Wednesday, June 20, 2007

Higher Education in Michigan

By Richard Vedder

No state in the Union was hammered harder by the 2001 recession and by globalization than Michigan, the home of America's automobile industry. For several years, Michigan had the nation's highest unemployment rate, and even negative economic growth. Consequently, the state legislature reduced appropriations to its colleges and universities significantly. To hear my Michigan friends (such as former University of Michigan president Jim Duderstadt) tell it, the university system was under unprecedented financial attack and quality education was endangered.

Now to the evidence. A few minutes ago (9:30 a.m. EDT) the Mackinac Center of Midland, Michigan, in cooperation with CCAP, released a new study prepared by Whiz Kid Matt Denhart and myself. It is a small prototype of broader studies of state higher ed systems we hope to do in cooperation with the State Policy Network and the Center for Higher Education Excellence over the coming year, utilizing our new uber researcher, Andy Gillen, the whiz kids, and myself.

What does the CCAP/Mackinac Center study say?

* Revenue data self-reported by the colleges to the U.S. Department of Education show that in real per student terms, resources available to the schools were generally rising in the early years of this decade, albeit perhaps less than the schools were accustomed to having them go up.

*There are vast differences in per student spending between Michigan's institutions of higher education. Some of it is explainable by large research grants and medical facilities at the flagship Ann Arbor campus of the U. of M., but some of these differences are less easy to explain. Why, for example, does Western Michigan University spend nearly 40 percent more per student than Central Michigan University? Do the more costly schools offer a better education? Who knows? Who cares? Where is the Michigan legislature and governor on investigating these differences?

*Despite allegedly highly stringent financial conditions, revenues rose more than expenditures in this depressed period, suggesting university cash balances actually increased.

The underlying IPEDS data used are not pristine in their accuracy and comparability, although they are reported by the schools themselves. And some institutions (Ferris State, for example) did not have spending increases in this era. And there are other issues not fully explored, such as why Michigan does not have a larger proportion of its adult population with college degrees, despite being generous in higher education funding over much of the least three decades. As a general rule, for example, Michigan spent more than fellow large Midwestern industrial state Illinois, but had fewer college graduates. Matt and I are exploring that relationship fuller. Stay tuned.

Kudos to Michael LaFaive and his colleagues at Mackinac for the professional job they have done on this study. They are great people to work with.

To see the new study, go to

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