n.a.
Although collegiate attainment rates have risen in many developed and developing countries over the last three decades, they have remained essentially flat in the United Stares over the same period. In this chapter, we distinguish various models of degree attainment in the general context of theoretical and empirical specifications of educational attainment. To explain collegiate degree attainment, we consider the roles of student demand, the supply side of the postsecondary education market, and the role of public support in determining outcomes. Although the study of college degree attainment has traditionaliy focused on demand-side determinants of attainment, including how students finance college attainment and academic preparation, we present here the evidence that supply-side determinants including the level of public subsidies and the associated stratification among colleges and universities are also important determinants of degree attainment. Review of this evidence and research suggests a number of unexplored areas for economic research related to college choice, in-college attainment, and the supply-side determinants of stratification and resources per student.
Despite the involvement of two-thirds of economists in it, the higher education industry remains incompletely understood. Among the topics related to higher education that invite further research are the rapid increase in college costs, the interaction of tenure and the end of mandatory retirement, and the effects of college enrollment on income inequality. Data from surveys of freshmen suggests that the gap in socioeconomic status between students in private universities and other young people has grown over time.
The author asks whether it is useful to view universities in a utility-maximizing framework and shows that university organizing virtually guarantees that the utility-maximizing model is the incorrect approach. He then discusses resource allocation issues at Cornell and reflects upon how concepts that are obvious to economists helped or hindered decision making at Cornell. The author hopes to convey not that economic concepts are irrelevant in operating a university, but rather that it takes a long time to explain to all the actors in the system why these concepts should matter and even longer to actually make them matter.
The American university was shaped in a formative period from 1890 to 1940 long before the rise of federal funding, the G.I. Bill, and mass higher education. Both the scale and scope of institutions of higher education were greatly increased, the research university blossomed, states vastly increased their funding of higher education, and the public sector greatly expanded relative to the private sector. Independent professional institutions declined, as did theological institutes and denominational colleges in general. Increases in the scale and scope of institutions of higher education were generated by exogenous changes in the that affected the professions generally and that of the clergy in particular. The increase in the share of students in the public sector may also have been prompted by these exogenous changes for they gave advantages to institutions, such as those in the public sector, that had research facilities, reputation, and a long purse. The high school movement, which swept parts of the country from 1910 to 1940, brought students from less privileged backgrounds to college and thus also buoyed enrollments in the public sector. States differed widely in their funding of higher education per capita and we find that greater generosity in 1929 was positively associated with later statehood, lower private college enrollments in 1900, greater shares of employment in mining and manufacturing, higher income, and a proxy for greater and more equally distributed wealth.
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