Thursday, May 29, 2008

Research or Lobbying?: Higher Ed Research Today

By Richard Vedder

This is a year of momentous policy changes in Congress, and the higher education establishment is using all the arguments at its disposal to push for more money and less regulation from the Feds. This all came back to me as I was sitting on a plane yesterday reading a book I should have read a year or two ago, namely What's Happening To Public Higher Education?, a book edited by Ron Ehrenberg, and originally published by Greenwood Press and then reissued by the Johns Hopkins University Press.

The book argues that public higher education is in crisis, that stagnant state government spending means more costs have to be absorbed by others, and that public colleges are declining relative to private ones in terms of the ability to pay good faculty, attract good students, etc. This is starting to have qualitative effects, as, for example, more adjunct and part-time faculty are being used instead of tenure track full-time instructors.

There is something to be said for these arguments. But there is almost no mention of the other side of the coin --the cost explosion in higher education. It takes vastly more staff to educate any given number of students than a generation ago while it takes vastly fewer staff to make a given number of automobiles. In autos, also, the quality of the goods is clearly rising over time --something that may, but may not, be happening in higher education. Incentives to innovate in higher ed are nearly nil. The lack of a good bottom line favors cost-enhancing strategies, such as schools trying to spend more money to improve their US News & World Report rankings. Real salaries of senior faculty have soared at top private schools (raising rankings), so arguably the problem is not that the public schools are raising salaries too slowly, but the private ones are raising them too much, in some cases encouraged by public policies. None of these possibilities is even acknowledged --in a 17 page list of references, my book on higher education costs is totally ignored.

What I dislike is the one-sidedness of the arguments-- so much for the dialogue, give and take, and intellectual diversity that colleges always wax eloquent about when they are trolling for dollars. Also, I abhor the inherent conflict of interest THAT IS NOT EVEN ACKNOWLEDGED TO EXIST of professors lamenting the lack of more government money. There is good empirical evidence that every new dollar of state appropriations means a dollar or two more in annual salary to senior faculty at state schools. Yet in the analysis of 10 state systems in the Ehrenberg book, in nine cases the work was done by employees in those systems who directly benefit in a pecuniary fashion from the remedies being proposed. In most fields, as a matter of good ethics, persons disclose their personal relationships and acknowledge the potential for conflict of interest. But not in higher education.

Now I think Ron Ehrenberg is both a good economist and a decent, honest person. He is just following industry practice. Why isn't research on American higher education done more by non-university persons, at think tanks like CCAP, or by professors in other nations without a pecuniary interest in the outcomes they are advocating?

Let me give one illustration, from the first essay by Michael Rizzo. We are told:
"Real ...expenditures per student (less dollars spent on sponsored research) in public education...grew by more than 3 percent a year (130 percent overall). As a result, although state appropriations in 1974 were generous enough to cover 78 percent of the cost of schooling, in 2000 this support had fallen to just 43 percent."

To Ehrenberg, Rizzo et al, the problem is that students (via tuition), private donors (through contributions) and others are picking up more of the tab. To me, the far bigger question is: why are costs per student more than doubling in real terms? Are their qualitative improvements justifying this? I doubt it. The cost explosion is a fact of life, a given, an immovable fact to the higher education establishment, leading to cries of "more" "more "more'. It is time to look at college finances differently. It is time for independent observers without vested interests to dispassionately look at the evidence --how U.S. spends far more per student than most other developed nations, how learning has stagnated (probably), etc. etc.

I am increasingly convinced that reform will have to be imposed from outside --the traditional not-for-profit higher education community is incapable of changing in ways that are consistent with both popular opinion and economic imperatives.

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