HESA

Higher Education Strategy Associates

Category Archives: access

March 25

The Cost of Expanding Access in Poor Countries

I’ve been dealing a lot with issues of access in Africa (specifically, Senegal and Uganda) over the past couple of months.  And I think I’m coming to the conclusion that there are some situations where it flat-out doesn’t make any sense to expand access.

If you’re a producer of good and services, the main advantage of poor countries is that labour is cheap.  This is why manufacturing has, over the years, drifted to lower-wage countries – first Mexico, then China, and so on.  But universities don’t work that way.  Academics are significantly more mobile than other workers; If university pay falls behind in Ghana they’ll move to Nigeria or South Africa; if it falls behind in South Africa, they’ll move to the UK or Australia.  So to keep them, salaries have to be well above local norms.  Scientific equipment is sold at a global price, as are journals and periodicals (price reduction schemes do exist for Africa, but universities in places like the Balkans or the ‘Stans are pretty much out of luck on that), which is a huge burden for poorer countries.

As a result, the price differential between rich countries and poor countries for producing university graduates is substantially less than it is for producing widgets.  You can see this most easily if you express countries’ expenditures per student on higher education as a fraction of GDP/capita.  In advanced OECD countries, that number is usually in the region of 30%; in Africa, it is frequently over 100% (and even with that disparity, it’s not even close to buying a similar end-product).  It’s quite simply enormously expensive for governments in this situation to expand higher education.

The natural instinct of higher education policy wonks in this situation is always the same: pile on more resources.  If government can’t afford it, let fee-paying students (either in public or private universities) make up the difference.  And that works, up to a point.  But you still run up against the same problem: the cost structures of those institutions aren’t that different from those of public universities, and the troubles the government has in raising money for public services is mirrored by the troubles individuals have in finding well-paying jobs to pay for that education.

Student loans are sometimes mooted as a solution to the problem, but the repayment problems are enormous.  In Africa, for instance, it’s fairly typical that the cost of a year of study is equal to about 40-50% of an entry-level salary.  That means that even if a graduate does find a job right away, their outstanding debt will be on the order of 150%-200% of their income.  Not sustainable.

This isn’t a question of public vs. private.  It is simply a question of return on investment.  At certain levels of development, there are points beyond which you either have to radically reduce the cost of higher education (perhaps via intensive use of MOOCs, as the Kepler project in Rwanda is doing), or you have to say “enough is enough”, because the return isn’t there.  It’s politically difficult to do, but as with any good, one needs to acknowledge when marginal costs start exceeding marginal benefits.  This may be one of those cases.

November 26

The Changing Median Student

Unless you’ve been in some sort of cave for the last decade, you’ve probably heard conversations about students, which begin with the phrase, “Today’s students are… less engaged/less able to write/weaker at math/not as curious/not as academically inclined…”  The obvious question of “compared to when” is usually left unanswered, and depends to some extent on the age of the person doing the kvetching; solipsistically, I always assume they’re talking about 25 years ago (when I started university). Usually, the implication is that students are coming out of high school less university-ready than they used to be, and hence, that high schools aren’t doing as good a job as they used to.

So, is it true?  Well, to start, we have to come to grips with what we mean by “students”.  The student body of the 1980s looks a lot different than the student body of 2013 – and I don’t just mean in terms of the changing ethnic or age mix.

Take a look at the following graph, which shows the change in participation rate of 18-21 year olds in Canada, over time.

Participation Rate (in percent) of 18-21 Year Olds, Canada, 1980-81 to 2010-11

 

 

 

 

 

 

 

 

 

 

 

 

Cool, huh? We tripled access rates in thirty years. Remember this the next time you hear that accessible education is dead.

Now, assume for the moment that the fraction of Canadians who go to university are all at the top-end of the academic ability scale – that is, it was the 10% most academically able students in university in 1980-81, and it’s the top 30% now.  I know that’s not literally true, but it’s true-ish, so bear with me.  Today’s median student is therefore in the 85th percentile of academic achievement. Prior to 1988, when access rates were below 15%, we would not have even let that student into university.

Given this, it would be very surprising if today’s students weren’t, on average, academically weaker than those from 25 years ago.  But it doesn’t follow that students coming out of high school are getting worse.  To compare like-to-like you need to ask the question: is the average student of the top-half of this year’s university class better-or-worse prepared than the average student of 1988?  Pose the question that way, and I think you get a different answer.

Expanding access to universities brought in a new type of student whose academic orientation was different – but the curriculum and the student support system didn’t always change to match their abilities and expectations.  These are completely understandable reasons for the persistent disconnects and the complaints about “unprepared students” – but they don’t support the thesis that high schools are doing their job any less well than in the past.

October 28

Debt, Tuition, and Inequality

A few weeks ago, I noted on Twitter that back when I was in student politics (24 years and counting) we opposed tuition hikes because we feared their negative effect on access.  Back then, fees hadn’t increased in real terms in almost two decades, so there wasn’t much evidence either way on the issue.  More than two decades on, the evidence has accumulated, and, on the whole, it turns out that what we believed back then was mostly mistaken: despite much higher tuition, more students than ever are attending PSE, and more low-income students than ever are attending PSE.

As a result, it’s increasingly ridiculous to use access arguments against tuition increases: basically you’re reduced to slogans like, “tuition reduces access!  And it’s a disgrace more people are paying it every year!”  Given this, I asked Twitter peeps what the best grounds were for opposing higher tuition and debt.  The most common answer was some variation of “tuition/debt causes inequality”, on the grounds that graduates with debt accumulate assets more slowly than students without debt.

Superficially plausible, maybe, but still wrong.  Inequality doesn’t exist “because of” borrowing.  Everybody pays equal tuition fees; debt is incurred by those who don’t have the cash up front to pay for it.  Blaming student aid for inequality is just blaming student aid for the fact that some students come from poorer families, and others from richer ones.  You don’t have to condone inequality to realize that it’s a silly proposition.

So, students who go in rich don’t accumulate debt, and therefore end up richer at the other end; students who go in poor do accumulate debt, and therefore remain poorer at the other end.  But that would be true regardless of how fees are set.  If you reduce fees for all, everybody is made better by the same amount.  Poorer families end up with less debt, richer families get to keep more cash-in-hand.  For the abolition of fees to reduce inequality, it would have to create some kind of behavioural change among richer parents that would make them less likely to pass that extra money on to their kids.  And how likely is that?

These are all pretty basic observations, yet they rarely make it into the debate about tuition and debt.  Partly, it’s because inter-generational transfers complicate the analysis, but I think it’s mostly because debt makes people squirrelly.  As Margaret Atwood and David Graeber have pointed out in recent books, the concept of debt is tied-up with an enormous amount of cultural baggage, which makes it difficult to talk about in purely economic terms.  For the next couple of days, I’ll be unpacking some of these cultural issues, and how they affect our discourse on debt.

More tomorrow.

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?

May 16

Think Big?

With all the chat recently about reducing unit costs through ever-larger instructional units (e.g. MOOCs), it occurred to me that the world already has a lot of models for this.  They just aren’t in the developed world.

University World News recently carried a very interesting article regarding a new higher education master plan in Nigeria.  One of the plan’s key elements is to construct a half-dozen “mega-universities” – each with 100-150,000 students – to soak up the rising demand for higher education.  On the one hand, this plan is self-evidently mad: large Nigerian universities are already a violent and lawless mess, plagued with cults such as the Black Axe and the Supreme Vikings (I wrote about them a couple of years ago: here); surely these new, even larger campuses will face even bigger gang problems.  On the other hand, you can sort of see where Nigeria’s coming from on this.  Thanks to some truly staggering levels of corruption, the ability of Nigeria to use public funds to meet demand for higher education is quite small – currently just $1.4 billion to cover expenses at 33 federal universities.  So the solution is simple – go big, and keep unit costs low.  Just like MOOCs.

Actually, the way access has been increased in much of the developing world is through strategies like this.  The world’s largest universities are Open Universities – Indira Gandhi in India (3.5 million), and Anadolu in Turkey (2 million).   The largest residential schools are ones with multiple constituent campuses.  The reigning world champion here is Islamic Azad University in Iran – a private school with 350 locations, 1.5 million students, and a very significant endowment of contested legality (I don’t buy the $200 billion number, but it’s substantial nonetheless).

What about single-campus institutions?  On the Indian subcontinent, there are a handful (e.g. Delhi, Pune) which boast enrolments of 400K plus, but most of those students are not residential – rather, they study at a college somewhere, and simply take the Delhi or Pune exams.  For really big schools, you need to go to places like the University of Buenos Aires (300K plus) or UNAM in Mexico City (250K plus).  The University of Cairo, at about 150K, is the biggest in Africa; it’s also generally considered the continent’s best school outside of South Africa, which may explain Nigeria’s attraction to the model.

William Gibson once said that the future is already here; it’s just unevenly distributed.  So it is.   These mega-institutions can provide some lessons about the perils and promises of uber-massification through mega-universities.  We probably shouldn’t ignore them just because they’re happening offline and in poor countries.

April 12

In Praise of Downward Mobility

One much-used trope, among those wanting to bash higher education, attacks the idea of “downward mobility”.  Typically, a journalist finds a kid from a nice middle-class family, having a hard time making-it in the labour market, and uses this as a platform for a string of Wente-isms:  “Higher education is supposed to be about upward mobility – but now graduates are downwardly mobile!  Won’t somebody please think of the children?” Etc. etc.

But upward mobility is greatly overrated.  Downward mobility is where our focus should be.  And here’s why:

Part of the problem with the notion of upward mobility is that, with respect to education, the term gets used in two distinct ways.  The first is a, “rising-tide-lifts-all-boats” interpretation, where everyone is upwardly mobile in the sense that everyone’s purchasing power is rising.  Universities and colleges, through their enriching of human capital, and their contributions to the national innovations system, are seen to be key actors in this process – though, obviously, there are many other things which also go into economic growth.  Right now, this kind of upward mobility is in short supply.

But even where there is little or no economic growth, upward mobility in a second sense – that of people changing their position within the overall social hierarchy – can still exist.  But this type of mobility is a zero-sum game.  Upward mobility can only exist to the extent that downward mobility does.

The book I discussed yesterday, for example (Paying for the Party), is full of stories about downwardly mobile middle-class kids (albeit mostly ones who don’t work very hard at their studies).  That’s sad, but what’s truly appalling is the complete lack of downward mobility among the upper-class students.  No matter how useless they are academically, mom and dad are always there to help them avoid the consequences of their inaction.

A fair society, one where social position is actually reflective of effort and ability, requires more downward mobility, not less.  We need to be finding ways to take inherited privilege away, not re-inforce it.  It’s why the rich need to pay more in tuition (and why the poor need grants to offset it).  It’s why legacy admissions and merit scholarships that don’t take social origins into account need to be fought.  It’s why all those unpaid internships in so-called “desirable” fields (mainly media and publishing) are not just illegal but are also immoral, because they tilt the playing field to the trustafarians who can afford them.

In a low-growth economy, allowing some to rise in social position means others must fall.  We in higher education have a vital role to play in this, and we shouldn’t be squeamish about it.

February 21

Stuff Happens: Rise of the Latinos

When you think about recent developments in American higher education, the negatives tend to predominate.  Cutbacks in state funding, soaring tuition fees, ballooning debt levels – it all leads you to believe that there’s been an enormous diminution of access.  But, very quietly, there’s been one incredibly good piece of news: a massive jump in Latino participation rates.

For decades, now, one of the biggest challenges in American higher education has been low participation rates among Latino students.  Latinos are, of course, quite heterogenous, even with respect to higher education.  Puerto Ricans in the Northeast have long had access rates similar to those of whites, while participation rates among Mexican and Central American Latinos in the West and Southwest have been persistently abysmal.  Other immigrant groups with low-education backgrounds have tended to see their participation rates rise by the time the second generation rolls around.  In many cases in the west, the Latino population was well into its third generation; it seemed, by-and-large, as if Latino youth simply hadn’t grasped the fact that higher education was increasingly necessary to succeed in the modern economy.

As Latino birthrates rose, and as that population became an increasing percentage of the general population, there were real worries in the Southwest that the persistently-low participation rates would lead to declining overall participation rates, and an increasingly de-skilled labour force.  A lot of policy attention – and some money as well – got lavished on this population, through groups like Excelencia in Education.  But for years, Latino access rates flatlined, and all this work seemed to be for naught.

Then suddenly, in the middle of this recession, the situation changed dramatically.   Between 2008 and 2011, the participation rate of Latinos, aged 18-24 years-old, who had completed high school, jumped from 36% to 46%, surpassing the black participation rates for the first time ever.  And no, this wasn’t a trick of the denominator – Latino high school completion rates were rising too, from 65% in 2005, to 76% in 2011.  In 2010 alone, the country saw an increase of nearly 200,000 Latino enrolments from the previous year (to put that in perspective, that’s the equivalent of the population of Quebec’s francophone universities).

Maddeningly for policy wonks who want to replicate this little miracle, it’s really not clear what prompted it.  There was no big policy shift that preceded it, for instance.  Many say “it’s the recession”, but this begs a lot of questions (e.g. why this recession, and not earlier ones?  Why isn’t it having a similar effect on black enrolments?).

Sometimes, if you work at something long enough, stuff just happens.  That’s bad news for social scientists who like to link cause and effect, but good news for America’s Latinos.

December 05

Access to Opportunity

There’s been a fair bit of talk over the past few months about the practice of articling in Ontario.  Specifically, the problem is that there are too many law school graduates for too few articling positions.  The situation has deteriorated to the point where the Law Society of Upper Canada has released a major report outlining an “alternative work experience,” in order to deal with the surplus of students who don’t get “real” articling positions.   For what it’s worth, I tend to agree with the minority report:  if implemented, this proposal will create a two-tiered system, and anyone who uses the alternative will, from the get-go, be stigmatized within the profession.

In one sense, there’s something impressive here about the way law schools have themselves escaped much of the blame; after all, the root cause of the problem was their decision to increase capacity well beyond what the articling system could support.  Now, I don’t believe in making universities alter admissions based on labour-market conditions; if people want to pay for the privilege of learning about law, there’s no reason to refuse their money.  But greater honesty with students is needed: if you know that a quarter of your graduates aren’t going to be able to get professional licensing because of an overloaded system, you should be required to explain that fact in very clear terms to incoming students.  Not to do so is ethically suspect.

But the real story here has not to do with the number of articling students, but rather with how they are actually distributed.   The Law Society report does make a passing reference to “equity” issues – the suspicion that, perhaps, non-white students aren’t getting a fair shake in articling spots.  But they never get to the heart of the matter, which is that law firms’ control of the articling process gives firms an enormous, unregulated role in controlling access to the profession.  And though no one will ever say this out loud, firms use this power to do favours for colleagues and clients.  “Oh, your son needs a spot?  We’ll see what we can do …”

We need to take a hard look at how real-world opportunities get distributed in Canada.  Justin Trudeau, a man given opportunities well beyond what his native talents would command, because of who his father was, is just the tip of the iceberg.   At the highest levels, this is a clique-y and insular place; jobs get publicized through insider networks rather than through open, merit-based competitions.  We’re not yet in New York publishing industry territory, where trustafarians have a hammerlock on all the choice positions, but in Toronto, at least, we’re closer to that situation than we’d like to admit.

Canada’s done a good job of ensuring access to education.  Pretty soon, though, we’ll need to start having serious discussions about ensuring access to opportunities.  And as Ontario’s articling situation shows, these are two different things.

October 30

Setting Tuition

Some interesting news out of Florida last week: Governor Rick Scott (or rather, a task force he created) wants to set tuition in so as to encourage enrolments in the sciences and engineering; so, basically, he’s proposing that tuition in those disciplines remain frozen for a number of years while at the same time allowing it to rise in disciplines deemed less “worthy” (arts, business, etc.).

There are some fairly obvious drawbacks to this idea: not everyone is equally skilled at these subjects and so cannot equally take advantage of the incentive, there are fairly large windfall gains to people already inclined to those disciplines, and – my favourite – if there’s really a need for those kind of skills, surely it’s the labour market’s job to adjust through rising wages, not the government’s to adjust through tweaking tuition.

Nevertheless, it raises a useful question: what’s the right way to set tuition? It basically comes down to just a few options:

Make it Free: A bad idea for a whole bunch of reasons, but it has the benefit of being consistent.
Equal Fees Across All Disciplines. Ditto. Simple to understand and implement.

Let the Market Rip: Also probably a bad idea (for first degree programs at any rate), but there’s an intellectual purity to it.

Differential Fees Based on Private Returns: Doctors pay more, social workers pay less. This is the Canadian model, to the extent institutions are allowed to get away with it (which is to say, with second-entry programs); otherwise we’re closer to the “equal fees” model.

Differential Fees Based on “Social Need” or Labour Force Planning: This is essentially the Florida proposal (Estonia has a version of it too, and some Canadian provinces use student aid to accomplish the same thing through the back door). Basic problems include working out what future needs (social or otherwise) really are and why public funds should be used to set market signals on employers’ behalf.

Differential Fees Based on Cost of Provision: This would have some of the same winners and losers as fees based on private returns, but not all. Law would be cheaper, fine arts a lot more expensive.

It would be nice if, once in a while at least, we could actually discuss these models and make conscious choices between them. It could get a bit confrontational, of course, but presumably grown-up societies can handle a bit of that. Sadly, being Canadian, we shy away from this and make tuition policy the way we always do (i.e. “whatever it cost last year, plus a couple of percentage points”). Score nil, again, for rational policy-making.

October 29

Pop Quiz

So, we all know that tuition is terrible because it’s perfectly obviousthat tuition impedes access. Right? I mean, come on. Who doesn’t know this?

Ok, try this on for size:

There have been four jurisdictions that have had major changes in tuition policy in the last fifteen years. Ontario in 1996 (a series of increases from 1996-99 of roughly 20% per annum), Manitoba in 2000 (a 10% cut in tuition with a freeze thereafter), Newfoundland and Labrador in 2000 (a 20% decrease in fees implemented over four years), and British Columbia in 2001 (a 55% increase over two years).

The graph below shows full- and part-time enrolment in those four provinces for three years before and five years after the policy change, indexed to the year of the policy change.

Figure 1 – Changes in Enrolment Near Times of Major Tuition Fee Changes in Ontario, Manitoba, Newfoundland and Labrador, and British Columbia

Amazing, huh? In all four cases, enrolment rose, and in three cases, the policy change made essentially no difference to the pre-change trend (in the fourth, it just preceded a change in the trend, but it’s pretty light).

Here’s the quiz: Match the provinces to the lines on the graph. Which provinces saw rises in tuition and which ones saw declines? Answers tomorrow in the grey box, but the first person who writes in and correctly identifies the four lines before then gets to choose the subject of a future One Thought.

In the meantime, do feel free to give this to anyone you know who’s insufferable about the evils of tuition. Especially if they’re wearing some kind of red square.

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