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My talk on economics for university administrators
Thank you all for the advice; in my talk I promoted the following ideas:
1. Many mid-level schools do not yet apply rigorous quantitative analysis in reviewing their fundraising techniques; this should change.
2. Norms will shift toward a greater inequality of rewards for lower-level staff. Yet any single administrator who tries to bulldoze through a business-like, highly-incentivized solution does so at his or her peril. The shift of norms will take a long time.
3. Community colleges are in many cases turning out to be stronger competitors than are for-profits.
4. The higher education bubble has burst. The expiration of stimulus funds in 2011 will be a crushing event for many public sector universities.
5. Faculty governance is essential for tenure and curriculum decisions. But faculty governance for setting university priorities is a big mistake.
6. The value of face-to-face classroom time (discussed in Create Your Own Economy, by the way) will prove robust. But the very best teachers of the future will take on an increasing role as editors, collage creators, and DJs. A brilliant scientist who doesn't understand YouTube will be crippled as a teacher. Adjuncts may lead the wave of innovation here.
7. The way to be fiscally responsible is to refuse luxury projects in good times. If bad times have come it is already too late.
8. Current administrators are using stimulus funds to buy off the old interest groups, under the view that these are temporary bad times. Relative to what will come, these are "good times," and much of that surplus ought to be put in reserve funds. That is not happening.
9. Many mid-level schools underinvest in making incremental improvements to their strong, core departments, because nobody gets much credit for that.
10. Being a good university administrator requires the right mix of idealism and cynicism and that is hard to come by.
Posted by Tyler Cowen on June 10, 2009 at 07:29 AM in Education | Permalink
Comments
I'm very curious about item 4. I believe that there is some sort of bubble, but I would like more of a discussion of its nature and causes.
Posted by: CJ at Jun 10, 2009 8:09:44 AM
On 9: does this suggest that mid-level schools are over-investing in new programs and departments?
Posted by: Art Carden at Jun 10, 2009 9:33:46 AM
Quick question - what exactly do you mean when you say "mid-level schools" (items 1 and 9)? Are these the less-heralded public research universities (say, Michigan State or Arizona State), or liberal arts colleges such as Grinnell?
Posted by: Evan at Jun 10, 2009 10:39:55 AM
What about #5? Why should administrators set university priorities and not faculty? Are you saying they should not be part of the process? I believe you are thinking of public institutions, where there are plenty of agency problems that argue for limiting (not excluding) faculty governance. My experience in private institutions (currently at one with no tenure) is quite different. Omitting faculty from the priority setting process is a stupid idea - administrators are too few, with too little job security (below the top) and too little expertise to make these decisions on their own.
Posted by: dale at Jun 10, 2009 10:49:20 AM
Youtube..? ugh. I'm glad I've finished college.
Posted by: Andrew at Jun 10, 2009 11:16:37 AM
Very nice job, Tyler.
Best,
David
Posted by: David R. Henderson at Jun 10, 2009 11:36:07 AM
A good list.
I would add that the most important thing a lower reputation college that wants to rise in the world can have is a high energy president who always has his hand out asking rich people for money and/or getting the college's name in the press.
Posted by: Steve Sailer at Jun 10, 2009 12:20:54 PM
Having graduated and returned after 10 years, about the only thing that has changed was the addition of the Blackboard system that allows teachers to post homework assignments or cancel class at 11 p.m. the night before class. I wonder if the left's idea that insurance companies don't reform themselves extends to universities.
Posted by: Andrew at Jun 10, 2009 1:27:09 PM
But face-to-face time is quite frequently seriously watered down in classes of hundreds of students, or even 60. People are bored, and I think that is because of something that you did not mention--the irrelevance of so many degrees these days. There is growing competition for education outside the system, and this factor alone will save the general institution, but not most of the actual facilities. Each college is going to have to improve and cut down in areas where it sucks (like the philosophy department in most schools). I mean, the bubble has burst for a good reason, I just hope the public schools cut back in the right areas.
Posted by: Aurelia Masterson at Jun 10, 2009 1:32:41 PM
I am also very interested in (4) and (8). You seem to forsee a secular shift in the financial landscape of higher education. Is this just a case of applying "what can't go on, won't go on" to the long-standing rule that the cost of higher education increases faster than inflation, state budgets, and GDP? Or do you have some specific reasons for believing that this is the time?
Posted by: David Wright at Jun 10, 2009 1:36:04 PM
I will echo DH's comments. Interesting insights. I will pass it on to some administrator friends.
Posted by: edwardseco at Jun 10, 2009 4:03:06 PM
Why is there so much focus on the public institutions? The privates are the ones
that are generally way overpriced as of now. The publics do not look nearly so
bad in general in terms of what you get for what you pay.
Posted by: Barkley Rosser at Jun 10, 2009 4:58:31 PM
4. The higher education bubble has burst. The expiration of stimulus funds in 2011 will be a crushing event for many public sector universities.
Hmmm. Why not more trouble for private sector, rather than public sector universities? I would think that would be the case for the same reason that community colleges are proving to be strong competitors -- the value proposition is better.
6. The value of face-to-face classroom time (discussed in Create Your Own Economy, by the way) will prove robust.
But why? Already students would be far better served by a professionally produced series of documentaries streamed over the web at their convenience, than a series of sessions in the back of a 400 seat lecture hall listening to a non-tenure track talking head. Now you might claim that face-to-face time in small classes by high-quality teachers will remain valuable. But very few students get this for more than a fraction of their undergrad instruction. And, as currently structured, this is too expensive for universities to provide for more than a fraction of their undergrad instruction.
Posted by: Slocum at Jun 10, 2009 5:35:43 PM
# 2, the competition from community colleges, and #7, being fiscally responsible by refusing luxury projects, ring true for me. I have many students who take required distribution courses at the CCs during the summer, and i teach an online class for a CC that regularly--even during the regular school year--has students who are at the nearby state U. And #7 is true for colleges for the same reason it's true for the budgets of states: the more you extend yourself when you are doing well, the harder it is to retrench from those commitments.
However I agree with Dale above that #5 is not clearly applicable to liberal arts colleges. When college presidents are short-lived (the shelf-life averages 7 years), there is a risk of two problems with their priority setting. 1) You may get a yo-yo effect, as each successive incoming president shifts priorities away from his predecessor's (a strong Board of Trustees can help here, but most aren't strong), and 2) you may get presidents setting priorities that don't have support from the faculty, making it likely they'll at best be achieved in a half-assed manner.
The same presumably holds true for larger schools, but their larger faculty size will make it harder to involve the faculty in priority-setting in a meaningful way. It's much easier to coordinate the goals of a faculty of 100 than the goals of a faculty of 500.
Posted by: James Hanley at Jun 10, 2009 11:02:21 PM
Slocum - the advantage of big lectures is that they happen at a specific time of day. The disadvantage of videos streamed over the web is that they can be watched at your convenience, and in my case if any hard thinking is involved (eg learning maths) normally I find it convenient to watch something one hour later. The only exception is late at night when it's convenient to watch the video the next morning.
External structure is useful.
Posted by: Tracy W at Jun 11, 2009 6:16:50 AM
Slocum - the advantage of big lectures is that they happen at a specific time of day.
If that's a key feature, it would be easy to reproduce by making the video stream available only once at a certain time.
But I think we should expect a significant overlap between those students who would be inclined to procrastinate in watching video lessons and those already inclined to skip 9 am lectures (Or sleep in the back. Or daydream. Or text their friends).
And keep in mind that skipping lectures can be completely rational -- for big lecture courses, the class meeting is more a ritual to be maintained than a time-efficient way for a student to learn the bog-standard material.
Posted by: Slocum at Jun 11, 2009 7:44:30 AM
Point #1..Amazing, given the fall off in public funding for HE, that more emphasis analyzing effectiveness of fund raising techniques and fund raising officers hasn't occurred. Appropiate models from the private sector exist. Certainly the technology is available. In my experience, senior management lacks ability, skill, nerve, so measurement, corrective action seldom happen.
Posted by: jimmy at Jun 11, 2009 12:45:47 PM
Great post! With a number of them, you seem to have hit the nail on the head. With others, your points just need further clarification. My reaction:
1. Not just mid-level colleges...all privates should employ rigorous quantitative analysis for fundraising. But of course, that's what most faculty say.
2. You are correct: trying to change the salary structure and process for faculty is a mortal risk for any administrator.
5. I agree about faculty owning curriculum, and administration setting the strategic plan (if that's what you mean by "priorities"), but that plan and its targets and goals should have legitimate input from the faculty (that's "input" not "control").
6. I'm not drinking the Koolaid regarding the end of the classroom experience in higher education. The articles written regarding this subject are heavily focused on large research universities. Also, these viewpoints don't take into consideration the desire for "community," which is a key component of the college experience. Technology and general consumer behavior will change the paradigm, but I'm not ready to agree to all that's been said. Of course, Gen Y say that they could learn it themselves, and that much of their classroom experience is a waste of time. That's their M.O. Actually, half of that has been said by every generation. Where's the goal of critical thinking in this discussion?
7. This one is definitely tied to the educational bubble bursting. Many colleges are in tough positions now because of these projects.
10. Very true.
Posted by: Rick Hardy at Jun 12, 2009 3:22:48 AM
#4: I certainly hope the university bubble has burst. Tuition increases have outpaced inflation for how many decades now? And my alma mater (a large, renowned state school) jacked up tuition 13% in 2001 (during a recession) and again in 2002 (in the 9/11 aftermath), then had the gumption to blame too-small state funding increases.
#7: University administrators really screwed the pooch on this one. Ideally, they'd raise millions for the general fund and spend according to priorities. But their spending has been historically so low-priority -- or so offensive to alumni and the public -- that virtually all donations are now targeted (translated: contractual obligations).
Posted by: Your Majesty at Jun 12, 2009 7:57:04 PM
As university administrators proliferate (more assistants to deans, more deans, etc) the ability of tenured faculty (who by their tenure are de facto residual claimants to the success of the institution) to prevail over areas key to the survival of their institutions declines. Replacing departmental administrative automomy with ever greater centralized administration reminds me of the usurpation of state power by federal government in the USA: generally making education and the nation (respectively) poorer as contrived orders replace emergent ones.
Posted by: indiana jim at Jun 13, 2009 10:45:12 PM
