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Friday, October 23, 2009

The Economics of Education: Average Cost

I am splitting the next series of posts into three separate posts to try to separate out some ideas on the economics of education. Thomas Sowell, a well known economist and author, in his writings is addressing College and University education. But I believe that some of the concepts contained herein are also relevant to Yeshiva Education, albeit in a less direct way perhaps. I believe this is the case most particularly in Yeshivot that host numerous functions (kollelim, post-high school Beit Midrash, high schools, adult education for the community at large and/or Beit Midrash/kollel grads, and dorming).

I am highlighting some key economic points that I do believe are extremely important and relevant and I hope this post and additional posts will bring some clarity. They certainly have help me clarity many ideas I have worked with on my blog, which is why I want to get them out of paper.

Read on:

. . . .when parents are being asked to borrow against the equity in their homes to pay rising tuition, it is not simply to cover the increased cost of educating their children, but also to help underwrite the many new boondoggles thought up by faculty and administrators, operating with little sense of financial constraints. As an official of the U.S. Department of Education put it, many college "choose to increase tuition because they can get away with it." While college claim that the increased spending is to improve education, this official saw it as going into "the swelling of the ranks of vice presidents and deans" and to other costly endeavors which make little or no contribution to the quality education, which is "not a function of money." The availability of federal grants and loans to help students meet rising tuition costs virtually ensures that those costs will rise. . . . . .

Arguments have often been made that students are getting a good deal from college, because tuition does not cover the full costs of their education. Such statements are much more difficult to check than they might seem to be. First of all, education is not the only activity going on at research universities, and even at liberal arts colleges, research is increasingly expected of the professors. This research is paid for not only by faculty grants but also by reduced teaching loads--which is to say, by hiring far more professors than were required before to teach the same number of courses. These additional costs may be carried on the books as instructional costs, but they are in fact research costs. Almost anything can be treated as a cost of education students -- on paper. At the University of Texas, for example, more than $11 million of student fee payments were applied to paying for construction of a microelectronics research facility, located more than 6 miles away from the campus.

The research imperative has spread across all kinds of institutions and down the academic pecking order. Virtually everywhere, the education of undergraduates is a joint product, along with research and other activities. As any economist knows, there is no such thing as an average cost of producing a joint product -- that is, there is no such thing as the average cost of producing pig skin, because it is produced jointly with bacon, ham, and pork chops. There is an average cost of producing a pig, but not its components, which cannot be produced separately.

Even if it were possible to separate out the cost of undergraduate education, there is no reason why tuition should cover it, since alumni and other donors contribute money for the express purpose of subsidizing education. Endowment funds often were contributed for the same purpose. When college and university administrators expand their empires by raising tuition, this is not necessarily an enhancement of education, nor something reflecting student demand through the marketplace. In the public institutions, where most students go, it is largely a matter of administrators' convincing legislators to contribute the taxpayers' money.

To be continued. . . . ..

36 comments:

Anonymous said...

I look forward to the additional installments. I've often had the same thoughts about university/college education. While a lot of terrific research goes on that benefits society as a whole (particularly at med schools and engineering schools like MIT), why should it be funded by tuitions. Certainly some of the research being done is intimately related to and part of the education and training that is going on, but much of it is not. As a society, we have developed some odd linkages, like linking health insurance to employment.

ProfK said...

A university/college education is not just about subject matter but about who teaches that subject matter. Top flight universities can attract top flight instructors, those with cachet in their fields, because they offer them not only teaching opportunities but also opportunities to do research in a variety of research facilities and Institutes studying societal problems. Students benefit from interacting directly with these top-of-their-field instructors, as well as from the research findings they produce. Yes, tuition is higher in these schools and it covers the cost of what it takes to attract and keep these instructors. It's not a question of subsidizing non-educational outlay but of spending what it takes to be and remain at the top. For a tier one school that is part of the education.

The correlation is that these schools also attract the top students in the country, those who will, themselves, go on to be outstanding in their fields.

Many of those who donate to universities do so not to cover tuition but to allow the university to continue to draw the best and brightest to it, and faculty, and faculty resarch, is part of that.

Anonymous said...

Good points ProfK. Also, the ivies and other top schools that spend the most on faculty research and have the highest paid faculty continue to have dozens of stellar applicants for every freshman slot. As long as supply and demand do not change (and indeed the demand has only been increasing in recent years), its hard to imagine much of a change.

Jeffrey said...

The common University blabber that tuition only covers Y% of the real cost of an education is a meaningless, slanted statement. If a college professor just has to teach 1-2 courses per term and spends the rest of the time doing who knows what, and then you overpay the professor, of course, tuition isn’t going to cover all costs. The colleges have created a slanted situation of enormous fixed overhead that is difficult, if not impossible to remedy. Perhaps you’ll tell me that professors do important research. True enough, I grant you, for a small minority of them doing research in biology, chemistry, economics, etc. You’re going to have a hard time convincing me that its worth paying a professor $100,000+ to teach one course in Shakespeare and spend time doing research on Shakespeare. However, to the extent we feel as a society that research is important, why should college students (or their parents) subsidize it? The money should come directly from the federal/state governments. The costs of college continue to skyrocket because of the availability of student loans. If all of a sudden student loans were to disappear, tuitions would come crashing down.

I’m not saying that a Harvard education isn’t worth the costs; it very well could be. However, I think the greater benefits come in the form of prestige and connections than in actual education. I don’t think the average student at Harvard who sits in a lecture hall with 200 other students and then has a lab with some graduate assistant is really getting much for their dollar’s worth in terms of education, but the connections and recruiting might be worth the money.

SephardiLady said...

First Anon-I think the further items will be of even more interest. But, we have to start with first things first to keep the lesson in context.

The most applicable parts to Yeshiva education I have highlighted:

1. "The availability of federal grants and loans to help students meet rising tuition costs virtually ensures that those costs will rise"

Let's replace a few words: "The availability of grandparental money and home equity and other credit to help [parents] meet rising [Yeshiva] tuition costs virtually ensures that those costs will rise."

At this point, there is limited home equity, but borrowing has been enshrined as the way parents can pay for a yeshiva education. And much of the education is financed and costs have risen to reflect such.

2. "Arguments have often been made that students are getting a good deal from college, because tuition does not cover the full costs of their education."

I have heard this argument in reference to yeshiva education. There are those who claim that FULL tuition doesn't cover the entire budget. At the elementary level, costs are far more direct, unless there are side functions. In Yeshiva Gedolah high schools, there are often multiple functions from the actual mesivta, to the dorm, to the kollel. Does having a kollel (research arm) benefit the high schoolers? Perhaps. But, does every function a school undertake something that every parent must support (and be guilted if they feel squeezed by tuition)? If there is a joint product, there is no need for each and every parent to support each and every function. The same goes where there is fundraising specifically to support a school or profit making functions within the school that underwrite a part of the budget.

3. raising tuition [does not reflect] student demand through the marketplace

True! Our Yeshivot continue to rise in price, but I haven't seen demand rise. Just wait to see Thomas Sowell's comments on how a schools create monopolies and it might become far more clear why there aren't flat rate schools popping up (a plan that is in place, but is not off the ground in New Jersey).

Miami Al said...

People go to a research university for the cachet of being selected there. I had professors that were world class in their field... they weren't the best instructors. Nonetheless, the outside world values my degree, so we pony it up.

In the university world, plenty of non-research commuter schools exist, offering a non-premium degree at a discounted cost, where professors are paid less and are full time instructors. At research universities, 4 courses/year is always full time, 2 courses/year may be for tenured faculty, so we're "overpaying in that regard."

Knowing someone that processed Federal research grants, the university (a top tier but not top 10 research university) had a 63% overhead rate. Meaning, if a grant for $100k for research came in, the university took 63k for its general operating budget, and 37k went into the research account under the control of the professor.

Research is a profitable endeavor, even if shady accounting is part of making it so.

University tuitions increase because of subsidized loans and scholarship funds pay in, so the universities raise the tuition to suck that money out. In the Yeshiva world, the scholarships aren't funded, so some people just get a free ride.

ProfK said...

Sorry if this is going to go slightly off topic, but as a tenured, full-time professor I feel the need to straighten out some "mis-statements" as seen above.

First, full-time tenured and full-time faculty both have a 4-course requirement. Where deemed necessary some of these instructors, both full-time and full-time tenured, may be given release time for various activities in the university, research and otherwise. The chairs of departments get release time and don't teach a full 4-course load because of their extra administrative duties. Ditto for those who head up specialized programs within a department or the school in general, such as directing/supervising/coordinating the basic writing programs or math labs etc. Research is only one of the ways that release time may be given.

Getting release time is not a given, however. Departments are limited in the number of professors who may be given release time during the same school semester. None of the top research universities have all the faculty from a particular department teaching only two courses every term.

200 student lecture courses are the exception, not the rule, at Harvard and elsewhere. They generally are for introductory survey-type courses, and are not the model at every university. They certainly are not the model as students progress through the more advanced courses.

"Perhaps you’ll tell me that professors do important research. True enough, I grant you, for a small minority of them doing research in biology, chemistry, economics, etc. You’re going to have a hard time convincing me that its worth paying a professor $100,000+ to teach one course in Shakespeare and spend time doing research on Shakespeare." First, only a small number of professors are doing research altogether. Even at those universities known as centers of research all of the professors are not doing research at the same time. Research is hardly limited to the areas mentioned, and yes in virtually every area where a professor is doing research, something of value to the greater society and to the subject area is the result. When an education professor spends time doing studies and researching into educational disabilities, and pinpoints the underlying causes of said disabilities and how to approach treating them, his/her time is of just as much value as that of the biologist. When a professor of speech pathology develops a better method of treatment, that is also of equal value. When a professor of horticulture develops a disease resistant strain of rice, one that will be of value in feeding the world's people, whatever you paid him/her is not enough. English is my field and I can tell you this--no professor has yet to be given only one class as a teaching load because he/she is researching Shakespeare. But speaking of Shakespeare, a professor of English, researching an anomaly in one of Shakespeare's historical plays, happened to come across some original documents that were written in Latin.(Latin is a requirement for attaining the PhD in English.) In translating them, he discovered that a few of the underpinning documents for some judicial systems, the British system among them, had mistranslated, whether through error or deliberately, these documents. His discovery caused one hell of a furor and some necessary tweaking of certain judicial standards.

Unfortunately, most of the "common University blabber" that we hear is coming from those outside of the University system, with an imperfect understanding of what universities are, how they function, what their multiple purposes are, and the multiple methodologies in place to carry out the multi-fold mission of a university.

Are universities perfect? No, they are not, not even the best of them. But to be demanding that they dismantle the structures that are fundamental to making them what they are is absurd. If you want to discuss bloat in structure, take on Enron et al. Or take on government structure, a prime example of people being paid highly and producing almost nothing of value.

Miami Al said...

ProfK, far be it from me for challenging the Academy of private entities, I believe that they serve a useful purpose, and even if not, they were endowed with funds and answer to those managing the funds, not us.

The commuter college serves a valuable purpose, providing the opportunity for economy advancement that higher education offers, even if as a more practical and less theoretical level.

I question the need for state funded research universities that are not careful stewards of the public money, both in tuition dollars and taxpayer dollars.

It is critical when looking at public institutions that the funds are being properly used. The Public Universities are essentially government structures, and therefore the bloat there is a public concern. Further, I would suggest that a more narrow definition of undergraduate education and associated costs would help prevent the Administrators from pilfering dollars and spending it on what they want.

Professor Philip Greenspun wrote a nice scathing blog entry on women in science that touches upon some of the silliness in the university world.

The University is a valuable institution, the top of which are well funded by wealthy alumni that support that mission. I have concerns about the public system that in someways seems like a farm league, where professors get a second crack at the apple if their post-doc research doesn't land them a top tier post, but if they turn out great research "later in their career" (some of them even over 35! smirk), they quickly move to a private university.

Even stellar public universities function that way. The UC Berkeley computer science department was home to tremendous research in applied computer science, but the faculty there, cultivated with state funds when the "East Coast Establishment" schools weren't funding it found their successes later at Stanford or MIT, similar events happened at University of Michigan.

The University system is CRITICAL to our economic well being. However, the nuances of non-profit and fund accounting has definitely created a system where the self growing beasts absorb more and more resources for the same product (the undergraduate education for which the public has chosen to help fund) which are allocated towards endeavors that the University Administration ACTUALLY cares about... fancy new buildings built by famous architects. :)

Shakespearean research no doubt provides a lot of internally important work (though an example of an impact beyond the "tweaking of certain judicial standards" might help there), the question is should that be funded to the ability of wealthy benefactors endowing chairs, or should some portion of the tuition dollars that the parents of an 18-22 scrape together be used to support that research.

Few quibble with the research on it's own, they question the interaction with undergraduate education, which is funded by savings and Federal subsidies. Sending one child to a selective school costs about as much as the median home price in more markets.

Jeffrey said...

Allow me to give a real life example of what I wrote about earlier. Look at Columbia’s web page for the Dept. of English & Comp. Lit. (http://www.columbia.edu/cu/english/index.html). I counted 47 professors (not including adjuncts or lecturers). Of those 47, 10 are “On Leave” for the entire academic year, and nine are on leave for one semester. For pete’s sake more than 20% of the faculty is not even teaching one single course! Look further and you'll see that there are only about 40 something undergraduate courses being offered this term. So the professors who actually are working aren't working all that much. Granted, this probably won’t occur at smaller schools or teaching schools, but what kind of organization has 20% of its employees off the entire year and an additional 20% off for half the year. It’s totally outrageous that parents are paying $50,000 per year so that these professors can do whatever they are doing! Granted, at smaller schools and teaching colleges you’ll probably teach 3-4 classes per term. But even that’s hardly overdoing it and you get your summers off, winter vacation, spring vacation, etc. And don’t forget tenure (which is a whole separate topic).

If society feels that the research that occurs on a college campus is worthwhile, let society pay for it, not the parents of the students. Let Harvard or Stanford charge what they like students will still line up to pay. But I think that’s much more of a reflection on the perceived social and economic value of those degrees as opposed to the quality of the education. And as long as there’s perceived value in those degrees, Harvard and Stanford can keep raising prices and all of the other schools will follow.

Offwinger said...

I agree with everything Prof K has said.

I want to add two other points to the discussion regarding the connection between research and quality of education.

First, when a faculty member does research, the gains of the labor are often shared in the classroom too. That is, a professor who is actively engaged and learning about the subject in greater depth is thinking about it more and in a different kind of way than someone who simply teaches. It's a generalization to say that this always happens, but a research-engaged professor brings more to the table to offer the students than one who is not doing any research, all other things being equal (e.g., skill and commitment to pedagogically sound teaching).

Second, students at universities have opportunities to engage in the same research, alongside their professors. The ability to work in labs or be research assistants are significant experience and knowledge building opportunities within higher education.

SephardiLady said...

I don't see Dr. Sowell questioning the value of research (he is a researcher). He is looking at the relationship between tuition and the market and he is looking at the claim that "students are getting a good deal."

His claims:
*Tuition isn't market driven (it is inflated, especially by the availability of student loans, scholarships, etc).
*Tuition doesn't need to cover the entire cost of the operation.

Post 2 will go deeper into the subject matter. Post 3 will look at how schools create monopolies (extremely relevant to yeshivot imo).

tesyaa said...

Thomas Sowell is a scarily right wing author, so it's no surprise that he appeals to the frum world. His book "The Einstein Syndrome" is so far off the mark that I'm very skeptical about everything he has to say. Granted, that book is not primarily about economics, but his right wing views lead him to very dubious conclusions that are supported by anecdotal evidence only.

ProfK said...

Jeffrey,
Sorry, but you are misreading the Columbia information. Ten professors are on leave for both fall and spring terms, so they won't be teaching any courses. 6 professors are on leave in the fall term but will be teaching in the spring. 3 are on leave in the spring term but won't be teaching in the fall.

Columbia also runs a number of programs in English outside of the Columbia/Barnard/Grad school loop, and there is no way to tell how many of the English Department staff are involved in teaching/supervising there.

"On leave" can mean any number of things. Some leaves are paid and some are unpaid. Some are for sabbaticals, either two term or single term, during which time professors are expected to be running studies or doing research for the "betterment" of their field. Some leaves have professors serving as "visiting professors" at other universities. Their salaries are picked up by the second university, not their home university. Some leaves may be covered by short/long term disability as they may be for medical reasons.

Re the courses, what you saw is only for Columbia College. Barnard has additional courses, taught by these faculty members. In addition, many of these faculty teach in the various graduate programs. Some, as seen in their biobliographic info, are clearly getting releaase time for administrative work. A few are Journal editors and are getting release time. Yes, universities value having Journals which are tops in their fields.

tesyaa said...

ProfK, Barnard has its own, separate faculty. Courses listed in the Barnard catalogue are NOT taught by Columbia College faculty.

Offwinger said...

Columbia also may have visiting professors that they are not listing too.

If a professor at Columbia visits at Yale and a professor at Yale visits at Columbia, each will be "on leave" from her home institution. Not every college updates its websites to include all visitors, though.

You can't make judgments about the access that students have to full-time faculty or equivalent visiting professors simply by looking at a website.

ProfK said...

Tesyaa,
Double checked and you are mostly right--a couple of the Columbia professors also teach Barnard courses. In checking though I found some different info that is applicable to the "tution paying the cost of research" discussion. Many of the Columbia professors are in endowed chairs. That is, someone has paid big money to have a specific teaching/research position, or "chair" named for someone. Professors holding those chairs have their expenses or most of them paid for out of the specific endownment rather than from general university funds. Therefore, how many courses they teach seems to be irrelevant as they aren't a drain on the general funds.

Anonymous said...

Is there a corresponding issue in the jewish school system? Are there rabbis and others on the full-time payroll of schools who are teaching a light load with their salaries subsidizing writing, study or other non-teaching activities?

ProfK said...

Anonymous,
It would seem so. You have, in some of the larger schools, rabbeim who serve as coordinators for grades 1-3 limudei kodesh, grades 4-5, grades 6-8. They aren't teaching full loads. I'd hazzard a guess that they are making full salaries though. Otherwise, what would be the incentive to take on the work?

Orthonomics said...

Anonymous-I do think they are parallels, although not as strong as the parallels in colleges and Universities.

The parallel I brought was in schools that offer multiple tracks from mesitva to kollel. I don't see a need for tuition for high school students to cover the cost of the kollel.

I would also agree with ProfK's "It would seem so" statement. I know that there are schools where the principals teach in the classroom half day. I believe it was discussed here and many in educate justified the practice. From a financial standpoint, I don't see it as efficient.

Give me about an hour and I will post up part II.

Mike S. said...

Jeffrey,

1) Professors on leave are only occasionally being paid by their institution. More often they are paid by whoever they are "visiting." Typically a professor is eligible for a paid sabbatical about once in 10 years, and they are competitive, so you actually get one far less often.

2) There can be nothing unfair about prices in a competitive market, which the US has in spades at the college level. Anyone who doesn't think it worthwhile to support Ivy league faculty has any number of less expensive options, both private and state subsidized. Of course degrees from many of these less expensive institutions are less valued by employers, but what you get depends on what you are paying for.

Sowells point is not that tuitions aren't market driven, but that they are set by what people are willing to pay. Thus, he argues, government financial aid to the middle class does not make college more affordable, but just lets schools raise tuition.

Anonymous said...

I'm a tenured professor at a major research university. I view my job as doing research. It would cost the university about 25% of my salary to pay someone to do all of my teaching.

On the one hand, I think that I eran my salary. My research provides benefits for society at large, and my research activities benefit my students (as described by another commenter).

However, for all my arrogance as a university professor, I can't believe that being research active makes my lectures worth 4 times as much to my students than if they were taught by an adjunct.

As mentioned by a few of the comments above, it's an odd industry that bundles teaching and research together and expects the consumers of teaching to pay for the research.

Offwinger said...

Anon -

I appreciate your comments and honesty. I know how good I have it, and that the hardest part of the academic world is getting in. Seriously, I was only somewhat joking when I've called my own gig "a racket."

I would agree with your comment that there is nothing about my research or my research-activities that makes me "worth" 4 times as much as an adjunct. Then again, there is nothing that makes me "worth" more than a fire fighter or police officer, yet that's not how labor markets work.

I think that some of the same characteristics that make me inclined to engage in research & want to be a tenured professor ALSO make me a better professor for my students than the vast majority of the adjuncts that are hired (and I've done the "peer review" of adjuncts enough to see the mix of talent/knowledge base we get, combined with pedagogical skill).

I'm not teaching because I've failed in the market place of companies or firms (I could make a lot more money doing something else). I'm not teaching because I want my summers off (A research grant is not a vacation). I'm not teaching because I want the prestige to tell people I work at a major university (in fact, I'm usually pretty sheepish in person about what I do).

The reason adjuncts get paid far less than university professors is simply due to labor markets. Those of us working in professional school university settings (medicine, law, business, etc.) are choosing to make less in academia that we would in the for-profit world. Our salaries have to provide enough at least to attract us in the first place. The reason we pay adjuncts so much less is that we can and still have an overabundant supply of adjuncts - of varied quality - interested in the job.

The other issue "missing" here in the discussion are the service and administrative requirements on ordinary faculty. This may be different depending on the field you're in, but besides teaching and research, I spend plenty of time serving on committees that help the entire system function. While some is scholarship oriented (journal reviewer, workshop coordinator, etc.), most of my service happens to be quite student-oriented. Yes, there are tenured faculty who shirk in this area in every school. But a lot of us ARE doing these things, while adjuncts are not, and the students really do benefit from it.

I don't expect consumers of teaching to pay for research, and I actually agree with the underlying sentiment that government subsidies are being pocketed by universities instead of making education more affordable. I just get frustrated when I see many people outside the system fail to recognize how those of us working inside it are benefitting students, even when we're not in a classroom.

Anonymous said...

Does anyone know if the American system is unique - how are universities and other institutions of higher education funded in other countries? Do professors there focus on teaching or do they get to devote large portions of there time to research? If so, do tuitions help pay for that research? Have tuitions escalated as much as they have in the u.s.?

Dave said...

A few years back, when I was making a career change, I considered Academia.

Then I realized that my income would drop by two-thirds.

Charlie Hall said...

Sowell *is* an economist, but with a very libertarian spin. Many of his ideas are not mainstream. (I have more than my own share of non-mainstream ideas, but I admit that upfront.) And note that he is *not* in academia but at a think tank.


"You’re going to have a hard time convincing me that its worth paying a professor $100,000+ to teach one course in Shakespeare and spend time doing research on Shakespeare."

In most universities there is only student demand for one course in Shakespeare. And Shakespeare professors don't make anything close to $100K at most institutions.

The idea of the research university is that the prof who has spent his entire career studing Shakespeare will be better able to inspire students than the prof whose knowledge came from his *own* Shakespeare course as an undergrad and did his dissertation on, say, George Bernard Shaw. How well this works is debatable.



"the university (a top tier but not top 10 research university) had a 63% overhead rate. Meaning, if a grant for $100k for research came in, the university took 63k for its general operating budget, and 37k went into the research account under the control of the professor."

Your understanding is incorrect. If a grant for $100K in research came in, the government would pay an *additional* $63K for indirect costs. Those indirect costs are real -- the cost of paying for the building, electricity, telephones, general administrative staff, etc.


"professors are paid less "

Academic salaries are now so low in comparison to what bright young people can make in other fields that there is now a tremendous shortage of Americans wanting to pursue graduate education, especially in science and engineering.


"When an education professor spends time doing studies and researching into educational disabilities, and pinpoints the underlying causes of said disabilities and how to approach treating them, his/her time is of just as much value as that of the biologist. When a professor of speech pathology develops a better method of treatment, that is also of equal value. When a professor of horticulture develops a disease resistant strain of rice, one that will be of value in feeding the world's people, whatever you paid him/her is not enough. "

Well said.

I am required to spend at least 75% of my time on research, supported by outside research grants. I've made several important contributions. The most important one probably is that I was the first person to discover that a particular headache drug was effective at treating mild headache pain, and not just moderate to severe pain. My other major contribution was to suggest a particular way to analyzed longitudinal studies of aging that lends to better interpretability. I'm now working with a colleague to show that it is possible to control for the effects of missing data in longitudinal prospective studies by using auxiliary information. None of this will get me a Nobel Prize, but it has made my career worthwhile.

Charlie Hall said...

'Unfortunately, most of the "common University blabber" that we hear is coming from those outside of the University system'

And Sowell is one of those outside of the University system, with a comfortable position in a think tank. He may have no direct idea of how university administrators have to deal with the vagarities of student enrollment, government budget cuts in mid-semester, redirection of research priorities by sponsoring agencies, dramatic declines in endowment funds thanks to the stock market crash, etc.

And normal business models don't work for education: The way to satisfy all customers is to give all students little work and high grades.


"Professor Philip Greenspun wrote a nice scathing blog entry on women in science that touches upon some of the silliness in the university world."

Unfortunately it is the nihilistic criticism of people like Dr. Sowell that keeps that silliness from being changed. His suggestions would result in fewer of the best and brightest choosing academic careers.


"The UC Berkeley computer science department was home to tremendous research in applied computer science, but the faculty there, cultivated with state funds when the "East Coast Establishment" schools weren't funding it found their successes later at Stanford or MIT, similar events happened at University of Michigan."

The UC Berkeley statistics department was once the best statistics department in the world. Then the California legislature required faculty to sign a loyalty oath. That is how Stanford became the best statistics department in the world -- the best faculty fled across the bay. I can offer similar stories of outside interference destroying academic programs.


"students at universities have opportunities to engage in the same research, alongside their professors. The ability to work in labs or be research assistants are significant experience and knowledge building opportunities within higher education."

Well said. Unfortunately, at many institutions students aren't much interested in those kinds of opportunites. In my three years teaching undergrads at a big state university, exactly one undergraduate sought me out to work on a research project with me.


"Thomas Sowell is a scarily right wing author, so it's no surprise that he appeals to the frum world."

It should be a surprise: Sowell is basically a libertarian and that view is quite contrary to the Torah ideal.


"There can be nothing unfair about prices in a competitive market"

Halachah doesn't agree; otherwise they would not have banned price gouging or undercutting.


" I can't believe that being research active makes my lectures worth 4 times as much to my students than if they were taught by an adjunct."

Not to blow my own horn too much, but I actually think mine does. I've had students express appreciation for my ability to explain reseach findings in a way that is understandable, even when the research methodology is quite complicated.


"I could make a lot more money doing something else"

So could I.


"how are universities and other institutions of higher education funded in other countries"

In most developed countries it is the government that pays all the bills. Canada, for example, has no real private universities. Oxford and Cambridge are public universities. Tuition is vastly less than in the US.

The tradeoff is that in most other countries it is much harder to get into university as there are fewer slots relative to the population size.

Offwinger said...

Charlie -

I agree with you on just about everything (no shock), except I disagree with your characterization of halacha - taken as its own functioning legal system - as "anti-libertarian."

I'm not sure if that's because we disagree on the underlying halachot that should be considered (e.g., does heter iska count? are we looking at antitrust in choshen mishpat or the way some Vaad in the USA interprets it, etc.) or if we disagree on what it means to be libertarian (strong - no government intervention at all, which no one really believes when pressed, vs. weaker - government intervention only when you can show externalities/harms to third parties or that the people involved want gov't as a superior option to market, but lots of disagreement about when that might be). Then again, it might just be the difference between looking at what the halachic view should be of a foreign legal system (e.g., US law) versus halacha if it were the only system that applied.

Wow. Sorry to take this discussion extremely off-topic. I've lectured on halachic conceptions of property rights before, but I think "What are the Torah's economic values and are they properly represented in halacha and/or the US" would be a great subject here for a series of posts. It's tangential to the initial post and I know SL has posted on this to some extent, but this seems to come up as an underlying issue very often. I think some of our disagreements may stem in the pluralistic nature of how to view the Torah's general economic blueprint.

Anonymous said...

Offwinger - I'm not teaching because I've failed in the market place of companies or firms (I could make a lot more money doing something else).

"I could make a lot more money doing something else"

I've heard this statement from almost every single educator with whom I've discussed this issue (and the related issue of being underpaid). Over the years I've realized how blessed we are as a nation, perhaps even as a world, to have such dedicated educators that don't let remuneration sway their career choice (and continued career choice). It's a rare person that makes a choice to earn less when they could easily earn more. Maybe that is, in fact, how teachers are selected (self-selected) by selflessness and a strong sense of improving the world even at ones own expense.

And I have to wonder if that might be the reason that, by and large, educators populate the left side of the political spectrum.

Mark

Miami Al said...

Mark,
I've also heard this argument, and quite frankly, it's garbage. It's like those that cite market stats and claim to be underpaid. If you think that you should make more money, or could make more money, elsewhere, go forward and do it. The professors, while less paid than jobs that they think they could get, are paid a handsome salary with benefits untouched elsewhere in the business world.
Some professors could no doubt enter the job market and make more money, but it's much easier to SAY that you "can make more money" and use that to justify anything than it is to go out and do it.
Tenured professors are well paid with tremendous job security that allows them to keep earning their salary into their 70s, take liberal vacations IF THEY WANT, sabbaticals, leaves, etc. The leave might not be paid, but how many people at age 58 would be able to take a year off "leave" and come back job in tact? Most high earners in their 50s are terrified that if they lose their job, they'll take a 40%-60% pay cut, while the professors can do that routinely.
Think it might be fun to live in another city for 6 months to a year, that option isn't readily available to workers over 25, but visiting professors have that luxury whenever they want.
The market compensation for Professors is quite fair or there wouldn't be 100 applications for each opening.
We have some good educators and some bad ones, just like we have good mechanics and bad ones. Professors interested in working really hard take lucrative consulting work using their employer's name, an option NOT available to highly paid private sector employees who often have contractual limitations on outside work.
An MIT Professor that takes a 6 figure consulting gig because they are looking for more money and are willing to work an extra 20 hours/week for a year doesn't have to share that consulting contract with the Institute despite trading on MIT's reputation to get the job... how many law partners have that luxury?
The Academy is not the best paying route for highly educated individuals, but it is reasonably compensated with tremendous flexibility and protection.

Charlie Hall said...

"It's a rare person that makes a choice to earn less when they could easily earn more. "

I don't know that I'm that rare. I do value things other than financial compensation, though. (That does cause some problems for microeconomic theory, though.)


"The market compensation for Professors is quite fair or there wouldn't be 100 applications for each opening."

What 100 applications? We get about a dozen -- and they have each applied to over a dozen other positions!


"an option NOT available to highly paid private sector employees who often have contractual limitations on outside work"

Some universities have limitations, too. (Mine does not.)

Charlie Hall said...

Offwinger,

I don't know that your comment was completely off-topic. But I don't see how you can see Torah as consistent with libertarian philosophy. Leket, peah, shich'chah, and maaser oni are considered so important that they were specifically singled out by Chazal to be taught to all prospective converts. Communal authorities have the power to declare your property ownerless (without compensation!), to assess taxes for education and public works, and to grant monopoly rights to merchants. If you have a home in Jerusalem you are required to put up visitors for the festivals. Overcharging and undercharging are asur. And there is no such thing as freehold land tenure in Eretz Yisrael.

Torah isn't socialist, but it isn't libertarian, either. (Admittedly the US system is also neither.)

Dave said...

I don't know that I'm that rare. I do value things other than financial compensation, though. (That does cause some problems for microeconomic theory, though.)

I don't think you are that rare at all.

People do not limit themselves to financial compensation.


Let us assume that there are no legal impediments to the following scenario. I, a business owner, offer to not only hire you, but to pay the full tuition for all of your children at any schools you choose. Not only that, but I will "gross up" your monetary compensation such that you don't take a tax hit for that.

However, I require that you have lunch with me every day, and we will both have a bacon cheeseburger each day, as a condition of employment.

I doubt very highly whether any of the Orthodox participants in this discussion would accept the offer.

If I changed the requirement to making an offering at an idol, I daresay that none would.

What if I make it less extreme?

If I keep the compensation the same, but the job itself requires that you be separated from your family for all but 4 weeks a year (you can pick the 4 weeks), how many would accept?

Orthonomics said...

I do value things other than financial compensation, though. (That does cause some problems for microeconomic theory, though.)

No it doesn't. Certain things carry their own value.

Dave said...

No it doesn't. Certain things carry their own value.

I think it's more accurate to say that people put an economic value on things.

Orthonomics said...

Dave-Exactly.

Dave said...

That doesn't change the fact that it breaks a fair bit of the predictive power of economics.

Even if you assume that people are perfectly rational actors (and I think the evidence is pretty clear that they are not), and even if you assume that they have perfect information (and I think everyone agrees that they don't), the different valuations breaks predictions.

We know that everyone places economic value on actions/things/ethics/experiences, pretty much everything. But what those valuations are is difficult enough to measure in the small, and I don't think anyone has come close in the large.

Moreover, it shifts. Ten years ago, a relatively small group placed significant economic value on "clean" technology or carbon footprints. Clearly, that has shifted dramatically.

Shifting it back to the focus of the blog, consider how much the valuations of behaviors have shifted in the frum community over the past 40 years.