Friday, May 09, 2008

More International Perspectives on the High Cost of College

By Richard Vedder and Jonathan Robe

Yesterday in this space the point was made that even if you believe the Baumol thesis that college is inherently highly costly because of the difficulty of improving productivity, why would that lead to much higher costs in the U.S. than in other roughly comparable industrial nations. Today we want to bolster that argument a bit.

Some relevant OECD data on college costs, etc. are in the table below. They show that the U.S. spends roughly double as much per student as such peer nations as Britain, Germany, France, Japan and Australia and considerably more than neighboring Canada.

Table 1

You might say, "Professional workers make more in the U.S. than in these other countries," thereby explaining the differences. Not so. We obtained data on senior secondary (high school) teacher salaries for some of these countries. Table 2 looks at the number of college students than can be educated for the equivalent of one year's employment of a long-time (15 year) high school teacher.


For the non-U.S. nations you could educate three or four college students for what it cost to hire a high school teacher --whereas, in the U.S., the number is less than two.

As indicated in the earlier blog, all of this cries for explanation. If it is all explained by greater research efforts in the U.S., the cost of this research is greater than the costs of instruction --meaning it is an extremely expensive proposition. I suspect the socialization dimensions of higher education --the football teams, elaborate student services, etc., are a big contributing factor. But all of this bears more investigation.

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