Economic Challenges in Higher Education
reviewed by Arthur Hauptman - 1993
Title: Economic Challenges in Higher Education
Author(s): Charles Clotfelter, G. Ehrenberg, Malcolm Getz, John J. Siegfried
Publisher: University of Chicago Press, Chicago
ISBN: 0226110508, Pages: , Year: 1991
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Economic Challenges in Higher Education is a significant contribution to the higher education finance literature, which has become seriously depleted in recent decades. This statement is not intended as a left-handed compliment. Rather it is a reflection of the paucity of recent good work in a once proud field of study. This recent absence of solid analysis is a function of minimal funding for research and the consequent inability to get young and bright I economists and policy analysts interested in this highly visible but somewhat arcane subject. Thanks, however, to the financial goodwill of the Andrew W. Mellon Foundation, which remains the primary source of support in this field, and through the sponsorship of the National Bureau of Economic Research (NBER), this volume represents a good first step in restocking the shelves.
The volume consists of three separate though somewhat related parts, each written by different authors. In Part I, Charles Clotfelter, formerly a vice chancellor and now a professor of public policy and economics at Duke University, addresses the tricky issue of the demand for undergraduate education. Ronald Ehrenberg, a distinguished labor economist at Cornell University, examines the current condition and the future prospects for the academic labor supply in Part II. In Part III, Malcolm Getz and John Siegfried, associate provost for information science and technology and professor of economics at Vanderbilt University, respectively, review the highly charged issues of costs and productivity in higher education.
In Part I, Clotfelter addresses one of the most perplexing issues in this field: Why are undergraduate enrollments rising in the face of increasing tuitions and a declining population of eighteen- to twenty-four-year-olds? While conventional theory seems to do a good job of explaining demand trends prior to 1980, it seems to produce less of an answer for what happened in the 1980s. Clotfelter tries several different approaches to get at the answer to this paradox, with mixed results. Perhaps the most intriguing and most disappointing aspect of this section is the Questions for Research, which raise the right questions but leave the reader wanting more answers.
In Part II, Ehrenberg presents a comprehensive model of the academic labor market, including an identification of some of the factors leading to projections of future shortages, including the increase in time-to-degree and the growing percentage of Ph.D.s working outside of academia. Ehrenberg sheds light on a number of issues, including making a good case that relaxing mandatory retirement will do little to prevent shortages from occurring. But his primary focus is on two questions: First, would a shortage of American doctorates really matter, and second, will a shortage actually materialize? In response to the first question, Ehrenberg has a number of provocative answers, including that research productivity and quality will probably not decline nor will the flow of the most talented undergraduates into doctorate programs be stemmed if a shortage does emerge. On the second question, Ehrenberg suggests that adjustments in the academic labor market have already begun that could make previously reported projections of shortages either disappear entirely or mushroom by orders of magnitude. Perhaps the most important message to take from this analysis is that any policy responses to projected shortages should be tailored to the circumstances in specific fields.
In Part III, Getz and Siegfried examine the very visible issues of tuitions and costs in higher education, although their-analyses regrettably seem to focus much more on inputs and expenditures than on outputs and productivity. Their discussion of six arguments as to why costs rise is well done, as is their analysis of costs by twenty-four types of institutions, which provides a clearer picture than I have seen elsewhere of the differences in the causes of cost and tuition escalation in the various sectors of higher education. I do not think their sobering conclusion, however, that even if demand falls in the 1990s the growth in costs will slow only moderately, is justified from their analyses.
Tables and charts-in a presentation different from the usual formats appear throughout the book. The components of demand and the probabilities of completion are two of many useful analysis of the demand for higher education. The comparison of academic and nonacademic salaries, the analysis of the reasons for the lengthening of time-to-degree, and the consideration of how recent trends in the academic market might change are all important contributors to a better understanding of the academic labor market and its future. The breakdown of institutional typologies beyond the normal Carnegie classifications - for example, differentiating between universities with and without medical schools - is extremely helpful in trying to sort out the reasons for the growth of costs over time.
For all of its good points, and there are many, the volume suffers from two principal drawbacks-one beyond the control of the authors and one that is self-inflicted. Beyond their control, the authors labor in the same vineyard as the rest of us and must make do with data sources that are chronically out of date and oftentimes not all that relevant. For example, in many of the analyses used in a book published in 1992, the latest year of data is 1986 or 1987. This is not the fault of the authors or of an exceedingly long publication process but rather occurs because the basic data sources in higher education finance regularly lag reality by three, four, or five years. Thus, much of the activity in the late 1980s, when many public and private colleges and universities were rapidly expanding, or the severe cutbacks experienced by much of higher education in the early 1990s, are not the subjects of analysis in this volume.
The more substantial flaw is the volumes failure to live up to the implicit promise of its title -how to meet the economic challenges that higher education faces. The book is long on analysis but consistently short on the development of policy issues or possible responses. This is perhaps a function of a book that was written as three separate parts, with no one apparently responsible for bringing it all together, but it also seems that the authors were not anxious enough to enter the policy arena and were content to stick to their analyses without providing solutions to what we can all agree are some very intractable problems.
These problems, though, are largely offset by the composed and competent analyses of three fairly complex issues. The authors, to be sure, recognize the gravity of the situation but conclude- I believe, reasonably- that the sky is not falling. To the extent that this effort was initially conceived of by the Mellon Foundation and NBER as an attempt to revive a struggling area of policy and economic analysis, the volume succeeds in laying a good foundation for further efforts designed to bring the quality of the analysis of higher education finance to the visibility the issue typically receives.