HESA

Higher Education Strategy Associates

November 16

An Interesting but Irritating Report on Graduate Overqualification

On Thursday, the Office of Parliamentary Budget Officer (PBO) released a report on the state of the Canadian labour market.  It’s one of those things the PBO does because the state of the labour market drives the federal budget, to some extent.  But in this report, the PBO decided to do something different: it decided to look at the state of the labour market from the point of view of recent graduates, and specifically whether graduates are “overqualified” for their jobs.

The methodology was relatively simple: using the Labour Force Survey, determine the National Occupation Code (NOC) for every employed person between the ages of 25 and 34.  Since NOCs are classified according to the level of education they are deemed to require, it’s simple to compare each person’s level of education to the NOC of the job they are in, and on that basis decide whether someone is “overqualified”, “underqualified” or “rightly qualified”.

So here’s what the PBO found: over the past decade or so, among university graduates, the rate of overqualification is rising, and the rate of “rightly qualified” graduates is falling.  Among college graduates, the reverse is true.  Interesting, but as it turns out not quite the whole story.

Now, before I get into a read of the data, a small aside: take a look at the way the PBO chose to portray the data on university graduates.

Figure 1: Weaselly PBO Way of Presenting Data on Overqualification Among 25-34 Year Old University Graduates

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Wow!  Startling reversal, right?  Wrong.  Take a look at the weaselly double Y-axis.  Here’s what the same data looks like if you plot it on a single axis:

Figure 2: Same Data on University Graduate Overqualification, Presented in Non-Weaselly Fashion

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See?  A slightly less sensational story.  Clearly, someone in PBO wanted to spice up the narrative a bit, and did so by making a pretty unforgivable graph, one that was clearly meant to overstate the fundamental situation.  Very poor form from the PBO.

Anyways, what should we make of this change in university graduates’ fortunes?  Well, remember that there was a massive upswing in university access starting at the tail end of the 1990s.  This meant a huge change in attainment rates over the decade.

Figure 3: Attainment Rates Among 25-34 Year-Olds, Canada

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What this upswing in the university attainment rate meant was that there were a heck of a lot more university graduates in the market in 2013 than there was, say, a decade earlier.  In fact, 540,000 more, on a base of just over a million – a 53% increase between 1999 and 2013.  Though the PBO doesn’t mention it in the report, it’s nevertheless an important background fact. Indeed, it likely explains a lot of the pattern change we are seeing.

To see how important that is, let’s look at this in terms of numbers rather than percentages.

Figure 4: Numbers of Rightly-Qualified and Overqualified 25-34 Year Old University Graduates, 1999-2013

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In fact, the number of rightly-qualified graduates is up substantially over the last decade, and they’ve been increasing at almost (though not quite) as fast a rate as the number of “overqualified” graduates.  For comparison, here’s the situation in colleges:

Figure 5: Numbers of Rightly-Qualified and Overqualified 25-34 Year Old College Graduates, 1999-2013

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As advertised, there’s no question that the trend in college outcomes looks better than the one for universities.  Partly that’s because of improvements in colleges’ offerings, and partly it has to do with the run-up in commodity prices, which made college credentials more valuable (remember the Green-Foley papers? Good times).

What should you take from all of this?  If nothing else, don’t forget that comparing university outcomes over time is hard because of the changing size and composition of the student body.  Remember: the median student today wouldn’t have made it into university 25 years ago.  Average outcomes were always likely to fall somewhat, both because more graduates means more competition for the same jobs, and also because the average academic ability of new entrants is somewhat lower.

It would be interesting, for instance, to see these PBO results while holding high school grades constant – then you’d be able to tell whether falling rates of “rightly-qualified” graduates were due to changing economy/less relevant education, or a changing student body.  But since we can’t, all one can really say about the PBO report is: don’t jump to conclusions.

Especially on the basis of those godawful graphs.

November 13

A Ministry of Talent

My friend and colleague, Jamie Merisotis of the Lumina Foundation in the United States, recently wrote a book called America Needs Talent.  It’s a short, popularly-oriented account of how human capital drives the economy, and what countries and cities can do to acquire it.  One of the suggestions he makes is for a federal “Department of Talent”, which is intriguing as a thought experiment, if nothing else.  So let’s explore that idea for a moment.

To begin, let’s be clear about what Merisotis means by “talent”.  He’s painting with a very broad brush here.  Yes, he means “top talent” in the sense of highly qualified scientists, entrepreneurs, etc.,  but he’s also talking about the talents one acquires through post-secondary education: everything from car repair to microbiology.  So when he says “Department of Talent”, what he’s really talking about is a “Department of Skills”, just with a much less vocational sheen.

Most of Merisotis’ argument could be transported to Canada (albeit in somewhat muted form, given the differing nature of the two countries’ federal responsibilities).  The primary goal of any government is (or should be) to raise levels of productivity.  No increase in productivity, no increase in standard of living (or standard of public services).  So there’s always a need to come up with better ways to think through how a country can raise its overall skills profile.

Yet at the federal level, we split up that responsibility among four ministries (warning: I have not yet bothered to learn the snappy new names the Trudeau government has bestowed upon departments).  In Canada, we have an Industry/Science Ministry, which plays a huge role in developing scientific careers, and fostering skills/knowledge through science-business relationships.  We have a Human Resources Ministry (now on its sixth name in twelve years), which supports training and learning in a variety of guises.  We have an Immigration Ministry in charge of bringing people into the country, which sort of co-ordinates with Human Resources in working out labour market needs, but not necessarily in ways that maximizes skill acquisition.  And finally, we have a Foreign Ministry, which is increasingly interested in attracting foreign students, and that has knock-on effects for immigration down the road.

And so, genuine question: why not hive-off the bits of all of those ministries that focus on talent development and acquisition, and stick them into a single ministry?  Why not create an organization with a singular focus of making our talent pool across all industries better?  It’s not impossible; in fact, Saskatchewan already tried it for several years with a ministry of Advanced Education, Employment and Immigration (an experiment recently unwound for reasons that remain obscure).

I think the quick and simple answer here is that changing bureaucratic chairs is not the same as changing actual policy orientation, and still less about changing results.  In reality, you might create a lot of churn, with very few actual results.  Still, the thought experiment is a useful one: who is in charge of ensuring that Canada always has the best talent at its disposal, in every field of endeavour?  Who makes sure that our education and immigration policies are complimentary?  Given the nature of our federation, this is always going to be a distributed function, but it seems to me that we don’t actually pose questions this way.  We talk about programs (how can we improve student loans?) or institutions (how can we increase the number of community college seats?), but only rarely do we talk about what the final talent pool will look like.

So, while a Ministry of Talent might make not make a lot of sense, there’s still much to be gained by talking about ends rather than means.  A “Talent Agenda”, maybe?  Something to think about, anyway.

November 12

Explaining the #FeesMustFall Movement

One of the more interesting policy debacles in higher education this year has been the fracas over tuition fees in South Africa, which has led to what some are calling the biggest set of anti-government protests since the end of apartheid.  Here’s what you need to know:

The protests began when universities announced fee hikes for the coming year.  On average, the fee hikes were in the 6% range, which was relatively modest given a persistent inflation rate of just under 5%, and additional cost pressures due to a falling rand (the rand is 14 = 1 USD at the moment, up from 8 = 1 USD three years ago).   This kind of increase is not unusual in South Africa, but for a variety of reasons, this year the increases brought students out into the streets in very large numbers.

There were, near as I can tell, three factors at work.  The first is generalized discontent with the ANC government (animosity that is by no means restricted to students).  Though the party can still win over 50% of the vote in elections, a lot of that support is residual loyalty for its fight against apartheid rather than approval of current policies; and since today’s students were mostly born after Mandela was released from prison, they feel less loyalty to the party than do older South Africans.  Economic growth is fading (partly due to falling commodity prices, partly due to government incompetence, particularly on energy and power generation), which means no progress on persistently high unemployment among blacks.  And if there is one file where the government has underperformed the most over the past twenty years, it’s education.  The problem is worse in K-12 than  in universities (though colleges are a right mess), but the repeated failure to sufficiently increase expenditure in higher education is a persistent failure.

The second issue is with respect to student aid.  Though the government has massively increased outlays, it has also massively increased loan losses.  Up until about seven years ago, the National Student Financial Aid System (NSFAS) had the continent’s best record of loan repayment (about 60%).  Then, the government decided – on what many regard as quite spurious grounds – to make it harder for NSFAS to collect the loans, and repayment plummeted to about 20%.  This was good news for graduates of course: more money for them; but it effectively raised the price of increasing access.  One of the casualties of that was an inability to expand  middle-class families’ access to loans, a group who subsequently feel very squeezed.

The third factor was an uptick in student militancy this past March with the #RhodesMustFall campaign.  This started at the University of Cape Town where students wanted to remove a statue of the arch-colonialist Cecil Rhodes (they succeeded).  This morphed into a wider set of protests about the progress universities have made in transforming themselves since 1994, in particular with respect to the progress of black academics.

So with all this kindling, the relatively small sparks of what vice-chancellors thought was a run-of-the-mill tuition increase turned into a major conflagration, which went under the heading #FeesMustFall (a play on the earlier Rhodes campaign).  At first the government tried to straight-arm the students, with the Higher Education minster (and Communist party chief) Blade Nzimandize claiming maladroitly that he would start his own #StudentsMustFall campaign.  When that didn’t work, the ANC began trying to co-opt the protest, claiming students’ views as their own.  Eventually the protests grew so large that President Zuma eventually froze all fees for a year, and compensated institutions to the tune of 80% of the cost of the freeze.  But the ANC has also taken steps to give itself unprecedented authority to massively intrude on universities’ autonomy, so that it can more directly control costs and remove inconvenient administrators.

The fee freeze took some of the sting out of the protests, but it also emboldened some protestors who want to see South Africa move to a free fee system.  Given that participation rates for whites are between three and four times higher for blacks, this is a curiously regressive idea (and may explain why whites were seemingly so much more prominent in the #feesmustfall protests than in those for #rhodesmustfall).  The head of South Africa’s Centre for Higher Education Trust, Nico Cloete, skewered the idea in a University World News column this weekend (read it here; it’s long but very good), saying rightly that in a society as unequal as South Africa, “affordable higher education for all” is a necessary goal, but “free higher education for all” is morally wrong.

Which is dead on, frankly.  Fix student aid so the poor get more grant aid and the middle-class get more loan aid, sure.  More money for universities to maintain quality?  Sure (South Africa has an amazing set of universities for a middle-income country, but that’s at risk over the long-term).  But spending more money to make it free for the already highly privileged?  South Africa can and should do better than that.

November 11

Times You Wish There Was a Word Other Than Research

There is something about research in modern languages (or English, as we used to call it) that sets many people’s teeth on edge, but usually for the wrong reasons.

Let’s go back a few months to Congress, specifically to an article Margaret Wente wrote where she teed-off on a paper called “Sexed-up Paratext: The Moral Function of Breasts in 1940s Canadian Pulp Science Fiction”.   Her point mostly was about “whatever happened to the great texts?”  Which, you know: who cares?  The canon is overrated, and the transversal skills that matter can be taught through many different types of materials.

But she hit a nerve by articulating a point about research in the humanities, and why the public feels uneasy about funding them.  Part of it is optics, and what looks to outsiders like childish delight in mildly titillating or “transgressive” titles.  But mostly, it just doesn’t “look like” what most people think of as research.  It’s not advancing our understanding of the universe, and it’s not making people healthier, so what’s it doing other than helping fuel career progression within academia?  And that’s not a judgement at all on what’s in the paper itself (I haven’t read the paper, I can’t imagine Wente did either); even if it were the best paper at Congress, people who defend the humanities wouldn’t likely point to a paper whose title contains the words “the Moral Functions of Breasts” as a way to showcase the value of humanities research.  The title just screams self-indulgence.

And yet – as a twitter colleague pointed out at the time – whoever wrote this piece probably is a great teacher.  With this kind of work, they can show the historical roots of things like sexuality in comics, which is highly relevant to modern issues like Gamergate.  If we want teachers to focus on material that is relevant and can engage students, and if you really want scholarly activity to inform teaching, surely this is exactly the kind of thing that should be encouraged.  As scholarly activity, this is in a completely different – and much, much better – category than, say, the colonoscopic post-modernist theorizing that was so memorably skewered during the Sokal Affair because you can clearly see the benefits for teaching and learning.

But is it “research”?

The academe doesn’t like to talk about this much because, you know, you stick to your discipline and I’ll stick to mine.   You can push the point if you want and claim that all research is similar because, regardless of discipline, research is an exercise in pattern recognition.  There are, however, some fundamental differences between what sciences call research and what humanities call research.   In the sciences, people work to uncover laws of nature; in the social sciences, people (on a good day) are working on laws (or at least patterns) of human behaviour and interaction.  In humanities, especially English/Modern Languages, what’s essentially going on is narrative-building.  That’s not to say that narratives are unimportant, nor that the construction of good narrative is easier than other forms of scholarly work.  But it is not “discovery” in the way that research is in other disciplines. 

And here’s the thing: when the public pays for research, it thinks it’s paying for discovery, not narrative-building.  In this sense, Wente taps into something genuine in the zeitgeist; namely, the public claim that: “we’re being duped into paying for something to which we didn’t agree”.  And as a result, all research comes under suspicion.  This is unfortunate: we’re judging two separate concepts of scholarly work by a single standard, and both end up being found suspect because one of them is mislabeled.

To be clear: I am not at all suggesting that one of these activities is superior to the other.  I am suggesting that they are different in nature and impact.  For one thing, the most advanced scientific research is mostly unintelligible to lower-year undergraduates, whereas some of the best narrative work is actually – much like Sexed-up Paratext – intended precisely to render some key academic concepts more accessible to a broader audience.

It is precisely for this reason that we really ought to have two separate words to describe the two sets of activities.  The problem is finding one that doesn’t create an implicit hierarchy between the two.  I think we might be stuck with the status quo.  But I wish we weren’t.

November 10

An Update on England’s Teaching Excellence Framework

Last week, the UK Minister for Business Innovation and Skills (which is responsible for higher education) released a green paper on higher ed.  It covered a lot of ground, most of which need not detain us here; I think I have a reasonable grasp of my readers’ interests, and my guess is that the number of you who have serious views about whether the Office For Fair Access should be merged into a new Office for Students, along with the Higher Education Funding Council for England, is vanishingly small (hi, Andrew!).  But it’s worth a quick peek into this document because it puts a bit more meat on the bones of that intriguing notion of a Teaching Excellence Framework.

You may remember that back in the summer I reviewed the announcement of a “Teaching Excellence Framework” wherein institutions that did well on a series of teaching metrics would be rewarded with the ability to charge higher tuition fees.  The question at the time was: what metrics would be used?  Well, the green paper is meant to be a basis for consultation, so we shouldn’t take this as final, but for the moment the leading candidates for metrics seem to be: i) post-graduation employment; ii) retention rates; and, iii) student satisfaction indicators.

Ludicrous?  Well, maybe.  At the undergraduate level, satisfaction tends to correlate with engagement, which at some vague level correlates with retention, so there’s sort of a case here – or would be if they weren’t already measuring retention.  Retention is not a silly outcome measure either, provided you can: a) control for entering grades (else retention be simply a function of selectivity), and b) figure out how to handle transfer students.  Unfortunately, it’s not clear from the document that either of these things has been thought through in any detail.

And as for using post-graduate employment? Again, it’s not necessarily a terrible idea. However, first: the regional distribution of graduate destinations matters a lot in a country where the capital city is so much richer than the rest of the country.  Second: the mantra that “what you study matters more than where you study” works in the UK, too – measuring success by graduate incomes only makes sense if you control for the types of degrees offered by each institution.  Third: the UK only looks at graduate incomes six months after graduation.  Presumably, a longer survey period is possible (Canada does it at three years, for instance), but the only thing on the table at the moment is the current laughably-short period.

So, there’s clearly a host of problems with the measures.  But perhaps even more troubling is what is on offer to institutions who do “well” on these measures.  The idea was that institutions would pay attention to “teaching” (or whatever the aforementioned load of indicators actually measures) if doing so allowed them to raise tuition above the current cap of £9,000.  However, according to the green paper, the maximum an institution will be allowed to increase fees every year is inflation.  Yet at the moment CPI is negative, which suggests this might not be much of an incentive.  Even if inflation returns to 1% or so, one has a hard time imagining this being enough of a carrot for all institutions to play along.

In sum, this is not a genuine attempt to find ways to encourage better teaching; rather, it is using a grab-bag of indicators to try to differentiate the sector into “better” and “worse” actors, and in so doing try to create more “signals of quality” to influence student decision-making.  Why does it want to do this?  Because it desperately wants higher education to work like a “normal” market, the government is trying to rationalize some of its weirder ideas about how the system should be run (the green paper also devotes quite a bit of space to market entry, which is code for letting private providers become universities with less oversight, as well as market exit, which is code for letting universities fail).

Though the idea of putting carrots in place to encourage better teaching has value, an effective policy would require a lot more hard thinking about metrics than the UK government appears willing to do.  As it stands, this policy is a dud.

November 09

Yukon College’s Difficult Path to University Status

Last week, Yukon Education Minister Doug Graham announced that the territory was going to change the name of Yukon College to Yukon University.  The College then proceeded to state that it would launch new degree programs and seek membership in Universities Canada in 2017.

Well, now.  How is that going to work exactly?

Universities Canada has some pretty clear guidelines about membership.  Point 4 says that a prospective member must have “… as its core teaching mission the provision of education of university standard with the majority of its programs at that level”.  At the moment, only five of Yukon College’s fifty-odd programs are at degree level (Social Work, Public Administration, Environmental and Conservation Sciences, Education – Yukon Native Teacher, and Circumpolar Studies). Now, presumably it could upgrade some of its career & tech programming into full degree programs to change the balance a bit, but it’s not clear that would be to students’ benefit: there are good reasons – cost among them – to keep programs like business administration, early childhood education, and various technologist programs at two years rather than four.

One possible solution would be to split the administration of the college and the university, so that the two could share physical space, infrastructure, and back-office functions, while at the same time having separate management and programming.  This might get Yukon College off one hook, but it would quickly get snagged by another.  Universities Canada also requires prospective members to have 500 FTEs for at least two years before joining.

In terms of student numbers, Yukon college looks like this:

Yukon College FTE Students by Stream, 2012-13 (Yukon College Annual Report 2013-14, FTE = FT + [PT/3.5])

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Degree and transfer programs together only make up 253 FTEs, or about a third of the college’s 748 FTE students in credit programming.  One would need some really big increases in student numbers to change this.  But Yukon College would likely have trouble moving the needle much.  Here’s the history of Yukon College enrolments:

Total FTE Enrolments at Yukon College, 2007-08 to 2014-15

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Numbers at the college have never gone over 850, and the highest two-year average is about 820.  Even assuming you could nudge university numbers from a third to a half of total enrolments, that would still leave a newly-separated university nearly 100 students shy of the required 500.

Now, there’s nothing stopping a Yukon institution from using the name “university”, even if Universities Canada doesn’t agree.  Quest University seems to be doing fine without Universities Canada membership, for instance.  But Universities Canada is still the closest thing Canada has to an accreditation system, and so being on the outside would hurt.

But here’s a wild-and-crazy suggestion:  Yukon wants a university; Nunavut wants a university; presumably, at some point, the Northwest Territories will glom onto this idea and want a university, too.  Any one of them, individually, would have a hard go of making a serious university work.  But together, they might have a shot.

Of course, universities are to some extent local vanity projects.  I’m sure each territory would prefer its own university rather than share one.  But these things cost money, especially at low volume.   We could have three weak northern universities, or we could have one serious University of the North.  Territories need to choose carefully, here.

November 06

What Canadians Think About Universities, and Where Canadian Universities Want To Go

A couple of quick notes about two interesting things from Universities Canada this week.

The first is the release of some public opinion polling, which they commissioned in the spring, regarding universities and other forms of higher education.  You can see the whole thing here, but I want to highlight a couple of slides, in particular.

The first is this one:

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It seems Canadians are overwhelmingly positive about most post-secondary institutions (though Quebecers clearly have a few doubts about CEGEPs).  Somewhat perplexingly, UnivCan also felt the need to test Canadians’ opinions about universities in Europe (do Canadians really have deep feelings about French grands écoles, German fachhochschulen, and Romanian politehnici?).  Mostly, though, this is all to the good.

But the more interesting set of answers is this one:

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Turns out Canadians think their universities are world-class, practical, and produce valuable research… but they also really need to change.  Which seems about right to me.  However, one wishes there might have been a follow-up: what kind of change is needed, exactly?

Often times, these kind of dissonant results (you’re great/please change) give the poll-reader a lot of room to cherry-pick.  Is UnivCan doing this?  Well, maybe.  Take a look at the new “Commitments to Canadians” the Presidents collectively issued this week.  They commit themselves to:

  • Equip all students with the skills and knowledge they need to flourish in work and life, empowering them to contribute to Canada’s economic, social, and intellectual success.
  • Pursue excellence in all aspects of learning, discovery, and community engagement.
  • Deliver a broad range of enriched learning experiences.
  • Put our best minds to the most pressing problems – whether global, national, regional, or local.
  • Help build a stronger Canada through collaboration and partnerships with the private sector, communities, government, and other educational institutions in Canada and around the world.

OK, so some of this is yadda yadda, whatever kind-of-stuff. (“pursue excellence in everything we do” is utterly void of meaning). But an emphasis on partnerships is good, as is the commitment to preparing students for work & life – in that order.  Something stronger on internships and co-ops would have been better: both UC Chair Elizabeth Cannon and UC President Paul Davidson have spoken a lot about co-ops in recent speeches, but a specific commitment to them is lacking in the actual statement.  That’s too bad: co-ops and internships have the potential to be a genuine and unique value proposition for Canadian higher education; our universities do a lot more of it than those in other developed countries.  And pretty much everyone loves them, bar the sniffy types who disdain them as “mere training”.

The issue is follow-through, of course, and Lord knows shifting institutional cultures ain’t easy.  But one gets the sense that Canadian universities are absorbing the change message, and acting upon it.  That’s good news.

Have a good weekend.

November 05

World-Class Universities in the Great Recession: Who’s Winning the Funding Game?

Governments always face a choice between access and excellence: does it make more sense to focus resources on a few institutions in order to make them more “world-class”, or does it make sense to build capacity more widely and increase access?  During hard times, these choices become more acute.  In the US, for instance, the 1970s were a time when persistent federal budget deficits as a result of the Vietnam War, combined with a period of slow growth, caused higher education budgets to contract.  Institutions often had to choose between their access function and their research function, and the latter did not always win.

My question today (excerpted from the paper I gave in Shanghai on Monday) is: how are major OECD countries handling that same question in the post-2008 landscape?

Below, I have assembled data on real institutional expenditures per-student in higher education, in ten countries: Canada, the US, the UK, Australia, Sweden, Switzerland, France, Germany, the Netherlands, and Japan.  I use expenditures rather than income because the latter tends to be less consistent, and is prone to sudden swings.  Insofar as is possible, and in order to reduce the potential impact of different reporting methods and definitions of classes of expenditure, I use the most encompassing definition of expenditures given the available data.  The availability of data across countries is uneven; I’ll spare you the details, but it’s reasonably good in the US, the UK, Canada, Australia, and Sweden, decent in Switzerland, below-par in Japan, the Netherlands, and Germany, and godawful in France.  For the first six countries, I can compare with reasonable confidence how “top” universities (as per yesterday, I’m defining “top” as being among the top-100 of the Academic Ranking of World Class Universities, or the ARWU-100 for short).  In the six countries with the best data, I can differentiate between ARWU-100 universities and the rest; in the other four, I have only partial data, which nevertheless leads me to believe that the results for “top” universities is not substantially different from what happened to all institutions.

Figure 1 basically summarizes the findings:

Figure 1: Changes in Real Per-Student Funding Since 2008 for ARWU-100 and All Universities, Selected OECD Countries

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Here’s what you can take from that figure:

1)  Since 2008, total per-student expenditures have risen in only three countries: the UK, Sweden, and Japan.  In the UK, the increase comes from the massive new tuition fees introduced in 2012.  In Sweden, a lot of the per-student growth comes from the fact that enrolments are decreasing rapidly (more on that in a future blog).  In Germany, per-student expenditure is down since 2008, but way up since 2007.  The reason?  The federal-länder “higher education pact” raised institutional incomes enormously in 2008, but growth in student numbers (a desired outcome of the pact) meant that this increase was gradually whittled away.

2)  “Top” Institutions do better than the rest of the university sector in the US, Canada, and Switzerland (but for different reasons), but worse in Sweden and Australia.  Some of this has to do with differences in income patterns, but an awful lot has to do with changes in enrolment patterns too, which are going in different directions in different countries.

3)  Australian universities are getting hammered.  Seriously.  Since 2008, their top four universities have seen their per-student income fall by 15% in real terms.  A small portion of that seems to be an issue of some odd accounting that elevated expenditures in 2008, and hence exaggerates expenses in the base year; but even without that, it’s a big drop.  You can see why they want higher fees.

4)  Big swings in funding don’t make much short-term difference in rankings – at least at the top.  Since 2008, top-100 universities in the US have increased their per-student expenditure by 10%, while Australian unis have fallen by 15%.  That’s a 25% swing in total.  And yet there has been almost no relative movement between the two in any major rankings.  When we think about great universities, we need to think more about stocks of assets like professors and laboratories, and less about flows of funds.

So there’s no single story around the world, but there are some interesting national policy choices out there.

If anyone’s interested in the paper, I will probably post it sometime next week after I fix up a couple of graphs: if you can’t wait, just email me (ausher@higheredstrategy.com), and I’ll send you a draft.

November 04

How Canadian Universities Got Both Big and Rich

Earlier this week, I gave a speech in Shanghai on whether countries are choosing to focus higher education spending on top institutions as a response to the scarcity of funds since the start of the global financial crisis.  I thought some of you might be interested in this, so over the next two days I’ll be sharing some of the data from that presentation.  The story I want to tell today is about how exceptional the Canadian story has been among the top countries in higher education.

(A brief aside before I get started on this: there is nothing like a quick attempt to find financial information on universities in other countries to put our own gripes – Ok, my gripes – about institutional transparency into some perspective.  Seriously, you could fill the Louvre with what French universities don’t publish about their own activities.)

For the purpose of this exercise, I compare what is happening to universities generally in a country, to what is happening at its “top” universities.  To keep things simple, I define as a “top” university any university that makes the Top 100 of the Shanghai Academic Ranking of World-class Universities (ARWU).  In Canada, that means UBC, Toronto, McGill, and McMaster (yes, it’s an arbitrary criteria, but it happens to work internationally).  I use expenditures rather than income because fluctuations in endowment income make income numbers too noisy.  Figure 1 shows the evolution of funding at Canadian universities in real (i.e. inflation-adjusted) dollars.

Figure 1: Real Change in Expenditures, Canadian Universities 2000-01 to 2012-13, Indexed to 2000-01 (Source: Statistics Canada/CAUBO Financial Information of Universities and Colleges Survey)

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So this is actually a big deal.  On aggregate, Canadian universities saw their expenditures grow by nearly 70% in real dollars between 2000 and 2010.  For “top” universities, the figure was a little over 80%  (the gap, for the most part, is explained by more research dollars).  Very few countries in the developed world saw this kind of growth.  It’s really quite extraordinary.

But a lot of that money went not to “improvement”, per se, but rather to expanding access.  Here are the same figures, adjusted for growth in student numbers.

Figure 2: Real Change in Per-Student Expenditures, Canadian Universities 2000-01 to 2012-13, Indexed to 2000-01

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Once you account for the big increase in student numbers, the picture looks a little bit different.  At the “top” universities, real per-student income is up 20% since 2000, but about even since the start of the financial crisis; universities as a whole are up about 8% since 2000, but down by nearly 10% since the start of the financial crisis.

This tells us a couple of things.  First, Canadians have put a ton of money, both collectively and as individuals, into higher education over the past 15 years.  Anyone who says we under-invest in higher education deserves hours of ridicule.  But second, it’s also indicative of just how much Canadian universities – including the big prestigious ones – have grown over the past decade.  Figure 3 provides a quick look at changes in total enrolment at those top universities.

Figure 3: Changes in enrolments at highly-ranked Canadian universities, 2000-2001 to 2012-13, indexed to 2000-2001

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In China, the top 40 or so universities were told not to grow during the country’s massive expansion of access, because they thought it would affect quality.  US private universities have mostly kept enrolment growth quite minimal.  But chez nous, McGill’s increase – the most modest of the bunch – is 30%.  Toronto’s increase is 65%, and McMaster’s is a mind-boggling 80%.

Michael Crow, the iconoclastic President of Arizona State University, often says that where American research universities get it wrong is in not growing more, and offering more spaces to more students – especially disadvantaged students.  Well, Canadian universities, even our research universities, have been doing exactly that.  What we’ve bought with our money is not just access, and not just excellence, but accessible excellence.

That’s pretty impressive. We might consider tooting our own horn a bit for things like that.

November 03

Scientists vs. Universities: Does War Lie Ahead?

Because universities lobby for science money, there is often a naïve assumption that the interests of scientists (academic ones, anyway) and those of universities are aligned.  But they are not.  In Canada, there is sometimes broad agreement about what to push for (the Canada Foundation for Innovation in the late 1990s was an example), but I would argue that today the interests of scientists and those of universities are about as far apart as they have been at any time in my adult life.

There are two major flashpoints in this fight.  The first has to do with the changing characteristics of science in this country.  Under the Harper Conservatives, there was an ever-increasing tendency for the granting councils to add increasing amounts of “applied” elements to basic research funding.  I wrote about this yesterday so I won’t belabour the point, except to say this: the main university lobbies – Universities Canada and the U-15 – were very, very quiet about this drift.  I can’t say they never raised the issue with government; my guess is that they did so behind closed doors.  But they were never seen to put any public pressure on government on this file, presumably because they fretted about the Conservatives’ reaction to any public discourse that wasn’t uniformly positive.  But that angered and alienated a lot of researchers.

The second flashpoint was the creation of Canada First Research Excellence Fund (CFREF).  This was a new pool of research money presented in the 2014 budget, which was designed to give whacking huge loads of cash to individual research universities on a particular research theme.  The first round of awards, which wrapped up just before the election, saw money go to five universities: $114 million to U of T for regenerative medicine, $66 million to UBC for quantum materials, $33 million to Sherbrooke for quantum science and quantum technologies, $37 million to Saskatchewan  for Global Food Security, and $98 million to Laval for something called Sentinel North, which I can’t begin to explain, but sounds pretty cool (all figures are over 7 years).

Now, CFREF makes tons of sense from the point of view of individual universities.  Getting a big hunk of cash for a single project is a great way to give a university an enhanced and more focused profile, and to find ways to leverage money from other sources.  Basically, it’s a way of getting the federal government to act like a transformational donor.

But there are two big problems with CFREF; first, it’s new money for research at a time when the value of granting council dollars are slowly falling, and second, it’s desperately unclear that spending money this way makes any sense for the country as a whole.  If you really thought it was important for the country to spend $66 million on quantum materials, is dropping all of it at one university likely to be the most productive way to use it?  (Hint: no.)  Researchers understand this problem, and are deeply annoyed that university presidents don’t seem to.

And so, I think, we have a recipe for a real struggle.  An increasing number of academic scientists are coming to believe that university presidents do not represent their interests.  But they have almost no means with which to get their opinion across in Ottawa.  Neither CAUT nor the disciplinary federations have anything like the power and access of the U-15 or Universities Canada in the capital.

So what could happen?  I am starting to think this fight may get played out on Senate floors across the country.  Academics can’t defeat university presidents in Ottawa, but they can pass motions in Senate directing the university to, for instance, support money for granting councils over money for CFREF, or to turn up the volume on criticism of the applied research drift.  It probably wouldn’t take more than 2 or 3 such motions at major universities to get Presidents scrambling to start a better internal dialogue about funding priorities.

That said, such exercises are hard to organize, and I kind of doubt anybody’s going to organize this in time to change the U-15 or Universities Canada pre-budget statements, which are already being drafted.  But I do think there is trouble ahead, and Senates are the likeliest forum for this to play out.  It could get ugly. Watch this space.

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