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How do the benefits of higher education compare with its costs, and how does this comparison vary across individuals and institutions? These questions are fundamental to quantifying the productivity of the education sector. The studies in Productivity in Higher Education use rich and novel administrative data, modern econometric methods, and careful institutional analysis to explore productivity issues. The authors examine the returns to undergraduate education, differences in costs by major, the productivity of for-profit schools, the productivity of various types of faculty and of outcomes, the effects of online education on the higher education market, and the ways in which the productivity of different institutions responds to market forces. The analyses recognize five key challenges to assessing productivity in higher education: the potential for multiple student outcomes in terms of skills, earnings, invention, and employment; the fact that colleges and universities are “multiproduct” firms that conduct varied activities across many domains; the fact that students select which school to attend based in part on their aptitude; the difficulty of attributing outcomes to individual institutions when students attend more than one; and the possibility that some of the benefits of higher education may arise from the system as a whole rather than from a single institution. The findings and the approaches illustrated can facilitate decision-making processes in higher education.
The Condition of Education 2021 summarizes important developments and trends in education using the latest available data. The report presents numerous indicators on the status and condition of education. The indicators represent a consensus of professional judgment on the most significant national measures of the condition and progress of education for which accurate data are available. The Condition of Education includes an "At a Glance" section, which allows readers to quickly make comparisons across indicators, and a "Highlights" section, which captures key findings from each indicator. In addition, The Condition of Education contains a Reader's Guide, a Glossary, and a Guide to Sources that provide additional background information. Each indicator provides links to the source data tables used to produce the analyses.
The focus of this essay is on the persistently rising costs in higher education and the role that incentives play in pushing those costs up. Data from the Department of Education's National Center for Education Statistics reveal that the rise in higher education cost exceeds the rise in service-sector prices and even the rise in health-care costs (Martin 2005, National Center for Public Policy and Higher Education 2008). Some people argue that as long as students and their parents are willing to pay tuition, it can't be "too high." That may be true for some students, yet the inability to control costs imperils access to college by many low- and middle-income students, and the author addresses the general point in this essay. With this essay, the author lifts the lid on the black box and explores the network of incentives that lead to the chronic cost-control problem. He explores how characteristics of higher education, including its nonprofit legal status, manner of governance, competing objectives, and principal/agent issues all lead to a chronic tendency for both costs and revenues to rise. This essay reveals a perverse irony that is usually neglected in the literature: Higher revenues induce higher costs, and those higher costs are used to justify future calls for more revenue. The author calls this process the revenue-to-cost spiral. (Contains 24 notes.).
College tuition has risen more rapidly than the overall inflation rate for much of the past century. To explain rising college cost, the authors place the higher education industry firmly within the larger economic history of the United States.
The underlying theory of cost-sharing as well as the description of its worldwide reach were developed from 1986 through 2006 mainly by the works of Johnstone and his Ford Foundation financed International Higher Education Finance and Accessibility Project at the State University of New York at Buffalo. The principal papers from this project are reproduced in this volume. They examine the worldwide shift in the burden of higher education costs from governments and taxpayers to parents and students, and the policies of grants, loans and other governmental interventions designed to maintain higher educational accessibility in the face of this shift.