Value of College, the Skills Gap, Hiring/Being a Dean, Cost of College, Faculty Tenure…

A Spring Break Recap of Finding Equilibrium

After a deep dive into faculty tenure over the past five posts, we thought our readers deserved a Spring Break. (Well, in truth, we thought we deserved one as well – especially given our next series of posts will address current threats to institutional autonomy and self-governance!)

That said, we have welcomed many new readers to Finding Equilibrium since the first of the year and thought a quick recap of the topics we have covered since our launch on September 13, 2024 might be helpful. So here goes!

Introduction

In our first post, we laid out why we were launching this Substack:

• to contribute data-driven, research-informed thoughts on the future of higher education from the perspectives of veteran academic leaders who happen to be economists…to get beyond headlines and conventional wisdom to frame issues facing higher education from a fresh perspective, to bring informed insight on important questions, and to offer creative and actionable solutions to important problems.

We have tried to remain true to this set of principles in our work.

The Value of College

Our first series of posts explored the overarching criticism of higher education: is college worth it? We looked at why stakeholders question the value of a college degree, then dug into the arguments.

Does a college education lead to higher earnings? (Yes, for the large majority of grads). Do college graduates keep their jobs during downturns and live longer, healthier lives (Yes, the differences are pronounced). Is the college debt crisis real? (For a relatively small proportion of the total, a resounding yes.) Do college graduates take jobs that don’t require a degree? (It’s not the norm, but it happens and should get the attention of academic leaders.)

Taken together, these posts provide an overwhelming argument for the value of a college education – when students make a smart choice on what college to attend, complete their degree, and especially for majors with strong earning potential.

The Skills Gap

One criticism of higher education that continues to turn up: college graduates are not prepared for the work world. This is kind of important given the primary reason students and their families give for attending college is to get a great job/have a great career!

We took a different approach in our posts on this issue. Instead of pointing fingers at students, faculty/universities, and/or employers, we looked at a set of factors that impact the behavior of everyone involved: a lack of information, incentives that are not aligned with the goal of preparing students for the work world (students, faculty/universities, employers), structural issues that do not support career preparation, and generational differences in the students we serve today.

As we have written on more than one occasion, it is easy to be a critic but harder to bring solutions. So, in the posts referenced above (and in this post outlining a plan to address the information gap), we also laid out a set of ideas for addressing each of these factors.

Our bottom-line on the skills gap: while the vast majority of college graduates get jobs after graduation, universities can do a far better job of connecting with students and employers - modifying curricula and programs accordingly - to better prepare students for the work world. And, contrary to so many of higher education’s current challenges, this is an area universities can control/influence – building trust with stakeholders in the process.

Hiring a Dean/Being a Dean

One of our objectives with Finding Equilibrium is to provide useful insights for the individuals charged with leading universities – and encouraging faculty to consider such leadership roles. We offered our thoughts on why we found serving as Dean professionally and personally rewarding in two separate posts (David and Jay). We then laid out a set of points to consider when you are hiring a Dean. Many of these points would apply to other academic leadership roles as well.

Do University Rankings Add Any Value?

We did a couple of posts on this question. From a student’s perspective, the rankings services add some value with the detailed comparative information on universities many provide on their websites. But do numerical rankings add value for students? Not so much.

The bigger issue is when the quest for rankings becomes a substitute for framing and pursuing a differentiated mission. When rankings drive the decisions university leaders make, bad things happen…

Indirect Costs: What are They and Why Do They Matter

Unfortunately, our most popular post (by far) focused on the indirect costs of research – which we wrote as the National Institutes for Health announced a massive cut in the indirect cost rate they use to reimburse universities on research grants. These indirect costs are real and somebody has to pay them if we are to do capital-intensive research on university campuses.

Has the Real Cost of College Increased?

Everyone knows the cost of college has gone up at a rate faster than inflation – except it hasn’t. We looked at the complex way a college education is priced – and why sticker prices do not tell the story of what students and their families actually pay.

College still costs a lot and for low-income families that cost is a real barrier (unless they can find federal/state financial support). But the (loud) complaints about how much faster the cost of college has gone up relative to the price of everything else are wrong.

Hat tip to our contributors Becca Caliendo and Nayfa Johan on this post!

Faculty Tenure: Pros, Cons, and a Better Way

Our most recent series focused on faculty tenure. Faculty tenure is a pillar of higher education and is under attack as never before. At least it seems that way until you realize that that tenure has been in decline for decades and now only about 1/3 of the faculty in the US are tenured/in a tenure track position. There is so much confusion about what faculty tenure is and what it isn’t, so we started there.

We looked at some of the arguments against tenure: budget inflexibility, declining faculty productivity, and institutional flexibility, and conclude these arguments don’t hold much water. Then we looked at some economic arguments for faculty tenure, including faculty tenure as an incentive to act in the best interest of the university and in helping faculty manage the temporal and spatial risks of the extreme specialization required to earn a Ph.D.

Protecting academic freedom is a fundamental tenet of faculty tenure. We looked at what academic freedom is and isn’t and how it actually plays out in faculty research and teaching roles.

This series concluded with a set of ideas to address critics and extend the important protections of tenure. Paying more attention to non-tenure faculty and a practical post-tenure review process headlined this one.

What’s Next?

One statement in our first post has proven to be far more true than we could have possibly known at the time:

• We begin this venture at a precarious time for higher education. Public discourse increasingly challenges the wisdom of students attending college, and policy makers are increasingly skeptical about how universities are run and funded.

Reading this again: ya think???

Our next series will address the threats to institutional autonomy and self-governance that universities currently face. Erosion of trust has opened the door for draconian political actions that threaten to undermine the foundation of US higher education. How did we get here, what are the risks, and what can be done about it? We will take our shot at these questions over the next few posts.

Thanks for Reading!

We appreciate your ongoing support for our work. And, we welcome your comments and your thoughts on topics we should explore in Finding Equilibrium.

Research assistance provided by Marley Heritier.

“Finding Equilibrium” is coauthored by Jay Akridge, Professor of Agricultural Economics, Trustee Chair in Teaching and Learning Excellence, and Provost Emeritus at Purdue University and David Hummels, Distinguished Professor of Economics and Dean Emeritus at the Daniels School of Business at Purdue.