, for a start.

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SamChevre 10.29.12 at 5:46 pm

Those enormous digital investments largely happened in the rest of the working world too. There, it generally did not lead to a price explosion.

Right; that’s because in the rest of the workign world, the computers replaced employees or deskilled jobs; in academia, they enhanced the quality and comfort of the jobs.

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Ragweed 10.29.12 at 6:05 pm

One comment on WGU – as it was originally conceived, WGU is not really supposed to be an alternative to a 4-year undergraduate degree for high-school graduates. Its intended students are mid-career adults who need credentialling, or, potentially, a career change. As part of that goal, it also includes placement exams that allow students to apply existing knowledge and skills to place out of classes – so if one has been in materials handling or bookeeping for 15 years they can place out of a lot of introducatory classes and get to what they need to finish a business management or accounting degree. Likewise someone with an AA level nursing degree looking to get a BSN.

WGU is meant to be an alternative to the predatory online for-profit scam. Their degree offering is almost identical to that of Pheonix and other for-profits, and all of the marketing I have seen for them is aimed at drawing students from the for-profits. If anyone is suggesting that the WGU model be expanded to replace 4-year brick-and-morter college experience for high-school graduates, then they really miss the point of both.

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Martin Bento 10.29.12 at 7:35 pm

Now we’re on computerization. Sorry for my contribution to that. This discussion keeps seeming to wander off into minor issues. At a certain level, it doesn’t matter why college is more expensive. From what I can see, we have not expanded capacity to meet the educational standards we expect of the current young generation. No one thinks it OK for them to be less educated than the Xers, right? But there are many more of them, and not that many more high-level college slots. Even if college were still free, it would not solve this problem.

We also have to look at what will be competing for public dollars going forward. Dealing with global warming will be expensive, including indirect expense in lost productivity. Not dealing with it, the course to which we are already in part committed, is much more expensive still. The old age of the boomers will be a real drain. No, that is not a reason to privatize Medicare. Private insurance is less efficient and therefore makes the problem worse. But saying that does not solve the problem. I’m looking at a college system that should be much cheaper and much larger than it is, and, regardless of my preferences, I’m just not seeing the public money to support this showing up.

So we should look at other approaches. I’m not sure that online is so bad for the specific lecture component: you can rewind over things you didn’t quite follow, skip things you already understand, pause to take notes as copious as you like, schedule viewing for when you are in your best state of mind to absorb it, bookmark important points, and designers can interpose short quizzes or essays so that you instantly translate what you just heard into active knowledge. What magic of stage presence overrides all that? I had some lecturers who were highly theatrical, and as interactive as one can be with a large group. Something would be lost there. But that is not most. And video’d lectures means the best lecturers can be enjoyed by everyone.

I’d like to see community college instructors become more like section leaders, guiding students and working through lecture material. In person should be more for tutoring than lecturing, and doesn’t necessarily require tutors that far in advance of the student.

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JW Mason 10.29.12 at 10:47 pm

martin Bento,

May I respectfully suggest you read something about teaching, like say Ken Bain’s What the Best College Teachers Do? The idea that a large part of any good college course consists of one-way lectures which the students passively spectate, as if they were watching a tv show, has little or nothing to do with what happens in any good college classroom.

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JW Mason 10.29.12 at 10:48 pm

I’d like to see community college instructors become more like section leaders, guiding students and working through lecture material.

This is a stupidly ignorant and insulting thing to say.

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Colin Danby 10.29.12 at 11:38 pm

What JWM said. For the whole thread.

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Meredith 10.30.12 at 4:29 am

I can’t believe I still have power (electrical, that is)! In celebration, I second Colin Danby and would note: teaching is mostly listening. That’s true even when the teacher is doing most of the talking (as when lecturing, briefly or extensively), because even then any decent teacher is actually listening, every moment, to lots of people, each person in front of you, and many others. You might say you’re a kind of conduit, not just between text/object of study/past/(whatever) and students right there, but also between present and as-yet-unknown future. (Okay, I’ll try to resist the electricity/connectivity metaphor, but I will say you could call this is an AC rather than DC model.) What every teacher, from kindergarten on, realizes (however imperfectly) is each student’s need to be heard — and then to hear new things, to be challenged, to be made new — and then to be heard again. And to enter a larger community of conversation, thereby. This dialogic world is the one in which teachers say, ingenuously but accurately, that they learn more from their students than they teach them.

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john c. halasz 10.30.12 at 6:54 am

Haven’t read the thread, but I posted this link here before:

http://www.npr.org/2012/01/01/144550920/physicists-seek-to-lose-the-lecture-as-teaching-tool

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Martin Bento 10.31.12 at 5:46 am

The link gets towards some of what I’m suggesting. The lectures can be dealt with, perhaps better, through interactive media. (I’m sorry. I don’t buy the notion that someone speaking to a group of over one hundred people, with perhaps no questions at all, is mostly listening. I think that is only possible if you stipulate psychic powers.) If you want to get rid of the lectures entirely, you have to replace them with something, and more small group interaction with professors just makes things more expensive. And for “top” professors, more interation with more people will not be possible, at a minimum because “top” is a positional assessment, so the number of “top” professors cannot be much increased, but the number of students needs to be increased. So more peer-learning, and a lot of interaction with less-than-top teachers, where the quantity and quality of the interaction can make up for the lesser qualifications.

And new things are possible now. It used to be that if you wanted forcused discussion with intelligent and well-educated people beyond your personal circle of friends, that mostly happened at college. But that is pretty much what happens here. If it still does not have the intensity of a good seminar, that is largely because little is at stake – it is very rarely that a Crooked Timber comments thread matters much to anyone but the participants, if to them. But the stakes could by raised by an institution interested in raising them.

But if you don’t want to hear about such impersonal ideas, what do you propose? More public support? Then you have to address the political realities of this and do so in light of the competing priorities clearly visible ahead, some of which I outlined earlier. Mason tried simply denying that there was a cost problem, but Quiggan forced him to back down on that. And that is without even getting into the problem that there are insufficient slots at the higher levels for the current generation, which I have seen no one even address.California has 400,000 on waiting lists to get into community college. I can’t subscribe either to Mason’s notion that Americ an higher ed in general is just fine thank you.I went to community college and to state university, so I am no Harvard snob, but I run into too many college graduates, even people with advanced degrees, who cannot think critically, and who do not seem to have a high level of general knowledge. If our higher educational system were so good, the results would be visible in the college-educated population.

It seems the prevailing approach here is to deny there is a problem, argue about the cause of the problem, and personally insult anyone who tries to suggest another approach. The first and last are counter-productive, and the second only useful if it brings a solution in tow.

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Substance McGravitas 10.31.12 at 6:53 am

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