HESA

Higher Education Strategy Associates

Tag Archives: Comparative

February 15

How to Fund (2)

As I noted yesterday, in Canada we have some kind of phobia about output-based funding.  In the 1990s, Ontario and Alberta introduced, and then later killed, key performance indicators with funding attached.  Quebec used to pay some money out to institutions based on the number of degrees awarded, not just students enrolled, but they killed that a few years ago too (I’m sure the rumour that it did so because McGill did particularly well on that metric is totally unfounded).

Now, there is no doubt that the history of performance indicators in Canada hasn’t been great.  Those Ontario performance indicators from the 1990s?  They were cockamamie and deserved to die (student loan defaults as a performance measure?  Really?  When defaults are more obviously correlated with program of study, geographic location, and the business cycle?).  But even sensible measures like student completion rates get criticized by the usual suspects (hi OCUFA!), and so governments who even think about basing funding on outputs rather than inputs have to steel themselves to being accused of making institutions “compete” for funding, of creating “winner and losers,” of “neoliberalism,” yadda yadda.  You know the story.

Yet output based funding is not some kind of extremist idea.  Leave aside the nasty United States, where two-thirds of states have some kind of performance-based funding, all of which one way or another are based on student progress and completion.  Let’s look to wonderful, humane Europe, home to all ideas that are progressive and inclusive in higher education.  How do they deal with output-based funding formulae?

Let’s start with Denmark and England, both of which essentially offer 100% of their teaching-related funding on an output basis (these are both countries where institutions are funded separately for research and teaching), because although their formulas are essentially enrolment-weighted ones like Ontario’s and Quebec’s, they only fund courses which students successfully finish.  (Denmark also has another slice of teaching funding which is based on “on-time” student completion).  Students don’t finish, the institution doesn’t get paid.  Period.

Roughly two-thirds of higher education funding in Finland – yes, vicious neo-liberal Finland – is output-based.  A little more than half of that comes from the student side, based on credit progression, degree completions and the number of employed graduates.  On the research side, output-based funding is based on number of doctorates awarded, publications, and the outcome of research competitions.  It’s a similar situation in the Netherlands where over half the teaching component of funding comes from the number of undergraduate and master’s degrees awarded, while well over half the research funding comes from doctorates awarded plus various metrics of research performance.

All throughout Europe we see similar stories, though few have quite as much funding at risk on performance measures as the four above.  Norway and Italy both have performance-based components (mostly based on degree completions) of their systems which involve 15-25% of total funding.  France provides five percent of its institutional funding based on the number of master’s and bachelor’s degree completions (the latter adjusted in a very sensible way for the quality of the institutions’ students’ baccalaureat results).  Think about that for a moment.  This is France, for God’s sake, a country whose public service laughs at the concept of value for money and in which a major-party Presidential candidate can advocate for 32-hour week and not be treated as an absolute loon.  Yet they think some output-oriented funding is just fine.

I could go on: all German Länder have at least some performance-based funding both for student completions and research output, though the structure of these incentives varies significantly.  The Czech Republic, Slovenia, and Flemish Belgium also all have performance-based systems (mainly for student completions).  New Zealand provides 5% of total institutional funding based on a variety of success/completion measures (the exact measures vary a bit, properly, depending on the type of institution).  Finally, Austria and Estonia have mission-based funding systems, but in both cases measures looking at research performance and student completions indicators which form part of their reporting systems.

You get the picture.  Output-based funding is common.  It’s not revolutionary.  It’s been used in many countries without much fuss.  Have there been transition teething troubles?  Yes there have (particularly in Estonia); but with a little foresight and planning those can be mitigated.

And why have they all adopted this kind of funding?  Because funding is an essential tool in steering the system.    Governments can use output based funding to purchase institution’ attention and get them to focus on key outcomes.  If, on the other hand, they simply hand over money based on the number of students institutions enroll, then what gets incentivized are larger institutions, not better institutions.

Ontario, with its recent formula review, had a golden opportunity to introduce some of these principles to Canada.  It failed to so.  I’ll explain why tomorrow.

February 10

Four Megatrends in International Higher Education – Demographics

Last week I noted that one of the big factors in international education was the big increase in enrolments around the world, particularly in developing countries.  Part of that big increase had to do with a significant increase in the number of youth around the world who were of “normal” age for higher education – that is, between about 20 and 24.  Between 2000 and 2010, that age-cohort grew by almost 20%, from a little over 500 million to a little over 600 million.  Nearly all (95%) of that growth came from Asia and Africa.

Figure 1: Number of People Aged 20-24, by Continent, 2000 to 2030

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But as figure 1 shows, 2010 was a peak year for the 20-24 age group.  Over the course of the 2010s, numbers globally will decline by 10%, and not reach 2010 levels again until 2030 (intriguingly, this is almost exactly true for Canada, as well).  A problem for international higher education?  Well, maybe.  Demography isn’t destiny.  But to get a bit more insight, let’s look at what’s happening to the demographics within each region.

In Europe, the numbers for the 20-24 year old group are falling drastically.  In Western Europe, the decline is relatively moderate and reflects a gradual drop in the birth rate which has been going on for about fifty years.  In Eastern Europe, the fall is more precipitous, a reflection the fall in the birth rate during the occasionally catastrophic years of the switch from socialism to capitalism.  In Russia, youth numbers are set to drop by – ready for this? – fifty per cent (or six million people) between 2010 and 2020.

Figure 2: Number of People Aged 20-24, Selected Countries in Europe, 2000 to 2030

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In East Asia, the story of the first ten years of the century was the huge increase in youth numbers in China (yes, the one-child rule was in effect, but the previous generation was so large that raw numbers continued to increase anyway).  But once we reach 2010, the process reverses itself.  China’s youth cohort drops by 40% between 2010 and 2020. Similarly, Vietnam’s drops by 20%, as does Japan’s (which additionally lost another 20% between 2000 and 2010).  Of the countries in the region, only Indonesia is still seeing some gentle growth.

Figure 3:  Number of People Aged 20-24, Selected Countries in East Asia, 2000 to 2030

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The story changes as we head west in Asia.  India will continue to see rises – albeit small ones – in the number of youth through to 2030 at least.  Pakistan will see an increase of 50%, albeit from a much smaller base.  Numbers in Bangladesh will rise fractionally, while those in Turkey will stay constant.  Iran, however, is heading in the other direction; there, because of the precipitous fall in the birth rate in the 1990s, youth numbers will fall by 40% between 2010 and 2020 (i.e. on a similar scale to China) before recovering slightly by 2030.

Figure 4: Number of People Aged 20-24, Selected Countries in Southern & Western Asia, 2000 to 2030

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I’m going to skip the Americas, because numbers there stay pretty constant over the whole period and the graphs therefore look pretty boring (just a bunch of lines as flat as a Keanu Reeves performance).  But here comes Africa, where youth numbers are expanding relentlessly.

Figure 5: Number of People Aged 20-24, Selected Countries in Africa, 2000 to 2030

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The six countries portrayed here – Nigeria, Ethiopia, Egypt, Kenya, South Africa and Tanzania – make up just 40% of the continent’s population, but they are quite representative of the continent as a whole.  By 2030, there will be more 20-24 year-olds in Nigeria than there are in North America, and growth in numbers in Tanzania, Kenya and Ethiopia (as well as Nigeria) between 2015 and 2030 will exceed 50%.  The outliers here are South Africa, where youth cohort numbers are going to stay more or less constant, and Egypt, where the numbers drop in the 2010s before starting to grow again in the 2020s.

So what can we learn from all this?  Well, what it means is that overall, youth numbers are shifting from richer and middle-income countries to poorer ones.  While many developed countries like the US, France, Canada and the UK are more or less holding their numbers constant (or, more often, showing a dip in the 2010s and a subsequent rise in the 2020s), we are seeing big, permanent drops in numbers in places like Russia, Iran, China and Vietnam and big increases in places like Nigeria, Pakistan and Kenya.

Ceteris paribus, this is bad news for international student flows because on average, the potential client base is going to be coming from poorer countries.  But keep in mind two things: first, international education is by and large the preserve of the top five percent of the income strata anyway, so national average income may not be that big a deal.  Second, while the size of the base populations may be changing, what really matters for total numbers is the fraction of the total population which chooses to study abroad.  China is a good example here: as our data shows, the youth population is falling drastically but international student numbers are up because an increasing proportion of students are choosing to study abroad.

Bottom line: the world youth population is now more or less stable, after decades of growth.  For international education to continue to grow means finding ways to convince people further down the income strata that study abroad is a good investment.

November 30

Comparing International Student Loan Repayment Plans

People talk a lot about student debt and the burden it places on recent graduates.  Not surprisingly, different countries come to different policy conclusions about how this burden should be dealt with.  Today’s column examines how various countries choose to deal with this issue.

What I am going to do today is compare expected loan repayments under five different student loan regimes: Canada, the US, the UK, Australian and New Zealand.  This obviously does not fully examine the issue of loan “burdens” – to do that properly would require information on average debt and average post-graduate income which I suppose I could find but can’t be bothered to do just at the moment.  But it’s still a revealing exercise.

First, a brief description of the loan repayment schemes.  Canada and the Unites States have very similar systems, in that they are technically “mortgage-style” loan systems (you pay them down as you would a home mortgage, in equal installments), but which have “income-sensitive” features to help lower-income borrowers.  In Canada, that means the Repayment Assistance Program (RAP), which requires no repayment if income is below $25,000 and restricts payments to a maximum of 20% of income over that threshold.  In the US it is called PAYE (Pay-As-You-Earn) or REPAYE (don’t ask), which requires no payment if “adjusted gross income” (meaning income minus certain allowable deductions, roughly equivalent to line 260 on a Canadian tax form,) is less than 150% of the poverty line, which in practice means US$17,820 for a single individual.  Repayments are restricted to 10% of income above that level.  In both countries what that means is that repayment is directly tied to income until the point where payments rise above what they would be on a mortgage-style arrangement, at which point borrowers switch into the mortgage system.

The other three systems are income-contingent, meaning repayment is geared exclusively to income regardless of the size of the outstanding debt.  In the UK, the repayment threshold is £21,000 and borrowers repay 9% of their income above this level.  In New Zealand, the repayment threshold is NZ$19,084, and borrowers repay 12% of their income above this level.  Australia is more complicated: borrowers pay nothing until income passes $54,869, but then one pays an escalating percentage, starting at 4%, of one’s entire income (not just the bit above the threshold) as income rises above this.  For those interested, the contributions table is here.

For this comparison, I assume that the Canadian and American subjects each have outstanding loans of $25,000 (in local currency) which are eligible for income-based repayment. As noted above, size of debt is irrelevant for the other three examples.  I have converted everything into Canadian dollars at purchasing power parity using the July 2016 Big Mac Index (C$1=NZ$1=A$.958=$US.84=£.496).

With all that out of the way, Figure 1 shows how much student loan borrowers are expected to repay per month under each of the five systems.

 Figure 1: Required Monthly Repayment on Student Loans, by Income Level, in C$ at PPP, Selected Countries

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The essential natures of each country’s program can be seen in this graph.  Canada and the US start out as upwardly-sloping lines but then plateau, which reflects their common nature as a blend of income-based and mortgage-style lending.  Payments in the US system rise more gently because of the different repayment maximum (10% vs 20%) and plateau at a lower level because of lower interest rates.  The New Zealand and UK patterns are simple upwardly-sloping curves.  Australia’s curve is notable not just because it is at zero for a long period but also because it jumps quickly at the point of the threshold.  In the social science literature, this is what they call a “step-function”, and it’s not a great idea because it means at the point of the threshold, individuals actually become significantly worse off (in this case, by $193 per month) by earning one extra dollar.

At low levels of borrower income, Canada, the United States and New Zealand all look quite similar in that they require borrowers to begin repayment at much lower levels of income ($20-25,000) than in either the UK ($43,000) or Australia ($57,000).  At income levels between $20,000 and $34,000, New Zealand demands the highest levels of repayment.  Between $34,000 and $50,000 (the part of the income curve where most recent graduates can be found), Canada has the highest repayment requirements; above $50,000 it’s New Zealand again. Between $25,000 and $75,000 it is definitely advantageous to be in Australia or the UK as these have the lowest payments.  However, by $80,000 repayments in the US system are the lowest and if we were to extend the chart out to $85,000 then we would see repayments in Australia and the UK exceed the Canadian level.

A final point: the Canadian system imposes the highest costs on students in precisely the income-range where most recent graduates fall.  We could do more for them here; specifically, if we reduced the maximum repayment rate to 15% from 20%, we would kink the curve in such a way that monthly repayments would never be higher than they are in New Zealand.  Something to think about for the next budget, perhaps.

 

October 18

Presidential Salary Comparisons

The President of Iowa State University was recently reprimanded for crashing one school-owned airplane, overusing the other, and charging the cost to the institution.  The institution’s Board is asking serious questions: such as “why they were paying for the President to go back and forth to his family-owned Christmas Tree business in North Carolina,”  but not, apparently, “why in God’s name does our university own two aeroplanes?” As one does.

As I read this story, I thought “if nothing else, that’s a pretty amusing segue to talking about Presidential salaries, which I haven’t done in awhile.”  I made some international comparisons on Presidential salaries about four years ago, and basically came to the conclusion that i) being an Australian university President was a really sweet gig and ii) Canadian university Presidents were paid a lot less than their counterparts elsewhere.  But hey, what’s a daily blog that doesn’t occasionally revisit the same topic with new data?

So, same rules as last time: For Canada, the data is from the ever-useful CAUT Almanac, except for l’Université de Montréal, which I took from press reports.  For the US, the data is from the Chronicle of Higher Education’s annual survey on Presidential pay (I’d link but it’s paywalled) and is restricted to Presidents of public universities.  UK data is from the Times Higher Education Supplement, and Australian data is from The Australian.  Data for Australia is 2014, for the the UK and the US it is 2014-15 and for Canada it is 2012 (except Montreal, where it is 2014).   Currencies have been converted to US dollars using the 2014 Big Mac Index – if you want to translate these into Canadian dollars, just add 20%.  Figures represent total compensation rather than base pay.

In the first chart, I take the top-ten highest-paid university Presidents in each country and average their salaries.  As is plainly evident, the highest-earners Canadian Presidents are nowhere near as well paid as their foreign counterparts – in fact they receive less than half what top brass are paid in Australia (it’s difficult to be definitive given the different ways of converting currencies, but essentially, the worst-paid President in Australia is better-compensated than the top-earning President in Canada).

Figure 1: Average Salary of Ten Best-paid Public University Presidents in Canada, Australia, UK and US

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Arguably this isn’t an entirely fair comparison because we are simply looking at the average at one end of a distribution.  So, to try to make a more apples-to-apples comparison, I also took an average of salaries at each country’s “top” institutions.  To do this, I looked at the Academic Ranking of World Universities (i.e. the Shanghai Rankings), and took the top 10 public institutions in the US (all in the top 40 worldwide), the top 9 institutions in the UK (the 9 in the top 100), the top 8 institutions in Australia (those in top 150) and the top 6 in Canada (also those in top 150 – meaning Toronto, UBC, Montreal, McMaster, Alberta and Montreal).  Here’s what this comparison looks like: 

Figure 2: Average Salary of Presidents at Top-Ranked Institutions in Canada, Australia, UK and US

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So: everyone’s average drops somewhat because it’s not always the top universities paying the top salaries.  The drops are biggest in the US and the UK, but the rank order of average salaries remains the same: Australia way at the top, Canada at the bottom.  In fact, at roughly equivalent universities, Australian Presidents are making over two and a half times as much as Canadian ones.

To be clear: I’m not making am argument for going hog-wild on Presidential pay here in Canada.  On the whole, I think we’re closer to getting it right on senior exec pay than others are.  But our obsession with executive pay perennial habit of calling out “fat cats” is misplaced.  By international standards, our Senior execs’ pay is pretty modest.  And we keep them away from private planes, too.

September 16

OECD data says still no underfunding

The OECD’s annual datapalooza-tastic publication Education at a Glance was released yesterday.  The pdf is available for free here.  Let me take you through a couple of the highlights around Higher Education.

For the following comparisons, I show Canada against the rest of the G7 (minus Italy because honestly, economically, who cares?), plus Australia because it’s practically our twin, Korea because it’s cool, Sweden because someone always asks about Scandinavia and the OECD average because hey that just makes sense.  First off, let’s look at attainment rates among inhabitants 25-34.  This is a standard measure to compare how countries have performed in the recent past in terms of providing access to education.

Figure 1: Attainment Rates, 25-34 years olds, selected OECD countries

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*Data for Master’s & above not provided separately for Korea and Japan, and is included in Bachelor’s

Education-fevered Korea is light-years ahead of everyone else on this measure, with 69% of its 25-34 yr old population attaining some kind of credential, but Canada is still close to the top at 59%.  In fact we’re right at the top if you look just at short-cycle (i.e. sub-baccalaureate) PSE (see previous comments here about Canada’s world-leading strengths in College education); in terms of university attainment alone, our 34% is slightly below the OECD average of 36%.

Now let’s turn to finances.  Figure 2 shows total public and private expenditure on Tertiary educational institutions.

Figure 2: Public and Private Expenditures on Tertiary Institutions, as a Percentage of GDP, Selected OECD Countries

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Canada spends 2.5% of GDP on institutions, just below the US but ahead of pretty much everybody else, more than 50% higher than the OECD average.  For those of you who have spent the last couple of years arguing how great Germany because of free tuition is and why can’t Canadian governments spend money like Germany, the answer is clearly they can.  All they would need to do is cut spending by about 30%.

(If you’re wondering how UK claims 58% of all money in higher ed comes from government when the latest data from Universities UK shows it to be 25%, the answer I think is that this is 2013 data, when only 1/3 of the shift from a mainly state-based university funding system to mainly student-based funding system had been completed)

Turning now to the issue of how that money is split between different parts of the tertiary sector, here we see Canada’s college sector standing out again: by some distance, it receives more funding than any other comparable sector in the OECD (with 0.9% of GDP in funding).  The university sector, by contrast,  gets only 1.6% of GDP, which is closer to the OECD average of 1.4%.

Figure 3: Expenditure on Tertiary Institutions, by sector, as a Percentage of GDP, selected OECD countries

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*US data not available for short-course, 2.6% is combined total

Now this is the point where some of you will jump up and say “see, Usher?  We’re only barely above the OECD average! Canadian universities aren’t as well-funded as you usually make out.”  But hold on.  We’re talking % of GDP here.  And Canada, within the OECD is a relatively rich country.  And, recall from figure 1 that out university attainment rate is below the OECD average, which means those dollars are being spread over fewer students.  So when you look just at expenditures per student in degree-level programs, you get the following:

Figure 4: Annual Expenditures per Student in $US at PPP, Degree-level Programs only, Selected OECD Countries

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Again, Canada is very close to the top of the OECD charts here: at just over $25,000 US per student we spend over 50% more per student than the OECD average (and Germany, incidentally – just sayin’).

So, yeah, I’m going to give you my little sermon again: Canada’s is not an underfunded university system by any metric that makes the remotest bit of sense.  If we’re underfunded, everyone’s underfunded, which kind of robs the term of meaning.

That doesn’t mean cuts are easy: our system is rigid and brittle and even slowing down the rate of increase of funds causes problems.  But Perhaps if we directed even a fraction of the attention we pay to “underfunding” to the problem of our universities’ brittleness we might be on our way to a better system.

I won’t hold my breath.

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 
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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.

November 23

The Nature of Universities: Multicultural Edition

I find myself increasingly annoyed with particular a line of rhetoric that academics sometimes use when they want to make a point.  “The university is not a corporation”, they say, “it is a community of scholars dedicated to the truth – if it is not that it is nothing.” You know, the Steffan Collini-types.

Two things here.  First, a modern university actually is demonstrably a corporation, which is indeed a very good thing for everyone who likes to get a steady paycheque.  I’ll come back to that issue in another blog post relatively soon, but what I want to get at here is this whole notion of the “university-as-truth-seeking- community-of-scholars” thing, because it’s really only true in some parts of the world, and even there it’s not 100% true.

Let’s start with Europe.  There, the first “universitas” (the word means “a whole” in Latin), was not a universitas of scholars, but rather of students.  Back in Bologna in the 11th century, students basically formed a union in order to bargain collectively both with Bolognese landlords (town-gown relations being a fairly important thing at the time) and with professors (over fees and professors’ responsibility to show up to class on time – things have turned around a bit on that one).  Gradually, scholars themselves started to band together, and often fought with civic or, more often, ecclesiastical patrons about the right to self-organize.  And there were certainly occasions when professors themselves founded a university on their own (Cambridge, for instance).  This is one of the reasons why, until quite recently, in much of Europe the governing boards of universities were entirely internal to the university, and did not include non-academics. So, close to 100% true here.

But it was a different story in North America.  Here, universities were set up by local communities, and governing boards and Presidents were put in place before academics were hired.  Unlike Europe, therefore, in North America professors have always been employees of universities.  True, after WWII, they obtained a lot of the trappings of self-governing communities of scholars, but that’s not how they started out, and they remain to a considerable degree under the control of boards, which are either made up of state appointees or a self-perpetuating group of local worthies.  So mostly true here, if not quite as much as in Europe.

Now, consider some different traditions.  If you go back to the earliest precursors of higher education in Asia and the Middle East, the “community of scholars seeking the truth thing” is fairly hard to discern.  The scholars at the Imperial Academies of China, for instance (which I wrote about back here), were concerned more about imparting the minutiae of Confucian ideology to future civil servants than they were about opening up these ideas to scrutiny.  The great medieval Islamic universities like Al-Azhar are basically madrassas, and certainly by the late 10th century and the “closure of the door of ijtihad”, there wasn’t a whole lot of new thinking going on; the belief was that everything useful with respect to the Qu’ran and the Sunna had already been learned, and so it was simply a matter of preserving this wisdom for future generations.  The great Indian “university” of Nalanda taught a broader set of courses (including very applied stuff like archery) and was more open to discussion, but it was still a community of priests rather than a community of scholars.

And those traditions continue today, to some extent.  In many parts of the world, universities main functions were – and are – to provide career-oriented instruction and to perpetuate official ideologies.  In Communist China, universities are very definitely under the control of the Party (if not the State), and the search for “the Truth” is necessarily somewhat circumscribed.  Does that mean Chinese universities don’t deserve to be called universities?  Similarly, were there no universities in Russia between 1918 and 1992?  What about the many universities in the oil states of the Gulf?  In none of these places would universities appear to meet the description that Western idealists claim is the bare minimum; does this mean there are no “real” universities there, either?  I bet there are a lot of people in those countries who, while wishing for more academic freedom like their western colleagues, would nonetheless bristle at the claim that their universities – and hence their scholarship – is any less real than ours.

There are good historical reasons why western universities look the way they do, and we are not wrong to treasure them.  But maybe, if we are going to use universalizing rhetoric about what universities are, we should have the decency to test the validity of our generalizations.

September 30

Fields of Study: Some International Comparisons

Stop me if you’ve heard this one before: “We really need to have more STEM grads in this country.  Really, we ought to be more like Germany or Japan – fewer of these ridiculous philosophy degrees, and more of those lovely, lovely engineers and scientists.”

Personally, I’ve heard this one too many times.  So, just for yuks, I decided to take a look at the distribution of degrees awarded by field of study across the G7 countries, plus (since I’m overdue in throwing some love in the direction of the blog’s antipodean readership) New Zealand and Australia.  The data is from the OECD, and is valid for 2012 for all countries except France, where the data is from 2009, and Australia where it is from 2011.

I started with the percentage of degrees that came from the Arts and Humanities.  The result was… surprising.

Figure 1: Percentage of All Degrees Awarded From Humanities Fields

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Germany leads the pack with just under 21% of all degrees being awarded in humanities, and Canada and Australia bring up the rear with 11.6% and 11.1%, respectively.  So much for the narrative about Canada producing too many philosopher baristas.

But as we all know, humanities are only half the story – there’s also the question of applied humanities, or “Social Sciences” as they are more often known.  The Social Science category includes business and law.  It turns out that if you add the two together, the countries cluster in a relatively narrow band between 47 and 56 percent of all degrees granted.  No matter where you go in the world, what we call “Arts” is basically half the university.  We should also note that Canada’s combined total is essentially identical to those of the great STEM powerhouses of Japan and Germany.

Figure 2: Percentage of All Degrees Awarded From Humanities and Social Science Fields

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Let’s now look directly at the STEM fields.  Figure 3 shows the percentage of degrees awarded in Science and Engineering across our nine countries of interest.  Here, Germany is in a more familiar place, at the top of the table.  But some of the other places are surprising if you equate STEM graduates with economic prosperity.  France, in second, is usually not thought of as an innovation hub, and Japan’s third place (first, if you only look at engineering) hasn’t prevented it from having a two-decade-long economic slump.  On the other hand, the US, which generally is reckoned to be an innovation centre, has the lowest percentage of graduates coming from STEM fields.  Canada is just below the median.

Figure 3: Percentage of Degrees Awarded from Science and Engineering Fields

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Last, Figure 4 looks at the final group of degrees: namely, those in health and education – fields that, in developed countries, are effectively directed to people who will pursue careers in the public services.  And here we see some really substantial differences between countries.  In New Zealand, over one-third of degrees are in one of these two fields.  But in Germany, Japan, and France – the three STEM “powerhouses” from Figure 3 – very few degrees are awarded in these fields.  This raises a question: are those countries really “good” at STEM, or do they just have underdeveloped education/heath sectors?

Figure 4: Percentage of Degrees Awarded in Health and Education Fields

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So, to go back to our initial story: it’s true that Japan and Germany are heavier on STEM subjects than Canada.  But, first, STEM-centricness isn’t obviously related to economic growth or innovation. And second, STEM-centricness in Germany and Japan doesn’t come at the expense of Arts subjects, it comes a the expense of health and education fields.

April 01

Some Inter-Provincial Finance Comparisons

Last week, I blogged about how OECD figures showed Canada had the highest level of PSE spending in the world, at 2.8% of GDP.  Many of you wrote to me asking: i) if the picture was the same when we looked at other measures, like per-capita spending or spending per-student; and, ii) could I break things down by province, instead of nationally.  I am ever your servant, so I tried working on this.

I quickly came up against a problem, which was simply that I could in no way replicate the OECD numbers.  Using numbers from FIUC (for universities) and FINCOL (for colleges), the biggest expenditure number I could come up with for the 2011-12 year was $41.75 billion in institutional income.  Dividing this by the 2011 GDP figure of $1.72 billion used in Education at a Glance (itself inexplicably about 3% smaller than the $1.77 billion figure Statscan reports for 2011) gives me 2.43%, rather than the 2.8% Statscan reported to OECD.  There is presumably an explanation for this (my best guess is that it has something to with student assistance), and I have emailed some folks over there to see what’s going on.  But in the meantime, we can still have some fun with inter-provincial comparisons.

Let’s start with what provinces spend on universities:

Figure 1: University Income by Province and Source as a Percentage of GDP

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In most provinces, total university expenditure is right around two percent of GDP.  Only in two provinces (Saskatchewan, Alberta) is it significantly below this, and only in two (Nova Scotia, Prince Edwards Island) is it significantly above.  In terms of public expenditure, the average across the country is about one percent of GDP.  Nova Scotia, at 3.2%, is likely by some distance the highest-spending jurisdiction in the entire world.

Now, some of you are no doubt wondering: how the heck can Nova Scotia universities spend two and a half times what Alberta universities spend (in GDP terms) when the latter are so bright and shiny and the former are increasingly looking a little battered?  Well, I’ll get more into this tomorrow, but the quick answer is: Alberta’s GDP is eight times higher than Nova Scotia’s, but it only has about three times as many students.

Of course, universities aren’t the whole story.  Let’s look at colleges:

Figure 2: College Income by Province and Source as a Percentage of GDP

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This is a wee bit more interesting.  Most provinces are bunched closely around the 0.5% of GDP mark, except for Quebec and Prince Edward Island.  If we were using international standards here, where college is usually interpreted as being ISCED level 5 (or level 5B before the 2011 revision), Quebec’s figures would be much lower because CEGEP programs leading to university are considered level 4 (that is, post-secondary, but not actually tertiary), and hence would be excluded.

But PEI is the real stunner here: apparently Holland College accounts for nearly 1.2% of GDP.  This sounds ludicrous to me and I have no explanation for it, but having looked up Holland College’s financials it seems to check out.

Here’s the combined picture:

Figure 3: Total PSE Income by Province and Source as a Percentage of GDP

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So, what we see here is that most provinces again cluster around spending 2.5% of GDP, which would put their spending roughly on par with the world’s second-biggest spender, Korea (but slightly behind the United States).  Saskatchewan, at 2% of GDP, would still be ranked very highly, while Alberta, at 1.73% would be only a bit above the OECD average.

The crazy stuff is at the other end: PEI and Nova Scotia, where higher education spending exceeds 3.75% of GDP.  And yeah, their GDP is lower than most of the rest of the country (GDP/capita in those two provinces, at $39,800 and $41,500, respectively, is less than half what it is in Alberta), but there are lots of OECD countries with GDPs of roughly that level of income (e.g. Spain) who spend about a third as much on education.

Tomorrow, we’ll look a bit more at per-student spending.

June 30

The Effects of Tuition Fees (Part 2)

As I mentioned last week, a major paper I’ve been working on for over a year with colleagues from DZHW on the subject of the effects of fees was published last Monday by the EC (available here).  In my last post, I talked about how fees affected institutions – today, I want to talk about how they affect students.

In our report, we looked at case studies over 15 years (1995-2010) from nine countries – Austria, Canada, England, Finland, Germany, Hungary, Poland, Portugal, and South Korea.  These countries represent very different experiences.  Some have private higher education, others don’t.  Some have public sectors that change fees, while others don’t (Hungary and Poland are in the middle, where public universities provide education free for some while charging for others).  And looking across all the different cases, we found = the following:

1)      Most tuition increases have no perceptible effect on enrolment.  The only cases where clear-cut effects could be discerned was in England in 2012, where the increase was about $10,000 in a single year, and in the de-regulation of professional fees in Ontario in the mid-90s (where, bizarrely, low-income students were not affected, but middle-income students were).

2)      That said, there are also some clear-cut cases where tuition has been a driver of increased access.  In both Poland and South Korea, major increases in enrolments were driven by the existence of fee-supported places (mainly but not exclusively in private institutions).

3)      Though this is partly a matter of many countries having education data-sets that make Canada’s look enviable, there is very little evidence that changes in fees have done much to change the composition of the student body.  In every country where there is data, underrepresented groups have done better over time, regardless of the fee regime.  Even in the extreme case of England 2012, under-represented groups (the poorest income quintile, black and Asian students) tended to be less affected by the tuition increase than richer, whiter students. (The one exception here is older students, who were disproportionately affected by the changes.)  To the extent that late-entrants to higher education come from poorer backgrounds, this should be seen as a kind of hidden socio-economic effect of fees.

4)      Changes in tuition fees seem to have had no discernible effects on students’ choice of major, and few discernible effects on students’ decisions about where to study (in Canada, for instance, rates of out-of-province study are actually up over the last decade).

5)      It is not so much that fees themselves have no effect; rather, it is that in nearly all cases, fees are introduced with accompanying increases in student aid.  Sometimes it is paltry compared to the size of the fees required (e.g. South Korea in the 90s), sometimes it is implemented in a fairly clunky way (Germany, mid-2000s).  But it is always there to offset the worst effects of fees.  And in the case of England 2012, it was there to ensure that students weren’t required to pay a single extra penny of costs up-front, which seems to have had a major factor in limiting the impact of the world’s largest-ever tuition increase (in the short-term at least).

The lesson here?  Unless you’re planning on going England-style crazy, international evidence fee increases are unlikely to affect access in a measurable way.

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