Yesterday, in talking about the global decline in post-secondary non-tertiary enrolments, I made the point that rising dependency ratios mean tighter labour markets, which in turn makes higher education more expensive due to higher foregone earnings. This, I noted, would put pressure on higher education to reduce the length of programs.

The push for shorter programs will come both from individual learners and from employers and government.  For learners, it is because high wages mean high opportunity costs.  From a Human Capital Theory POV, assuming a 2000-hour work-year, an increase in wages of $3.50 an hour raises “costs” (that is, tuition fees plus foregone income) by $7,000 a year, or equal to as much as a doubling of tuition at the university level.  You can bet that will deter some people from applying.  From the government/employer side, in a world of rising dependency ratios, every year an individual otherwise capable if working stays out of the labour force is a liability.  It’s a year where tax income is not being generated, a year where someone could be alleviating labour shortages rather than contributing to them.  For those reasons, public policy will soon enough start to push a lot harder on incentivizing shorter times-to-completion.

This is a very different world from the one we have become used to over the last fifty years.  For most of that time, slack labour markets kept foregone income low, and school seemed like a decent place to keep extra labour when unemployment was high.  That allowed the sector to lengthen programs: three-year university degrees became four years, two-year college diplomas became three, and there never was a problem a university couldn’t solve by introducing a two-year master’s degree.  Now, though, the demographic tide is heading in the other direction, the pressure to reduce program length will begin.

But that’s only the first-order change.  The bigger adjustment that needs to be made at the policy level is that we can’t MOAR our way out of sectoral labour market problems anymore.  You know what I mean: skilled trades have a problem so we need to produce MOAR plumbers, electricians, whatever.  Healthcare needs nurses, tech sector wants more software engineers, enrol MOAR of those.  The only tool most provincial governments seem to think they possess to deal with this problem is to increase enrolment in priority sectors.  In a slack labour market, there is some sense in this approach.  But in a tight one?  Dealing with a labour shortage in one part of the economy by producing MOAR just exports that one sector’s problem to the rest of the economy.

There is an alternative.  Instead of producing more, we should be producing better.  If we live in a world where we can’t give every small construction company ten electricians, we need to start working out how those companies can do the same work with eight electricians.  Does that software company really need six good engineers?  Maybe it needs four greatones instead.   Or, to put it more bluntly: maybe what we need to start prioritizing is the quality of graduates rather than the quantity.

One might think this observation to be blindingly obvious, but trust me, within the sector it is anything but.  The state of provincial governments’ capacity with respect to quality measurement or quality improvement is as close to zero as makes no odds.  The whole thing all seems very complicated and expensive, and as a result they try to avoid the subject.  And you know what?  It is complicated and (possibly) expensive, which is a major reason that institutions, too, take the path of least resistance and avoid it as much as possible.

Eventually, employers, though, are going to start demanding more of a focus on quality.  Not immediately: since they too have become conditioned over the past few decades to just screaming for MOAR to make labour shortages go away.  But eventually, the demographic reality will hit and they will realize that attention to productivity is a better way to go than simply always demanding cheaper labour.  And then we really will be in a new world.

What will this world look like?  Well, at the institutional level most of all it will be one in which curriculum experts and instructional designers play a much bigger part, because programs are simply going to have to become leaner – producing better outcomes in a shorter space of time.  There will be more competency-based assessments in the system to measure those outcomes.  At government level, there will be more attention to system-wide quality enhancement (as I have said before, I am pretty sure Scotland is closer to the correct approach than anyone else).  I also think that at some point we are likely going to see funding approaches which promote degree or diploma completion over mere enrolment.  This could mean more Ontario-style Performance-Based Funding Systems (though I sincerely hope not), but I could see institutions shift from paying institutions (say) $8,000 per enrolled college student per year to paying them (say) $20,000 per diploma.  And in those fields of study where standardized tests of skills are possible, or where compulsory licensure exams exist, it is not unthinkable that we could have funding schemes based on how well graduates succeed on some kind of exit test, in order to reward programs that are turning out more skilled graduates (this could of course also go badly wrong, either through the introduction of badly-constructed tests, or an inability to control for institutional selectivity when judging outputs). 

The new reality of permanently tight labour markets means we need to re-engineer education systems that were built for a very different age.  It will be a significant shift: significant enough that any will instinctively turn away from the task because it is too big of a break with established practice.  But as COVID showed, post-secondary education systems can make big shifts when they need to.   And at least in this case, we still have a few years in which to retool.  But we need to start soon.  And doubtless the ones that start first will enjoy a healthy prestige bonus in a couple of decades’ time.

The Blog will be on hiatus next week: consultants need reading weeks, too.  See you back here on Monday the 24^th.