University Stagnation

Arnold Kling has a good question in this post on secular stagnation.  For most questions of the sort "would you rather the 1985 version of X for the 1985 (nominal) price or the 2015 version at the 2015 price, I would choose the latter.  TV's?  Cars?  Phones? Computers?  All way better for the price today.  This of course implies that for many of these items, the inflation rate is really negative if we could adequately take into account quality and technology changes.  Services are a different story.  For health care, I would take the 2015 version and price.  I would have to think about my answer for a while in air travel (I think folks overly romanticize their memory of air travel -- I was travelling PeopleExpress to Newark in the early 80's and that really, really sucked.   My seat and meal are worse nowadays but I am more likely to be on time).

So Kling then asks about college education.  These are convenient dates for me since I graduated in 1984.   So would I rather Princeton in 1984 at about $10,000 or Princeton today at $60,000.  I guess education-wise, the liberal arts course catalog at Princeton in 1984 was more closely matched to my interests, and I don't get any sense the faculty today is better or worse in either period but it likely was more politically diverse in 1984.  So academically, I would easily give the nod to 1984.  For the ancillary stuff, though, the change in quality has been substantial.  The dorms, the dining options, the residential college system, the student center -- all the non-academic stuff is way better today.  However, all that stuff is a lot of what is driving up the nominal price -- is it worth it?   Yes, I suppose so if someone else is paying, lol.  Probably not if I am paying my own way through.

  • irandom419

    Obviously, some classic cars might be worth the older price.

  • J_W_W

    This one's a slam dunk. College at 80's prices, minus the "benefits". Sure at my alma matter the dorms are way nicer the food is better(not much really), but the classes. I would say the course content would be equal (or better) in the past. I'd rather pay what I paid in '92 for my son's education in '15 than what I'm currently paying. All that stuff adds cost, not VALUE.

    One of the things you've hit on is that for technology and "things" relentless advancement and optimization have improved greatly.

    College, and Health Care, and many other services, have been hampered (college does this on purpose) by regulation and protections rackets. Health Care is amazing in that we've gotten advancements in treatment which are great, but on the cost size, health care has optimized for (how much do you have vs. how much are you willing to spend).

    Industries regulated by government are stagnant and slow moving, industries with competition have amazing advancements over 30 years. And some industries, like College Education, have become so calcified and encrusted with regulation and crap that their structures are on the verge of implosion.

    Oh and BTW as for music, its 80's hands down. 😉

  • STW

    I've a daughter who was a tenure track professor until she quit because having no job was better than the academic job she had. She was teaching graduate level aspiring teachers how to be teach well. She expected them to know their content, come prepared, and work to improve. She wanted her students ready to teach they day they stepped into a classroom. A good grade was hard.

    The school wanted butts in the seats paying tuition. They had (greater) debt to service, (higher) salaries to pay, and (more) staff to support. Making school hard for students meant they were unhappy and less likely to put their butt in a seat. The school's unspoken credo became "The grade you want at the largest price you'll willingly pay." Actual education became secondary to revenue.

    Shortly before my daughter left the public school district partnering with the university for student teaching said they would no longer hire graduates to teach in their schools. The university's response (reported by my daughter who was in the meeting) was a vote to redesign their web site, i.e., bring in more students. They don't even know how to add (or recover) value to offset their added costs.

    (And, yes, if it matters, this was in California)

  • Seekingfactsforsanity

    What has happened to the cost of education is mostly about higher salaries and much higher and earlier pensions. It seems to me though that the myriad of soft courses have gone up tremendously combined with easy access to student loans. Growing salaries and pensions = need for the big government partner to make edu loans easy to get = they did and political support for big gov follows. Soft courses = more butts in seats = easier to put liberal BS in in more brains.

  • chembot

    "However, all that stuff is a lot of what is driving up the nominal price -- is it worth it? Yes, I suppose so if someone else is paying, lol. Probably not if I am paying my own way through."

    I guess my odd thought here is that this is the exact thinking on health insurance nowadays. Although the sudden loss of income is a confounding factor, it seems the limited uptake of COBRA insurance pre-obamacare is telling. Those gold plated health insurance plans are a lot less appealing without the employer subsidy. Probably also explains why everyone wants their pet health issue to be mandated for coverage

  • ErikTheRed

    I'm a bit of a lonely soul in my response to this matter, but I've pretty much decided that when it comes to hiring I no longer care if a person has a college degree. In fact, I'm moving towards a point where in my mind it's a net negative. It seems to me... and my thoughts have not completely gelled here... that colleges and universities are creating "lord mentalities" in the least capable people and "serf mentalities" in those who might otherwise be inclined to produce the most value in the world. This is some deeply evil and destructive shit with ramifications far more widespread than the SJW nonsense, and my sense is that if we as businesspeople doing the hiring don't exert market influence against it then we will, as a society, be digging ourselves out of one hell of a monstrous hole in the near future.

  • slocum

    I don't think even the campus environment has improved since 1980. Yes, dorms are posher and the food is better, but helicopter parenting was not a thing then, and there were no university star chambers for sex 'crimes'. You didn't get 'minor in possession' citations for merely having alcohol your system (you actually had to have a drink in your hand -- and even then, the chances of actually being cited were near zero). The student population was still about 50-50, not nearly 60-40 female. Also, the mass switch-over to adjuncts hadn't happened yet -- you were much more likely to get a real, tenure-track instructor then. In many ways, it appears to me that quality of higher education has declined as prices have skyrocketed.

  • donald

    warren, where does the 10k vs 60k come from? Is that annually? if it's annually, the CPI inflation calculator adjusts that difference to about 17k dollars circa 1985. Not that CPI is all that and a bag of chips, but do you think that the "stuff" today is worth 17k back then? I bet back in 1985 you could have eaten out in Palmer Square every day, gotten a much bigger apartment, gotten your laundry done, hired a maid, and really have no worries other than study and attend class. You could buy your own technology, laptop, printer, supplies etc. each semester. I seem to recall an Apple IIe back then around 1,100 bucks or less?

    Speaking of tuition and "stuff" I am intrigued by High Point's tuition plan. Parking, athletic events, airport trans., laundry, events, etc. all included in tuition. dining plan is much better quality of food at most places. Now is the education decent there? Who knows, but they have all the "stuff" in the world to make the student experience fairly care free. So much so in fact that the only excuse a kid has for not getting their classwork done is to look in their dorm room mirror.

  • kidmugsy

    Lavishing money on physical comfort for people who're in the only stage of their life where it doesn't much matter doesn't sound wise to me. What they need at that age is intellectual challenge.

  • DirtyJobsGuy

    Right now sticker price inflation is due to full-fare foreign students. Look at the top priced schools in the USA. They are Ivy's but also other schools. The prices are within a couple of grand of each other (usually reflecting local housing costs). These are the list prices put out to overseas student recruiters. They have a small amount of wiggle room on price but get 10-15% commission on each student. This is a lot of cash then made available to the administration unrelated to any academic program. An in demand ivy or wannabe ivy school can get full fare domestic students without the commission as well. Lower rank schools have to discount domestic students so real emphasis on foreign students.
    This is one reason congress is continually pressured to expand H1B visas. Not only do software firms love indentured servitude, but the H1B program helps recruit foreign students to US universities.