An important reason why private college and university tuition has risen faster than the CPI during the past few decades is because competition for faculty members — whose potential earnings in other sectors have steadily improved — has driven up their pay faster than their productivity.
Responses
© 2025. Kent A. Clark Center for Global Markets.
15%
10%
3%
15%
20%
33%
5%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
5%
22%
25%
37%
11%
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
 Daron Acemoglu |
MIT | Bio/Vote History | ||
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This is not the only reason but one factor. Universities are also spending more on other inputs, including more on administration.
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 Alberto Alesina |
Harvard | Bio/Vote History | ||
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 Joseph Altonji |
Yale | Bio/Vote History | ||
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Faculty salary growth relative to instructional productivity matters, but other factors have played a more important role in tuition trends.
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 Alan Auerbach |
Berkeley | Bio/Vote History | ||
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 David Autor |
MIT | Bio/Vote History | ||
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Maybe top colleges set a price at whatever insurer (or government lender) will pay then charge a co-pay to extract remaining surplus...
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 Katherine Baicker |
University of Chicago | Bio/Vote History | ||
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 Marianne Bertrand |
Chicago | Bio/Vote History | ||
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 Raj Chetty |
Harvard | Did Not Answer | Bio/Vote History | |
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 Judith Chevalier |
Yale | Bio/Vote History | ||
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There are other important reasons too.
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 Janet Currie |
Princeton | Bio/Vote History | ||
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Productivity measured as students per professor may have decreased, but research productivity may have increased.
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 David Cutler |
Harvard | Bio/Vote History | ||
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 Angus Deaton |
Princeton | Bio/Vote History | ||
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Sounds good for Booth, but implausible for history or English.
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 Darrell Duffie |
Stanford | Bio/Vote History | ||
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 Aaron Edlin |
Berkeley | Did Not Answer | Bio/Vote History | |
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 Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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 Ray Fair |
Yale | Bio/Vote History | ||
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 Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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Increases in administrative overhead, expansion of facilities and rising health/pension costs have been more important.
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 Claudia Goldin |
Harvard | Bio/Vote History | ||
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 Austan Goolsbee |
Chicago | Bio/Vote History | ||
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 Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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I suspect this is true but it is also the case that returns to college attendance are way up, so faculty/university productivity is way up.
-see background information here |
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 Robert Hall |
Stanford | Bio/Vote History | ||
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Higher ed is like other human-service-intensive activities, bound to become more expensive relative to goods production.No special force.
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 Bengt Holmström |
MIT | Bio/Vote History | ||
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 Caroline Hoxby |
Stanford | Bio/Vote History | ||
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This is ONE poss supply explanation.There are many demand and policy explan about which most economists answering this Q know little. Bad Q!
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 Kenneth Judd |
Stanford | Bio/Vote History | ||
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Productivity growth will be slow as long as we use current methods. This could change drastically if we move to online modes of instruction.
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 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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too many competing hypotheses and I don't know enough about the evidence to pick between them
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 Pete Klenow |
Stanford | Bio/Vote History | ||
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The price of skill has surely risen, so that has to be a contributor. But colleges probably got better too. And Bennett's Hypothesis.
-see background information here |
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 Edward Lazear |
Stanford | Bio/Vote History | ||
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Wages of all educated service workers have risen over time. No evidence and competition does not imply increase greater than productivity.
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 Jonathan Levin |
Stanford | Did Not Answer | Bio/Vote History | |
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 Eric Maskin |
Harvard | Bio/Vote History | ||
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 William Nordhaus |
Yale | Bio/Vote History | ||
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 Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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While some faculty salaries have risen faster than productivity, these make up a small fraction of total university operating costs.
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 Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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 José Scheinkman |
Columbia University | Bio/Vote History | ||
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 Richard Schmalensee |
MIT | Bio/Vote History | ||
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 Hyun Song Shin |
Princeton | Did Not Answer | Bio/Vote History | |
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 James Stock |
Harvard | Did Not Answer | Bio/Vote History | |
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 Nancy Stokey |
University of Chicago | Bio/Vote History | ||
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The rising skill premium is probably at work here.
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 Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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Seems like this would vary a lot among fields.
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 Christopher Udry |
Northwestern | Bio/Vote History | ||
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It's not clear to me that this is an important factor outside a limited number of disciplines.
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 Luigi Zingales |
Chicago Booth | Did Not Answer | Bio/Vote History | |
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