Tuesday, December 04, 2007

Two for One: Another Reason for the Tuition Explosion

By Richard Vedder and Matthew Denhart

College professors, who join campaigns with a drop of a hat to save the whales, slow down global warming, or exhort the virtues of same sex marriages, have been pretty slow to jump on the bandwagon to hold down tuition increases. Why is that? Don't professors embrace the idea that greater affordability of higher education helps people realize the American Dream? Isn't cheap education a path to greater income mobility and greater equality of opportunity? They certainly are, and professors and their bosses (deans and university presidents) proclaim that when they hold their hat out for money from taxpayers and major donors.

Some recent statistical analysis that we have done with respect to public four year universities, explaining the difference in average full professor pay between states, suggests that professors have good reason not to fight tuition increases. Each one dollar increase in tuition charged per student is associated with a two dollar increase in annual professorial salary; similarly a dollar more of state higher education appropriations raises salaries as well, albeit not quite as much as higher tuition charges.

We also learn that, other things equal, professors at big schools (which tend to be more research oriented) tend to make more than ones at small institutions. Additionally, the more liberal the state (as measured by the percentage voting for John Kerry in the 2004 presidential election), the higher salaries are (liberals help their own?). Compare a state with 55 percent voting for Kerry with one where the percent is 45 percent. We predict salaries would average $4,721 more annually for professors in the bluer, more liberal states.

Indeed, one reason professors tend to be liberal may be that being so is financially rewarding. High levels of appropriations (which liberals usually favor) mean higher salaries. By the way, early results on university presidential salaries suggest that some of the same factors apply (each added dollar in tuition is worth five dollars to the prez, although the results are less robust statistically).

We have made the point before, but added university resources inevitably end up, in part, going to provide added income to the major university players. They want big spending, higher tuition levels, etc., in part to support the good life --higher salaries, perhaps lower teaching loads, nicer facilities to work in, etc. There is nothing immoral or even surprising about it, but it does mean that a little cynicism is in order when university presidents proclaim the crying need for tuition increases several percentage points above the overall inflation rate.

2 comments:

Chris said...

[[Additionally, the more liberal the state (as measured by the percentage voting for John Kerry in the 2004 presidential election), the higher salaries are (liberals help their own?). Compare a state with 55 percent voting for Kerry with one where the percent is 45 percent. We predict salaries would average $4,721 more annually for professors in the bluer, more liberal states.]]

Would this not simply be a funtion of the fact that our nation's best universities (and those likely to pay the best) tend to be located in the blue states. Just looking at what I consider to be the three best collections of universities in America: the ivies, the CIC (Big Ten + Chicago) and the UC system finds them located overwhelmingly in moderate to liberal states. Were one to examine the correlation between a state's likelihood to vote for John Kerry and its likelihood to have large numbers of National Academy members, Nobel Laureates or Guggenheim Fellows, I'm guessing one would find the same linkage.

Haris said...

Also, aren't blue states, generally, richer than red states? The coasts have higher price levels than the midwest and the south, so higher pay in more costly states also makes sense.