Tuesday, January 28, 2014

One Big Fact and One Big Myth

The latest from the Community College Research Center -- “Community College Economics for Policymakers: The One Big Fact and The One Big Myth” by Clive Belfield and Davis Jenkins -- is a must-read.

Belfield and Jenkins argue that current policy debates around community colleges are misguided because they fail to account for one big fact and they incorrectly believe one big myth.  The big fact is that the personal and social returns on investment in community college education are substantial and growing.  The big myth is that community college’s financial troubles are the result of inefficiency.

I strongly recommend reading the entire piece yourself.  Even the parts I don’t entirely agree with are well-argued, and the core of the argument is both correct and badly needed.

The subtext of the piece, I think, is an accurate sense that many of the issues facing community colleges in the political sphere stem from category mistakes.  Anger at lavish dorms at private universities gets directed at community colleges, where lavish dorms simply don’t exist.  Anger at a poor job market gets directed at community colleges, even though the returns on investment for students has remained positive, even during a nasty recession.  Facile generalizations about “higher education” based on universities get applied to a sector with an entirely different internal logic and business model.  Concerns about student loan burdens, largely generated in the for-profit sector, get applied to the lowest-tuition part of American higher education.

I was particularly struck by their examination of what community colleges actually receive and spend.  Although tuition and fees have increased over the past ten years, all of the increase -- and slightly more -- can be explained as cost-shifting from the state (or county) to students.  Actual spending by the colleges has actually dropped.  And that’s in the face of Baumol’s cost disease, which the authors acknowledge.  

The difference has been made up through a host of strategies, most notably the shift to ever-higher percentages of adjunct faculty.  If you don’t notice the underlying cost-shift, which most people wouldn’t, then it looks like colleges are charging more and offering less.  In fact, both are symptoms of attempting to address relatively low productivity growth in a setting of externally determined austerity.

The paper is more hostile than it needs to be towards certain innovations, but in the context of the larger argument, that’s a footnote.  Check the paper out in its entirety, forward it to powerful people, learn its lessons.  It’s a tall, cool drink of truth.