HESA

Higher Education Strategy Associates

Category Archives: Access

July 10

England has lost its damn mind over tuition fees

Ok, I said I wouldn’t write over the summer unless someone of importance said something titanically stupid.  Andrew Adonis, architect of former UK Prime Minister Tony Blair’s education policies crossed that line on Friday with a – yes – titanically stupid column about tuition fees, so here I am.

First, some background.  Prior to 1998, the UK had a free tuition system.  From 1998 to 2006 it had a system of varying tuition fees – £1,000 if your family made over £30,000 per year, and then a sliding scale down to zero if family income fell below £20,000.  From 2006 to 2012, it was a flat £3,000 (rising with inflation) accompanied by the (re)-introduction of means-based grants for living costs.  Loans were available to all to cover fees, meaning no one need pay a cent up-front (“free at the point of delivery” in the UK parlance), and said loans were recovered via the tax system as in Australia and New Zealand.  Required repayment rates were a modest 9% of income above the threshold, which started at £10K in 1998 and rose to £15K in 2006.  Loans not repaid within a given time frame were to be forgiven.

(If you’re trying to work out what those numbers mean in Canadian dollars, for most of the past 15 years PPP equivalent has been pretty close to £1 =C$1.70, so just multiply everything in this piece by 1.7 and you’ve got it).

Shortly after the 2006 went into effect, the bottom fell out of financial markets, and one of the worst-hit countries was the UK.  Anticipating that major reductions in public spending were going to be necessary, then-PM Gordon Brown convened a commission to look at university finances and tuition fees which, conveniently, would not report until after the 2010 election.  The resulting Browne (not the PM, another guy) Review became the basis for the post-election Tory-Liberal coalition government’s policy of i) reducing government funding to universities by over 40%, including a total elimination of per-student subsidies for teaching in the social sciences and humanities and ii) allowing universities to raise fees to up to an eye-watering £9,000 per year.

What this meant was that between loans for tuition and loans for living costs in in ludicrously-pricey London, “debt” for a three-year degree could quite easily end up at over £50,000.  But to “compensate”, loans were made more generous with the repayment threshold jumped from £15,000 to £21,000 while retaining the debt forgiveness policy.  In other words, the government increased student debt massively while simultaneously it harder to recover (see here for a comparison of repayment burdens in UK vs. other countries).

The results of this were predictable.  Though student “debts” rose enormously, these debts were in some sense purely nominal; most predictions showed that something like three-quarters of graduates would never repay the debts and hence the government would assume their balances.  What most students were signing on to was therefore not a loan but a marginal tax of 9% on income over £21,000 lasting 30 years; that is, a so-called graduate tax.  The problem was that no one knew in advance whether they were signing on for a graduate tax or a loan – that would only become apparent a decade or two into one’s working career.  Oh, and government would eventually end up picking up about half the total cost of loans.

Remarkably, this proved unpopular among students.  So much so that Labour leader Jeremy Corbyn’s pledge to abolish fees altogether – a move which while wiping away some obvious policy lunacy would also be a massive gift to the future wealthy – was widely credited with a big upswing in the youth vote which in turn was widely credited with denying Agent Teresa May a majority in last month’s election’s, despite the fact that Corbyn’s stance on Europe and Brexit is diametrically opposed to theirs.  And now that Corbyn no longer looks vulnerable to an internal coup, various Blairite Labour types are now busy re-writing the history of the last two decades to justify a 180 on a fees policy they either wrote or agreed with in spirit.

Which is where this Andrew Adonis article in last Friday’s Guardian comes in.  Adonis helped draft the ’98 and ’06 fee policy changes, and he would surely have agreed with the direction (if not the full extent) of the post-Browne Review changes.  Yet now, apparently, fees must be abolished.  Why?  Because the beautiful Labour vision, in which allowing tuition fees to rise “up to” £3,000 (up to £9,000 post-Browne) would create a functioning market in which institutions would compete like mad and multiple price-quality points would emerge was stymied by evil university vice-chancellors (i.e. Presidents) who “formed a cartel” in which all of them charged the maximum, thus stifling competition.

This is a strange and bewildering argument for two reasons.  First, in none of the three fee hikes was quality-enhancing competition a primary policy goal.  System expansion (and to a lesser extent, increasing per-student resources) was the primary goal in ’98 and ‘06; income maintenance in the face of swingeing public cutbacks was the goal in ’12.  The policies succeeded very well in both instance without damaging access for lower-income students.  Inter-institutional competition might have been a secondary goal in 2006 and a rationalization (though not a rationale) in ’12, but never the central aim.  To advocate dismantling policies because they didn’t meet some secondary goal is…bizarre.

Second, and more importantly, WHAT IN GOD’S NAME DID YOU THINK WAS GOING TO HAPPEN WHEN THE FEE CAP WAS LIFTED?  Higher education is a Veblen good, for God’s sake: in the absence of obvious measures of quality (rankings notwithstanding), consumers tend to judge the quality of education on things like cost and so cost and demand are not negatively correlated – in fact in some ways, higher costs drive higher demand (look at George Washington University’s fee policy and admission rates over the past couple of decades if you don’t believe me).  For Adonis’ competitive fantasy to have taken place, there would have had to have been institutions eager to signal that they might have lower quality by pricing significantly below the rest of the herd -and what university would want to do that?  Perhaps Adonis should name the institutions that he thought should have adopted a Walmart pricing policy.

Now to be fair, Adonis is hardly alone in his delusions about higher education competition.  England is one of those rare places where the term “neo-liberal higher education policy” actually makes some kind of sense.  There is a touching faith among policy makers there that a genuinely functioning competitive market is just one set of transparency tools around the corner.  League tables and key information sets didn’t create a functioning market in which quality is rewarded with greater pricing power?  Well, then, we’ll create the Teaching Excellence Framework (TEF), in which government will decide what quality is, and create a fee regime which will gradually create differentiated pricing by fiat.  Take that, Thorstein Veblen!

But the difference between Adonis and the TEF crowd is that the latter isn’t trying to roll back two decades of policy to ingratiate themselves with Jeremy Corbyn.  They aren’t running away from a policy which has been mostly effective just because they’ve suddenly realized students don’t like fees and debt (which of course is nonsense – they don’t pay up-front fees and for the most part they sign up to a 9% graduate tax/contribution not “debt” per se).

Does English fee policy need changing?  Of course.  The 2012 changes and subsequent amendments were as dumb as a bag of hammers.  But it’s a hell of a leap from that to “time to abolish tuition”, at least for someone with pretensions to being taken seriously in policy debates.  If that’s not something Adonis aspires to any more, that’s his business.  But the fact that this step is being considered seriously not just by Labour but by Tories as well should be worrying to everyone.  It means reasonable policy making is being thrown out the window for reasons of currying short-term favour with specific voter demographics.

In this policy field as in so many others, England appears to be losing its mind.

 

April 12

Access: A Canadian Success Story

Statscan put out a very important little paper on access to post-secondary education on Monday.  It got almost zero coverage despite conclusively putting to bed a number of myths about fees and participation, so I’m going to rectify that by explaining it to y’all in minute detail.

To understand this piece, you need to know something about a neat little Statscan tool called the Longitudinal Administrative Database (LAD).  Every time someone files an income tax form for the first time, LAD randomly selects one in five of them and follows them for their entire lifetime.  If at the time someone first files a tax return they have the same address as someone who is already in the LAD (and who is the right age to have a kid submitting a tax form for the first time), one can make a link between a parent and child.  In other words, for roughly 4% of the population, LAD has data on both the individual and the parent, which allows some intergenerational analysis.  Now, because we have tax credits for post-secondary education (PSE), tax data allows us to know who went to post-secondary education and who did not (it can’t tell us what type of institution they attended, but we know that they did attend PSE).  And with LAD’s backward link to parents, it means we can measure attendance by parental income.

Got that?  Good.  Let’s begin.

The paper starts by looking at national trends in PSE participation (i.e. university and college combined) amongst 19 year-olds since 2001, by family income quintile.  Nationally, participation rates rose by just over 20%, from 52.6% to 63.8%.  They also rose for every quintile.  Even for youth the lowest income quintile, participation is now very close to 50%.

 Figure 1: PSE enrolment rates by Income Quintile, Canada 2001-2014

PSE by Income Quintile

This positive national story about rates by income quintile is somewhat offset by a more complex set of results for participation rates by region.  In the 6 eastern provinces, participation rate rose on average by 13.6 percentage points; in the four western provinces, it rose by just 2.8 percentage points (and in Saskatchewan it actually fell slightly).  The easy answer here is that it’s about the resource boom, but if that were the case, you’d expect to see a similar pattern in Newfoundland, and a difference within the west between Manitoba and the others.  In fact, neither is true: Manitoba is slightly below the western average and Newfoundland had the country’s highest PSE participation growth rate.

 Figure 2: PSE Participation rates by region, 2002-2014

PSE by region

(actually, my favourite part of figure 2 is data showing that 19 year-old Quebecers – who mostly attend free CEGEPs, have a lower part rate than 19 year-old Ontarians who pay significant fees, albeit with benefit of a good student aid system.)

But maybe the most interesting data here is with respect to the closing of the gap between the top and bottom income quintile.  Figure 3 shows the ratio of participation rates of students from the bottom quintile (Q1) to those from the top quintile (Q5), indexed to the ratio as it existed in 2001, for Canada and selected provinces.  So a larger number means Q1 students are becoming more likely to attend PSE relative to Q5s and a smaller number means they are becoming less likely.  Nationally, the gap has narrowed by about 15%, but the interesting story is actually at the provincial level.

Figure 3: Ratio of Q1 participation rates to Q5 participation rates, Canada and selected provinces, 2001-2014

Q1 to Q5 participation rates

At the top end, what we find is that Newfoundland and Ontario are the provinces where the gap between rich and poor has narrowed the most.  Given that one of these provinces has the country’s highest tuition and the other the lowest, I think we can safely rule out tuition, on its own, as a plausible independent variable (especially as Quebec, the country’s other low-tuition province, posted no change over the period in question).  At the bottom end, we have the very puzzling case of Saskatchewan, where inequality appears to have got drastically worse over the past decade or so.  And again, though it’s tempting to reach for a resource boom explanation, nothing similar happened in Alberta so that’s not an obvious culprit.

Anyways, here’s why this work is important.  For decades, the usual suspects (the Canadian Federation of Students, the Canadian Center for Policy Alternatives) have blazed with self-righteousness about the effects of higher tuition and higher debts (debt actually hasn’t increased that much in real terms since 2000, but whatever).  But it turns out there are no such effects.  Over a decade of tuition continuing to increase slowly and average debts among those who borrow of over $25,000 and it turns out not only did participation rates increase, but participation rates of the poorest quintile rose fastest of all.

And – here’s the kicker – different provincial strategies on tuition appear to have had diddly-squat to do with it.  So the entire argument the so-called progressives make in favour of lower tuition is simply out the window.  That doesn’t mean they will change their position, of course.  They will continue to talk about the need to eliminate student debt because it is creating inequality (it’s actually the reverse, but whatever).  But of course, this make the free-tuition position even sillier.  If the problem is simply student debt, then why advocate a policy in which over half your dollars go to people who have no debt?

It’s the Ontario result in particular that matters: it proves that a high-tuition/high-aid policy is compatible with a substantial widening of access.  And that’s good news for anyone who wants smart funding policies in higher education.

March 28

The Western China Dilemma

The South China Morning Post ran an interesting piece recently on the roll-out of China’s Thirteenth Five-Year Plan for Education.  It suggested that in the central and western regions of the country – that is, the poorer, non-coastal bits – the bulk of the task of educational development , including higher education, is going to fall on the private sector.  And yes, this is communist China we’re talking about.

Now at one level this might look like a smart move.  Across most of East Asia in places like Japan, Korea and Taiwan, the private sector provides the majority of spaces in higher education, so why not China?  And besides, parents are prepared to save vastly more for education in that part of the world and so cost is less of an object.  With the economy slowing, the Chinese government is becoming warier about spending money (at least on non-infrastructure projects), so a shift to a model where educational expansion is driven more by the private sector makes a certain amount of sense, right?

Well, I’m not so sure.  I suspect this is just storing up problems for later.

Educational opportunity is distributed very unevenly in China.  It’s not just that participation rates are much higher in the rich eastern provinces than in the poorer central and Western ones.  It’s also that the most prestigious institutions are concentrated in a relatively few areas, particularly Beijing and Shanghai.  This wouldn’t be a problem if these institutions had control over their own student intake and could accommodate the best and brightest from across the country, but they don’t. Instead, each is required to guarantee that a large majority of its places goes to students from its own region.

As everyone knows, in Asia there are two types of private institutions.  A very few of them – those with histories going back a century or so – are pretty good.  Think Keio and Waseda Universities in Tokyo, or Yonsei and Korea Universities in Seoul.  But the majority are pretty weak academically.  And so, what Beijing is offering to the poorer provinces is a lot of lower-quality education; but absent any big new investments in the public system, they aren’t going to get new access to prestige education, which is what the emerging middle class always wants.

Beijing has tried to deal with this problem by making some provinces – notably Hubei and Jiangsu – give up some of their reserved spots at top universities to allow students from these poorer areas.  As Mike Gow, author of the excellent Daxue blog, noted last year these two provinces were made to give up 26% and 18% of their spots this past fall, mostly for the benefit of Yunnan, Tibet and Guizhou provinces.

This, needless to say, has seriously ticked off parents in Hubei and Jiangsu.  In fact, some observers in Hong Kong suggest that this is leading to a new political consciousness among those  in the regions’ middle classes.  Indeed, one suspects the Party knew that this might be the case when it selected Hubei and Jiangsu as the test sites for these policies rather than the more politically sensitive Beijing and Shanghai regions.

The only way to solve this problem in the long run is to start gradually building up some flagship universities in the underdeveloped west.  But this five-year plan is pushing the party towards a quick-and- dirty approach to education in those areas, not a higher-cost quality approach.  Eventually, that’s going to lead to serious political problems either in the interior regions (if mobility continues to be restricted) or in eastern provinces (if mobility is allowed).

Greater affluence leads to greater competition for status goods like education.  To the extent the Communist Party wishes to maintain popular acquiescence to its rule, it has to satisfy those demands.  As growth slows, that task is getting harder.  Keep watching this space.

March 14

The Free Tuition Impulse

A few weeks ago I presented yet more evidence about why free tuition was mostly a subsidy for the rich and was unlikely, on its own, to do very much with respect to equalizing access (scroll through here and here if you really want to read me on this subject, though I imagine most of you are pretty familiar with my spiel by now). Someone asked me: “why don’t people like the Canadian Center for Policy Alternatives (CCPA), the Canadian Association of University Teachers (CAUT) and the Canadian Federation of Students (CFS) get this?  Surely they can read the evidence, why would they persist in touting a solution which is manifestly regressive”?

There are two possible answers to this question.  One is that in fact they have not read the evidence.  It exists, and they know it exists, but just haven’t read it.  As long as they don’t read the work which falsifies their notions, they can continue to hold these notions. To  paraphrase Upton Sinclair “It is difficult to get a man to read something, when his salary depends upon his not reading it”.

I actually got confirmation of this the other day on Twitter.  I was trying to get CCPA’s chief economist David MacDonald to explain why CCPA holds diametrically opposed positions on universal electricity subsidies (bad because they go disproportionately to the rich) and PSE subsidies (awesome, because they benefit the poor – which actually they don’t always, but that’s their story and they are sticking to it).  Basically, his two lines of defense were “it’s a public good” and “it doesn’t matter if most benefits go to rich because if we make education cheaper more poor students will go”.  The first, even if you assume he meant “there are positive externalities to higher education spending” (which is true) rather than “it fits economists’ description of a public good” (utterly false), is not a 100% sensible rationale as it arguably also applies to electricity to some degree (i.e. “there are positive externalities to people not freezing to death in their homes”).  But the second is ridiculous.  We know for a fact that tuition levels have almost nothing to do with access rates in part because targeted student aid actually works.  So I pushed him on it.  “Have you really read nothing about access problems in zero-tuition jurisdictions?  I asked.  Have you never looked at the rather substantive literature on finances and access”?  No reply.  Which, I think, tells you what you need to know.  People like David MacDonald and the CCPA simply do not want to know.  But that’s only half an answer: why don’t they want to know?  If they know that free tuition is ineffective as a remedy and regressive in distributional outcomes, why support it?  What other agenda is at play?

Well, a few years ago, when I was at a small event on Chile looking at the issue of tuition, I finally came to understand this problem.  A colleague and I were asking our Chilean counterparts: why do you want to make tuition free?  You must know it will make very little difference in access to higher education.  To which one of our counterparts replied:  the point is to get rid of the market.  The market must not decide in higher education.”

And so it is in Canada, I think.  The anti-tuition people are not fundamentally pro-access (though that is how they rationalize their position), so much as they are pro-state.  I suspect it’s partly due to a left-ideological stance which generally favours greater state involvement across the economy, but also partly to a naïve view about what would happen inside universities if the need to satisfy the market ever disappeared.  Such as: that public money would magically replace private money and continue to grow at a pace vastly outstripping inflation forever after.  Such as: nasty private sector Board member would be replaced by bureaucrats or more sympathetic public appointments or – better yet – make academics a majority on governing boards.   And magically, contrary to every bit of evidence from continental Europe, government running 100% publicly-funded universities would be less intrusive and meddling in institutional affairs than they currently are.

Once you realize that the free tuition argument is really a government vs. market argument and not a “how do we best equalize opportunities argument”, it becomes perfectly clear why evidence on the efficacy of tuition in promoting access doesn’t faze the usual suspects.  They don’t actually care about access.  They care about resisting the market.   The access stuff is just sheep’s clothing.

March 02

Bravo, New Brunswick

Readers may remember that about this time last year, I was giving the Government of New Brunswick a bit of stick for a botched student aid roll-out. Today I am pleased to give credit where it is due, and congratulate the folks in Fredericton for fixing the problem and developing a much better student aid system.

Let’s go back 12 months to pick up the story.  In February 2016, the Ontario government had come up with a fabulous new system which basically made a promise of grants equal to or greater than average tuition for students from low to mid-family incomes.  At family incomes above that, students received a declining amount of money out to about $110,000 at which point the grant flattens to a little under $2,000 (a remnant of the government’s ludicrous “30% tuition rebate” from 2011) and then falls to zero a little over $160,000.  With a bit of clumsiness this eventually, sort of, got branded as “free tuition for low- and middle-income students, which it isn’t, quite, but close enough for advertising.  Cue what is seen to be a major policy success.

It was such a success that New Brunswick decided to copy it later last spring.  Like Ontario, they built on the change to Canada Student Grants and eliminated some of their own tax credits (including the egregiously wasteful graduate tax rebate) to fund a “Tuition Access Bursary”, which guaranteed a grant equal to tuition (up to a maximum of $10,000, which was more generous than Ontario) for students from families making under $60,000. Which is great, right?  Well, yes, except the problem is, there was no phase-out for the grant.  At $59,999 in family income, there you were raking in $6500 or so in grants and at $60,001 you got $1200 in grants (the federal middle-income grant) and that’s not great social policy.  Making it worse was the fact that families in that $60K to $70K would also be losing a lot of money in tax credits that both the federal and provincial governments were ending in order to pay for this new benefit; my back-of-the envelope calculation was that in this range, parents were going to be about $1,200 worse off as a result of the change.

In any case, because I and others pointed out this flaw, the government after a brief period of defensive blustering decided it was best to go back to the drawing board and revisit the formula.  They did so and last week came up with a new “Tuition Relief for the Middle Class”, which basically involved taking a sliding declining scale of grants for families earning between $60-100,000 onto the existing Tuition Access Bursary (which has been renamed the “Free Tuition Program”).  Arguably, the New Brunswick program is now somewhat better than the Ontario program because 1) it’s not just “grants up to “average” tuition”, a caveat which I suspect is going to leave a lot of people slightly cheesed off when the program starts and 2) It still manages not to subsidize people up to that absurdly high $160K + threshold that Ontario insists on maintaining.  Ontario gets points for making its aid portable, though – New Brunswick’s program is only available to students who study in-province, which I think is a shame.

The announcement – which you know, hey guys, it’s a good news story! – was marred somewhat by some media sniping about how the number of beneficiaries is about 30% short of what was estimated last year.  To me this is neither here nor there: government cost estimates on year 1 of a new program are often a matter of throwing numbers at a dartboard.  The good news is that there is still money to either raise the entry threshold for the Free Tuition Program or (better still) expand the debt relief program or top up the amount of money available to high-need mature students and parents through the New Brunswick Bursary Program.

Now, all we need for this to be perfect is for New Brunswick to come up with a smart, credible monitoring program to examine the effects of these changes on participation over the next few years.

(New Brunswick folk: that’s on the way, right guys?  Right?  Well, you know where to find me if you need a hand…)

Anyways, as I say, credit where it is due.  Well done, New Brunswick.

February 13

When Should the Education System Say “No”?

There’s an argument going on in the UK right now about re-introducing grammar schools.  Until the 1960s, grammar schools were a selective tier of the secondary system.  Everyone took exams at the age of eleven, and the most academically able were selected to go to these schools, the purpose of which (everyone understood) was to enable people to go to university.  Those who did not pass were essentially out of luck as far as further education went: their choices were circumscribed by the time they were eleven. Germany and some other central European countries still operate on this basis.  For some reason, the current government thinks it’s a good idea to go back to that system.

Like many others, I think it’s wrong for the education system to filter people at an early age.  Among other things, streaming – or any rationing by ability, really – is inevitably classist.  Yes, some poor kids will get through and get “a good education” and by some people’s lights this makes selection an “engine of mobility”.  But far more are consigned to the loser bin at an early age.  And that’s not good: you can’t ask the education system to kill people’s dreams off at such an early age.

But here’s the question: if not then, when?  Should the education ever say no to someone’s dreams?

We used to say “no” to people a lot.  We used to fail out a lot of kids from high school and that was OK, because hey, we had to have standards (I note with interest that Ken Coates and Bill Morrison, in their new book Dream Factories, have taken to calling near-universal high school completion rates an obvious example of “dumbing down”. Nice.) We used to restrict entry to university a lot.  Heck, 30 years ago we had fewer than half the number of students we had today, and the median student today would have had trouble accessing university in the late 1980s.  In some parts of Europe, even though they have so-called “open” admissions systems (everyone who passes the exit examination of the top-secondary school stream, such as the baccalaureat or the abitur) it remains policy to fail out large numbers of students after first year who “can’t handle the work” – that is, say yes, then say no.

To a considerable degree, widening access is about learning how not to say no to people.  But to some extent this just puts off the day of reckoning, because after education comes the labour market and the labour market is under no obligation to say “yes” to anyone.  There are more people who want to be professors than there are tenure-track jobs, more people wanting to be lawyers (crazy but true) than there are positions at law firms, more teacher-wannabes than teaching positions.  “No” comes, eventually, at least for some.

Now some people will argue that because the labour market says “no”, the education system also needs to say no – especially when it comes to professional schools. To these people, the expansion of law school (or Master’s degrees in education, take your pick) is a travesty. All those people paying for an education which doesn’t necessarily bring in a huge rate of return?  What we need to do is reduce the number of incoming students so as to raise average rates of return!  (There is a similar argument with doctoral students: there are never going to be enough academic jobs for these students, so why let them in in the first place)?

I get that argument, but to me it doesn’t wash any more than early selection washes.  Yes, there are more wannabe lawyers and teachers than available positions.  But why should anyone but law firms and schools be the ones who say no?  Why should higher education institutions be the gate-keepers?  Until you’ve actually given people a chance to succeed at a professional school, how would you know who the best lawyers/teachers will be anyway?  And how, in practice, will institutional gate keeping not simply re-introduce the class-based outcomes?

The only legitimate argument in favour of limiting enrolment, it seems to me, is if public money is at stake.  At some point, a government which feels it is not getting a good return on its investment because graduates are not getting jobs would be within its right to stop funding new places.  But if students are spending their own money, as they do for law school, why should anyone want to stop students from spending their own money to pursue their desired career?

Yes, consumers need to be protected from mis-selling, obviously; institutions shouldn’t be allowed to mislead people about the odds of someone eventually saying “no”.   But other than that, the moral case for institutions as gate keepers isn’t much better than that for bringing back grammar schools.

October 05

A Brief History of Exams

Written exams are such a major part of our schools and universities that we forget sometimes that they are not actually native to the western system of education.  How did they become so ubiquitous?  Well here’s the story:

Originally, the Western tradition eschewed exams.  Universities offered places based on recommendations.  If one could impress one’s teachers for a few years, one might be invited to audition for right to be granted a degree. In medieval universities, for instance, one obtained a degree once one was capable of giving lectures or credibly argue a particular position in a debate format (the disputatio).  This was more or less the case right through until the 17th century.  This was completely different from how it was done in China.  There, ferociously difficult examinations for entry into the Imperial Civil Service had been the norm since the first century AD (give or take a couple of centuries of inter-dynastic interregnums due to societal collapse, civil wars, etc).  To help students through these exams, “academies” were created, which, with a bit of squinting, can be seen as forerunners of today’s universities (for more on early Chinese higher education see here).

In the late 16th century, a Jesuit priest named Matteo Ricci was sent to China and eventually rose to a very senior position within the order.  He was very impressed by the competitive and meritocratic nature of the Chinese examination system, and described it in glowing terms to his superiors in Rome.  Being a pedagogically-minded order, the Jesuits themselves adopted written examinations in order to make their own system tougher and more competitive.  In the 18th century, absolutist reformers trying to create meritocratic civil services (as opposed to ones run by aristocratic place-holders) decided to put the Jesuits’ “Chinese” system to work.  Starting in Prussia, then spreading around Europe over the following century, bureaucrats now had to pass examinations.  As more and more people tried to apply to the civil service, the universities – which were mainly prep schools for the civil service – became more crowded and gradually introduced their own entrance examinations as well.  The first of these was the German Abitur, which is still the qualification required to enter university.

The question of who set these exams – the education ministries in charge of secondary education?  the universities themselves? – was answered different ways in different countries.  In the United States, the Ivies maintained their own exams well into the twentieth century.  To keep out the riff-raff they would do things like test for ability in Greek – a subject not taught at public schools.  As universities began to expand the range of their intakes, they started to see problems with exams based on curricula and started looking for something that would measure potential regardless of which state or school they came from.  This led them to consider psychometric examinations instead, and hence the SAT was born.

Psychometric testing never really caught on outside the US (thought Sweden uses a variant of it).  Generally speaking, the dominant form of testing around the world remains a high-stakes test at the end of secondary school: the gaokao in China, the Korean suneung and the Japanese center are the most famous of these, but most of Europe and Africa operate on some variant of this (albeit without causing the same level of commotion and stress because European university systems are less hierarchically stratified than East Asian ones).  In many of the post-Soviet countries, university entrance exams were a source of lucre.  A prestige institution could set its own exam, and rake off money from students either through preparatory classes or by requesting bribes to pass.  The establishment of national university entrance exams in these countries were thus as much as an anti-graft measure as a pro-merit measure.

Many parts of the world – but particularly Asian countries – are seeing the downsides of basing so much on a single set of exams, and are trying in various ways to try to de-emphasize testing as a means of distinguishing between students, both because they are seen as overly stressful to youth and because the results have been time and again to reinforce class privilege.  The problem with the latter is that no one has yet come up with alternative measures of academic prowess or potential which are significantly less correlated with privilege; and exam results, whatever their faults, do provide transparency in results, and hence a greater appearance of fairness.

In short: there’s lots wrong with high-stakes exams, but they aren’t going anywhere soon.

September 09

Some Intriguing New UK Access Data

The UK’s Higher Education Statistics Agency (also known in these parts as “the other HESA”) put out an interesting report recently on participation in higher education in England (available here).  England is of course of great interest to access researchers everywhere because its massive tuition hike in 2012 is a major natural policy experiment: if there is no clear evidence of changes in access after a tuition hike of that magnitude then we can be more confident that tuition hikes elsewhere won’t have much of an effect either (assuming students are all given loans to cover the fees as they are in England).  I’ve written about previously about some of the evidence that has come out to date back here, here, here and here: mostly the evidence has shown little to no effect on low-income students making a direct transition to university, but some effects on older students.

The new (other) HESA report is interesting.  You may have seen the Guardian headline on this, which was that since the change in fees, the percentage of state school students who proceeded to higher education by the age of 19 fell from 66% to 62% in the years either side of the policy change (note: regular state-school students make up a little over 83% of those enrolled in A-level or equivalent courses, with the rest split about equally between selective state schools and independent schools).  On the face of it, that’s a pretty bad result for those concerned about access.

But there are three other little nuggets in the report which the Guardian chose to ignore.  The first was that if you looked simply at those who took A-levels, the drop was much smaller (from 74% to 72%).  Thus the biggest drop was from those taking what are known as “A-level equivalents” (basically, applied A-levels).  The second is that among the very poorest students – that is, those who receive free school meals, essentially all of whom are in the main state sector – enrolment rates essentially didn’t move at all.  They were 21% in 2011/12, 23% in 2012/13 and 22% in 2013/14. All of this is a long way up from 13% observed in 2005, the year before students from families with incomes below £20,000 had to start paying tuition.  Third and last, the progression rate of state school students to the most selective institutions didn’t change at all, either.

So what this means is that the decline was most concentrated not on the poor in state schools but in the middle-class, and landed more on students with “alternative” credentials.  That doesn’t make a loss of access any more acceptable, but it does put a crimp in the theory that the drop was *caused* by higher tuition fees.  If “affordability” (or perceived affordability) were the issue, why would it hit middle-income students more than lower-income students?  If affordability were the issue, why would it be differentially affecting those taking alternative credentials?  There some deeper questions to answer here.

 

July 25

The low-wage graduate problem

The week before last, the Canadian Centre for the Study of Living Standards (CSLS) put out a report (available hereon trends on low-paid employment  in Canada from 1997 to 2014 (meaning full-time jobs occupied by 20-64 year olds where the hourly earnings are less than 66% of the national median).  It’s an interesting and not particularly sensationalist report based on Labour Force Survey public-use microdata; however one little factoid has sent many people into a tizzy.  Apparently, the percentage of people with Master’s or PhDs who are in low-wage jobs (where the hourly earnings are less than two-thirds of the national median) had jumped from 7.7% to 12.4%.  This has led to a lot of commentary about over-education, yadda yadda, from the Globe and Mail, the CBC, and so on.

This freak-out is a bit overdone. I won’t argue that the study is good news, but I think there are some things going on underneath the numbers which aren’t given enough of an airing in the media.

First of all, as CSLS explains in great detail, the two important findings are that the incidence of low-wage work in the economy has stayed more or less stable, and second, Canadians on the whole are a lot more educated than they used to be.  This leads to a compositional paradox: even though all seven levels of education saw increases in the incidence of low-wages (see Figure below), overall the fraction of Canadians with low wage jobs dropped ever-so-slightly from 27.9% in 1997 to 27.6% in 2014.

ottsyd 20160721-1

Now you have to be careful about interpretation here, particularly with respect to charges of “over-education”.  Yes, the proportion of grads in low-wage jobs is going up.  But the average wage income of university graduates is actually increasing: between 1995 and 2010, it rose by 6% after inflation.  And that’s while the number of people in the labour force with a university degree increased by 94%, and the proportion of the labour force with a university degree jumped from 19.3% to 28.7% (I would break out data on Masters/PhD specifically if I could, but public Statscan data does not separate Bachelors from higher degrees). 

What that tells us is that the economy is creating a lot more high-paying jobs which are being filled by an ever-expanding number of graduates.  But at the same time, more graduates are in low-wage jobs, which suggests that while averages are increasing, so is variance around the mean.

Another factor at work here is immigration.  Since the mid-1990s, the number of immigrants over 25 with university degrees has increased from 815,000 (23.2% of all degree holders) to 1.87 million (33% of all degree holders).  It’s not clear how many of those have graduate degrees (thanks Statscan!) but I think it’s reasonable to assume, given the way our immigration points system works, that the proportion of immigrants with advanced degrees is even higher.

The problem is that immigrants with degrees – particularly more recent immigrants – have a really hard time in the Canadian labour market, particularly at the start (see a great Statscan paper on this here).  To some extent this is rational because the degrees and the skills they confer are genuinely not compatible (see my earlier post on this), and to some extent it reflects various forms of discrimination, but that’s not the point here.  There are over one million new immigrants with degrees over the past fifteen or so years, many of them from overseas institutions.  The CSLS-inspired freak-out is about the fact that over the past 17 years the number of degree-holders has increased by 450,000 (of which 130,000 are at the Master’s/PhD level).  Simple logic suggests that most of the problem people are seeing in the CSLS data is more about our inability to integrate educated immigrants than it is about declining returns to education among domestic students.  I know the data CSLS uses doesn’t allow them to look at the results by where a degree was earned, but I’d bet serious money this is the crux of the problem.

So, you know, chill everybody.  Canadian graduates still do OK in the end.  And remember that comparisons of educational outcomes over time that don’t control for immigration need to be taken with a grain of salt.

June 14

Affordability of Higher Education in Canada and the United States

About a decade ago, my colleague Kim Steele and I did a comparison of the affordability of public higher education in all ten Canadian provinces and fifty US states. In general, Canadian provinces did not do well; yes, Canada has lower costs for students, but its student aid system is less generous and – this is worth remembering – Americans are wealthier than we are. And so, once you adjust costs and net costs for family purchasing power, it turned out there was a substantial affordability gap in Americans’ favour.However, things have changed a lot in the intervening decade. Tuition has increased at a faster pace in the US than in Canada, and while both countries have made improvements in student aid, the gap in median household incomes has narrowed substantially due to the severity of the recession in the US. And so my colleague Jacqueline Lambert and I thought it would be fun to re-run some of those comparisons. We’ll be publishing our full 60-jurisdiction report in the fall but it seemed like it would be fun to give you some top-level comparisons right now.

First, a brief methodological note on this comparison. We take six different measures of cost (see table below) and divide each of them by each nation’s median household income. We do this because affordability by definition is a function of a household’s ability to pay – simply comparing costs, which on their own are meaningless.

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Most of this data is easily available from various official sources (email me if you’re curious).  The exception is living costs because while Canada occasionally produces student income/expenditure surveys (we at HESA have done a few of these), Americans simply don’t.  Not on a national basis, anyways.  When you hear American student aid analysts talk about “cost of attendance”, what they’re referring to are institutional estimates of costs to live on- or off-campus which form the basis of student aid need assessment.  Sometimes these estimates make sense, sometimes they are batshit crazy (do read the New America Foundation’s recent series on this issue, available here. Regardless, they’re the only data we have.

In our 2006 paper, we used US figures for on-campus housing and in Canada we used results from an Ekos survey for living expenses.  Here’s how affordability stacked up then:

Figure 1: Canada vs. US Cost Comparisons, 2002-03 
fig1

American tuition and living costs were both 15-20% higher than Canadian ones, but once adjusted for household income they were roughly the same – education costs in both countries came out to 11% of median household income and total costs were 23-24%. Where the Americans had a real advantage was in loans: the ubiquity of loans meant that Americans were much less credit-constrained than Canadians and had to dig into their pockets much less in the short term. Result: on the most inclusive measures of affordability, Americans looked better than we did in 2002-03.

Now on to a more recent comparison, after a recession and many policy changes on both sides of the border. We’ve refined the US living cost data by using a weighted average of on-campus and off-campus housing costs, and to make the Canadian data more comparable we’ve chosen to use CSLP living cost estimates for Canada rather than actual survey data (nationally, the two are within 5% of one another, so it’s not a big change in practice). Here’s how the data looks for 2013-14:

Figure 2: Canada vs. US Cost Comparisons, 2013-14

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What happened? How does Canada now look so much more affordable? Well, not much on the income side; in fact US median household income grew slightly faster on the American side. But tuition grew a lot faster in the US than it did in Canada. So, interestingly, did American students’ living costs; in 2003 they were 18% higher than in Canada; now they are 86% higher. To some extent, the increase in US living costs is due to our methodological change of including off-campus housing costs. That said, US cost of attendance is truly rising quickly for reasons which are not entirely clear.

Some policy measures have kicked in to offset these rises. Grant dollars per student in the US have risen by over 170% in the past decade, and loans per student have risen 64%. Both these figures far outstrip the equivalent figures in Canada. But it’s not enough to close the widening cost gap. On the most inclusive measure of affordability – out-of-pocket costs after tax expenditures – Canadian families must spend 11.9% of median household income (compared to 13.1% a decade ago) while Americans must spend 20.8%, up from just 9.7% a decade ago.

Plenty of food for thought – on both sides of the border.

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