Archibald and Feldman: Why college costs so much
For the majority of Americans, higher education is more affordable today than it was a decade ago, according to Robert Archibald and David Feldman, professors of economics at William & Mary.
Their assertion, which runs counter to charges commonly made by media commentators that out-of-control spending practices have led to exorbitant tuition increases at institutions of higher education, is based on the long-term economic analysis of similar service-based industries, the professors explain. The argument is central to their forthcoming book, Why does college cost so much? The book, according to the authors, considers higher-education costs in light of “the entire industrial structure of the country and economic history of the past 100 years."
“We wrote the book partly because we thought we had something to say and partly because we felt that others who were writing on this topic did not have the right things to say,” Archibald said.
Many critics of higher-education costs assume that affordability
is tied to the percentage of a person’s income that it takes to purchase higher
education, and since that percentage has gone up, it follows that a university
education is less affordable, Archibald explained. “Our view is that the right
way to think about affordability is that if you can buy that education along
with everything else you used to buy and have more money left over, then nothing
has become less affordable,” he said. “That, in fact, is the case. The medium
household can buy a higher education and have more money left over than it used
to."
Archibald and Feldman assert that a fundamental cost driving
up the price of higher education results from the reliance on a
“highly-educated” workforce. Although some “artisan” industries have been able
to replace such workers by utilizing appropriate technologies, universities, as
are other “personal-services industries,” are limited in their abilities to do
so, they said.
“For much of the 20th century, the supply of highly-educated workers was soaring,” said Feldman. “Since the late 1970s and early 1980s, the supply of highly educated workers as a percentage of the labor force has begun to flatten off. The result is an increase in wages for highly-educated people.”
They refute the claim that costs are being driven upward by what they term “gold-plating,” the idea that universities add amenities merely to compete for higher rankings.
“If you go back to 1960, the standard of living today is about
two-and-a-half times higher,” Feldman said. “To argue that the living spaces,
or that the food service offerings, should be the same as in 1960 is an
aesthetic claim that flies in the face of what the people who are making that
claim actually experience in their own lives.
“What’s driving it is not some nefarious competition between
Harvard and Yale or William & Mary and Christopher Newport for attracting
students with the best food plan, because there is an outside market that is at
work here.”
Added Archibald, the costs of two-year and four-year schools have moved up in similar patterns over the long term, even though there is no meaningful prestige competition among two-year schools.
Archibald and Feldman started working together more than 10 years ago writing articles concerning higher-education finance. As they collaborated, they watched the relationship between their own public university, the College of William & Mary, and its historic benefactor, the Commonwealth of Virginia, change. “Essentially we saw state support decline in an interesting roller-coaster fashion,” Feldman said. Investigation revealed that the same broad economic factors that led to loss of state income for public universities similarly affected income streams of private institutions. Their effort to understand the factors contributing to rises in tuition for both types of institutions ultimately led to publication of their book.
