Higher Education Strategy Associates

July 05

Today’s Statscan Youth Jobs Report

Hi there.  Just a slight deviation from the summer publication schedule to bring you some perspective on the youth employment numbers coming out of StatsCan today.

Unless something has gone seriously gaga in the youth labour market in the past few weeks, today’s Labour Force Survey release will say that slightly over 70% of students aged 20-24 are employed and that unemployment among these students is in the 7-9% range. That sounds pretty good; the problem is that StatsCan’s definition of unemployment doesn’t even vaguely correspond to how students see the issue.

The basic problem is that StatsCan defines someone as being “out of the labour force” if they are in full-time studies; as a result, students taking summer courses are excluded from the calculation.  But in fact, as our own 2012 survey of summer employment showed, over 70% of summer students are also either working or looking for a job; among this group, unemployment typically runs at between 20 and 30% (last year, the figure was 29%; this year, it is 23%).  Indeed, one reason many students take summer courses in the first place is precisely because their jobs search was unsuccessful!  

Although our full annual employment report won’t be out for a bit, I want to provide you with some statistics on one other labour issue currently generating a lot of attention: unpaid internships.  Our preliminary examination of the data suggests that 5.4% of students are in some kind of internship or practicum this summer.  Of these, roughly half are educationally-related (e.g. mandated practicums in teaching or social work), meaning that about 2.7% of all students (or about 27,000 across the country) are in unpaid internships this summer.  That’s a long way below the 100-300K estimates one sees in the press these days, but it’s not inconsistent with those numbers since a) those larger figures represent internship positions across an entire year rather than positions at any one time, and b) our survey looks only at current university students and does not include either college students or recent graduates. 

Lastly, a key point about these unpaid internships: they’re mostly part-time affairs.  The median unpaid internship is just a 14 hours per week commitment; as a result, fully half of the students with unpaid internships are able to gain an income by working either full- or part-time. 

Have a good weekend, and be wary of overly rosy LFS statistics.

July 02

One Thought to Start Your 147th Year, Canada

Some of you have noted that I am a little hard on this country of ours and its higher education system(s).  That’s a fair comment: the sense of complacency around our education system and its alleged virtues does indeed drive me absolutely mental most days and I have no qualms venting about it. 

(Note to our international readers: the most important thing to know about Canada is that our national dress is fleece.  Because comfort trumps pretty much everything else.  Canadian policy-making is much easier to understand once you grasp this element of our psyche.)

It being our national holiday and all, I thought perhaps it would behoove me to be a bit more charitable.  So here goes:

Canada has one of the best systems of higher education in the world.  We don’t waste money on having tons of tiny little schools.  We have a fairly sensible balance between colleges and universities.  We have a relatively open access policy that gives people plenty of second and third chances.  And our scientific output is respectable if not world-beating.  Pick whatever indicator you want – access, retention, scientific output – we’re never at the very top, but we’re usually somewhere in the top third or so among all OECD countries, and that’s pretty good. 

There are really only a handful of other peoples whose systems you’d realistically want to trade places with.  The Dutch, maybe.  The Finns.  The Norwegians.  That’s about it.  Oh sure, there are some features of other countries’ systems we might like to cherry pick.  It’d be great to have the odd Ivy League school, or European-style apprenticeship system, as long as you didn’t have to take all the other baggage that goes with it (hundreds of overpriced, financially precarious liberal arts colleges and a socially-exclusionary secondary school streaming policy).

Ok, that’s my two paragraphs of charity.  Before we get too excited about these achievements, we should probably be honest about how we got here.  If we’re honest, it’s not because of any native genius or careful planning; rather, it’s because we spend a lot on higher education.  As a percentage of GDP, there are only a couple of other countries in the world (basically the US and Korea) who spend as much as we do, and the main reason we come out ahead of those two is that unlike them we’ve managed to keep pretty much all our money – public and private – inside the framework of public institutions.  Indeed, the surprise would be if we didn’t achieve all that given how much we collectively pay for it.

The problem is, the money isn’t there any more.  For reasons I’ll explore over the coming weeks, apart from BC and Alberta, our higher education system is almost certainly going to be dealing with declining income for the next few years.  We won’t be able to get by on dollars alone.  And that means that in order to continue our high level of performance, we really will need to start thinking a lot harder about efficiency and productivity in higher education. 

Culturally, this will require a major shift in Canadian higher education management.  How big?  Heck. we might even have to stop wearing fleece.


June 24

The THE’s Top 100 under 50

So, last week the Times Higher put out one of its two subsidiary sets of rankings called the Top 100 under 50 – that is, the best “young” (under 50 years old) universities in the world.  The premise of these rankings is that young universities don’t really get a fair shake in regular rankings, where the top universities, almost all from before World War I, dominate based on prestige scores alone.  That the THE would admit this is both excellent and baffling.  Excellent because it’s quite true that age and prestige seem to be correlated and any attempt to get rid of bias can only be a Good Thing.  Baffling, because once you admit your main annual rankings exercise is strongly affected by a factor like age which an institution can do nothing about – well, what’s the point?  At least with the Under-50s a good score probably tells us something about how well-managed an institution is; what the main rankings tell us is more of a mystery.

These rankings  interesting because they highlight a relatively homogeneous group of institutions.  Few of these are North American because most of our institutions were built before 1963 (from Canada, only Calgary, SFU and Vic make this list  and they’ll all be too old in a couple of years).  They’re an intriguing look into the world’s up-and-coming universities: they’re mostly European (and exactly none of them are from the People’s Republic of China).

But there is some serious wonkiness in the statistics behind this year’s rankings which bear some scrutiny.  Oddly enough, they don’t come from the reputational survey, which is the most obvious source of data wonkiness.  Twenty-two percent of institutional scores in this ranking come from the reputational ranking; and yet in the THE’s reputation rankings (which uses the same data) not a single one of the universities listed here had a reputational score high enough that the THE felt comfortable releasing the data.  To put this another way: the THE seemingly does not believe that the differences in institutional scores among the Under-50 crowd are actually meaningful.  Hmmm.

No, the real weirdness in this year’s rankings comes in citations, the one category which should be invulnerable to institutional gaming.  These scores are based on field-normalized, 5-year citation averages; the resulting institutional scores are then themselves standardized (technically, they are what are known as z-scores).   By design, they just shouldn’t move that much in a single year.  So what to make of the fact that the University of Warwick’s citation score jumped 31% in a single year, Nanyang Polytechnic’s by 58%, or UT Dallas’ by a frankly insane 93%?  For that last one to be true, Dallas would have needed to have had 5 times as many citations in 2011 as it did in 2005.  I haven’t checked or anything, but unless the whole faculty is on stims, that probably didn’t happen.  So there’s something funny going on here.

A final point: the geographical distribution of top schools will surprise many.  Twelve schools from the PIGS (Portugal, Ireland, Greece, Spain) made the list, but only one school (State University Campinas) from the BRIC countries did.  That tells us that good young universities are probably a seriously lagging indicator of economic growth – not a category to which many aspire.

June 17

A Dreadful Argument About Tuition Fees

I see that the Canadian Centre for Policy Alternatives has just released a new paper by Hugh MacKenzie called The Impact of Taxation on the Higher Education Debates. It’s worth a read because it sets out the argument against higher fees in the most respectable terms possible – certainly more respectable that anything student groups themselves have come up with.

It is still, however, a pretty crap argument.

The spiel runs like this: the lazy talking point about how higher education subsidies mean that “the poor pay for the education of the rich” isn’t actually true. Our system of income taxes is quite progressive; the top income quartile pays about 69% of all taxes and the bottom quartile pays for just one percent. As a result, on a net basis, the bottom income quartile gains from the current system because they make up more than 1% of all university students.

MacKenzie is dead on about this. It’s where he goes from there which is problematic. He continues by arguing that its OK that subsidies for education, on aggregate, end up disproportionately with the children of wealthy families, because on average, the wealthy pay most of the taxes. Effectively, he argues that as long as the top income quartile doesn’t claim more than 69% of the expenditures of any program, and as long as the lowest income quartile gets more than 1% of the expenditures, the program is ipso facto progressive. And since higher education meets that test, it’s OK to spend more money on it.

This, to put it mildly, is an interesting definition of the term “progressive”. Education Savings Grants, which mostly go to the rich, would be considered progressive according to this definition. So, too, would the Bush Tax cuts (h/t Stephen Gordon).

Surely the relevant issue isn’t whether public subsidies can pass an unbelievably weak test such as this. The issue is how to ensure that subsidies are directed to those who need them most. This of course is what most people who argue for subsidy reform argue; higher fees for the rich, lower net fees for the poor through increased grants. For McKenzie this option is never considered; whether through ignorance or deliberate omission, he never mentions the billion or so in student grants which permit this kind of pro-poor price-discrimination.

MacKenzie self-righteously claims that anyone who disagrees with his views on progressiveness is just “appropriat(ing) the language of fairness” while “arguing against public policies whose goals include equalization of opportunity”. So be it. If arguing against providing rich families with bigger subsidies because they pay more taxes makes me anti-progressive, I’ll wear that label with pride.

The question is – why wouldn’t CCPA do the same?

June 14

Summer Break

Hi all.

It’s time for me to step back from the blogging for a few weeks.  As of Monday, we’ll be switching to a “One Thought to Start Your Week” until the middle of August; that will let me catch up a bit on things and get prepped for the fall.

I want to say thanks to all of you for reading and commenting.  I learn a lot from your feedback and I’m very grateful for all of it, even when you’re (sometime correctly) chewing me out.  The thousands-strong readership is a really interesting cross-section of academia, and includes hundreds of people from outside Canada as well (what, I always wonder, do they make of it? Are they here for the solid policy analysis or just the Glen Murray jokes?  Mysteries abound.)

But I would like, if I may, to make one tiny request before leaving you  alone (mostly) for the summer: if it’s not too much trouble, could you take a minute to tell me what you like and don’t like?  What should I be writing about more?  What should I be writing about less?  I kind of get the impression that most of you enjoy it when I stick it to the “MOOC fetishists” and do my myth-busting thing about labour-market outcomes – but what else do you like?  I’d really love to know.

In any event – have a great summer and get some rest.  I have a feeling next year’s going to be a big one.



June 13

What if Higher Education Subsidies Were Transparent?

 An interesting little exercise in budget analysis:

There are just under 5600 humanities professors at Canadian universities, and 7600 in the social sciences (excluding law, which is another 600 or so).  On average, these people make about $108,000/year (slightly higher in social sciences, slightly lower in humanities).  Add another 25% on that for payroll taxes, health, and pension, and the direct costs of employing these folks is about $135,000 per year.  That comes out to about $1.85 billion in total.

Now, what do we pay these people to do, exactly?  Well, according to the standard formula (which I recognize does not apply to everyone), 40% of their time is for teaching, 40% of their time is for research, and 20% is for the ever-nebulous concept of “service”.  So, while the transparent subsidies to humanities and social science research – the ones paid through SSHRC – amount to about $700 million, the non-transparent subsidies embedded in academic salaries is, all told, another $750 million on top of that.

When you start dividing out these salary-embedded research amounts by field of study, it’s kind of fascinating, particularly in the humanities.  $33 million each year for research in philosophy; $58 million for history; $57 million for English.  That adds up: nearly $300 million for humanities-based research. That’s almost as much as we spend on transfers to First Nations for post-secondary education each year.

I am not particularly concerned here about whether this amount of spending is desirable, or whether it offers value-for-money or anything like that; I’m sure there would be good arguments both ways.  What does concern me is this: nobody in this country ever stood up and voted for $33 million of public money to be spent on research in Philosophy, and nor would they because nobody thinks that what Philosophy professors are actually paid to do.

When Canadian universities quietly – oh so quietly – began dropping faculty teaching loads about fifteen years ago, from 3/3 and 3/2 to 2/2 and 2/1, implicitly we were shifting compensation – paying more for research and less for teaching.  In some fields – mainly in the sciences –that made eminent good sense.  In others – such as the humanities – it’s not clear that made any sense at all.  After all, the ultimate defense of the humanities is “we teach kids to learn how to think”.  Fair enough: so why spend all that money paying humanities professors not to teach?

We never had a proper debate about any of this, mainly because we are not transparent about what services we are actually buying when we hire a professor.  The quality of debates on higher education would improve enormously if we did.

June 12

Projections From Queen’s Park

Professionally, I am a killjoy.  Most of my job involves explaining why education funding is not going to go back to the good times of the eighties any time soon.  How bad things are going to get differs from place to place, and today I want to show you why I think there’s big trouble still ahead in Ontario. 

Let’s start with the fact that government expenditures have risen sharply in recent years, as shown in figure 1.  The Liberals held expenditures steady at about 15% of GDP until the recession hit and that number jumped to 18%.  The government’s goal now is to reduce that amount – slowly – by freezing program expenditures at 118 Billion as of next year.  If the Tories get in, you can be sure that they’ll be spending even less than that.  So, unless you believe in an Andrea Horwath majority, the strong likelihood is that there is no new money coming into government coffers anytime soon.  If more money is going to go into PSE, it will have to be at the expense of other budget priorities.

Figure 1 – Ontario Government Expenditures as a Percentage of GDP

The problem is that health care cost inflation tends to take precedence in the scramble for spare dollars in provincial budgets. In Quebec, for instance, healthcare’s share of the budget grows by about 0.75% each year – meaning it will break 50% of the budget sometime towards the end of this decade, with other budget priorities increasingly cast into the background.

Ontario, seemingly, doesn’t have this problem, with expenditures staying relatively constant around the 40% mark.

Figure 2 – Health and Long-Term Care Expenditures as a Percentage of Overall Budget Expenditures


The problem is, this is an illusion.  Health expenditures have actually been going up by nearly 7% per year since 2001.  The only reason health care hasn’t exploded as a share of the budget is because the Liberals have been increasing all spending by a similar amount.

 Figure 3 – Annual Growth in Health Care and Total Budgeted Expenditures, Ontario, 2001-2012


But, as mentioned, the Ontario government is budgeting for zero growth in program expenditures through to 2018.    Any increase in health care costs has to be met with cuts elsewhere in the budget.  Indeed, if health care costs were to continue to rise at around 6% per year, that would mean cuts to the rest of the budget – including PSE – of roughly 22% by 2018.

Figure 4 – Implicit Ontario Budget Cuts, All Non-Health Budget Areas, Under Current Budget Caps and Various Health Care Inflation Scenarios

Maybe health care cost increases will be lower than 3% (even though that’s not happened in well over a decade).  Maybe PSE will be spared its full proportion of the cuts.  Maybe.  But it seems to me almost impossible to construct a scenario where money for PSE increases.  Cuts of 1-2% per year –enough to offset most of the potential gains from permitted tuition increases – seem much more likely.

Realistically, the only place Ontario universities are going to be getting any extra dollars over the next five years is international students.  Plan accordingly.

June 11

That teacher training announcement

Last week, the province of Ontario made an interesting decision regarding teacher education programs in the province. As of next year, programs will double in length (2 years instead of 1) and the intake will be halved.  The government says the extra year will mean higher quality graduates which – whether true or not – is an enormously amusing argument for the government to make so soon after former Minister Glen “3 years” Murray swore blind that degree length and degree quality had nothing to do with each other.

Anyways, more interesting than the length issue is the government’s rationale for reducing student intake. Essentially, given the fall in the youth population, they don’t believe it necessary to train so many future teachers.  There’s a reasonable case to be made for this: some statistics suggest that Ontario is producing 2000-3000 more teachers than the labour market can bear.

There are many third parties who think this is a great idea.  Andrew Langille, for instance, whose blog Youth and Work is ground zero for attacks on the over-production of graduates is all in favour of the cut , as indeed is everyone’s favourite higher education commentator Margaret Wente.

But let’s not kid ourselves: those 3000 kids we’re suddenly excluding from teacher’s college aren’t all going to give up the dream of being a teacher.  They’re just going to get teacher education somewhere else; most likely at places like D’Youville College in Buffalo which offers BEds according to the Ontario curriculum to Ontarians who can’t get into schools at home.  There are over a thousand Canadian students at D’Youville’s already; last week’s announcement seems sure to enrich the school’s coffers by several million a year (all the more ironic since Ontario schools are losing money on the deal).

I understand the desire not to spend money paying for training for jobs that may not exist; I also agree with the need to warn students going into professional schools about things like job placement rates.  But if people really want to pay for something, they’re going to do it, whether Minister Duguid wants them to or not.  And so it seems silly to force them over the border to do it; why can’t Ontario institutions charge full fees to students who miss out on a funded place but still want the education?  Why should only American institutions be able to benefit from that?

So sure, cut back on funded places.  Make institutions publish not just post-graduation employment rates but the rates at which graduates get full-time teaching jobs.  But don’t deny Ontario institutions the chance to compete with American ones for precious dollars.  

June 10

The Latest Bandwagon – American Students

Over the past couple of weeks, there has been a lot of talk about US students coming to Canada.  NBC ran a segment on Americans at McGill, and the Globe and Mail ran a piece on the same.  This seems to have led many institutions to start thinking “hot damn, another market! How can we grab us some of these Americans?”  

But for most institutions, this would be the wrong reaction.  Before venturing into a market, every school needs to ask itself two questions.  Why would Americans want to go to your school?  And why does your school want Americans?

Before a school starts recruiting in the US (any new market, really), some self-reflection is in order.  What, exactly, does my school offer an American that they can’t get at home?  “Cheap” isn’t good enough; Mexican universities are cheap but you don’t see American undergraduates flocking there (they weren’t flocking over our border when the dollar was at 62 cents, either).  There has to be a value proposition.

In fact, there are maybe a dozen schools in Canada that offer a mix of price and quality that make them attractive to parts of the US student population.  Students wishing to go to out-of-state flagship schools – say, Illinois or Virginia – can get similar product at a lower price in a better venue by going to McGill, Toronto or UBC (Queen’s would have a shot here, too; at a stretch, so would Alberta).  Students with their hearts set on a liberal arts education but who can’t get into any of the Tier I Liberal Arts Colleges in the US would consider St. FX, Acadia, Mount Allison or Bishop’s.  Windsor has a shot due to proximity.  For everybody else, it’s going to be a much harder sell.

Which brings us to that second question about “why Americans”: to the extent that international students are revenue sources, it’s important that they be cheap to recruit, so as to maximize net revenue.  If you’re not one of the above-mentioned institutions with a clear-cut value proposition, chances are that American students will be difficult and expensive to recruit. So why spend money chasing after them instead of, say, Korean students, when they all bring in the same amount of revenue?  You might of course just want American students because of the mix of experiences they bring to campus.  That’s fine – but you need to put a price tag on what that’s worth and limit your recruitment efforts accordingly.

In recruitment, every dollar is precious.  Institutions need to know their strengths and value propositions, and not chase every new market just because it’s new.

June 07

Shared Governance, Corruption in Education and Scientific Socialism

I’ve been in Romania this past week working with the World Bank and the Ministry of Education on an interesting strategy project. Just a few stories I thought I would pass on:

Shared Governance: In what I think was an attempt to curry favour among faculty members, the previous Romanian government brought in a bill in 2011 which created what I think is quite a unique “bicephalous” system of university government.  Under this system, the University Rector (who, as in many European countries and bits of Quebec, is elected by the university community) must share power with the President of Senate (a current faculty member).  Yay!  Faculty power!  Except the result seems to be that in a number of universities, business has ground to a halt as the two keep vetoing each others’ measures.  Not good.

Corruption in Education.  One of the alleged success stories in Romanian secondary school system over the past decade was the great increase in the number of students completing obtaining their Baccalaureate (as in France, getting one’s Bacc in Romania is a test-based affair separate from the act of finishing secondary school).   Back in 2009, over 85% of people who took the Bacc passed it.  Then they started installing webcams in test rooms to crack down on cheating.  The 2011 pass rate?  A mind-boggling 43%, suggesting that roughly half of all previous Baccs were the result of some form of fraud or cheating.  It’s obviously not a happy situation, but kudos to the government for facing up to the problem.  Confronting mass cheating on that scale takes political guts; that’s a lot of parents whose kids just lost part of their future.  The problem, of course, is that combined with a huge demographic shift (we’re now 20 years from the legalization of contraception and abortion in Romania, both of which were banned under Ceaușescu), universities just lost over half their potential intake.

Recovering from Scientific Socialism.  This is one of my favourite conversations ever about academia.

Me: (to a senior administrator at the Bucharest University of Economic Studies) So, after 1989, you must have had many faculty members who knew scientific socialism but didn’t know anything useful about the new market economy.  How did you adapt as an institution?

Senior Admin: Well, about a third of us actually did understand market economics – the ones who negotiated all the trade deals with the west.  We ended up running the place.  Another third left the university.  And another third retrained themselves and began teaching in other fields.

Me: Really?  So in what field of study does an economist who only knows Marxist slogans re-train?  Where do they teach now?

Senior Admin: Mostly in marketing.

La revedere și au un bun week-end

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