US

College Tuition

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 weighted by each expert's confidence

Participant University Vote Confidence Bio/Vote History
Acemoglu
Daron Acemoglu
MIT
Agree
4
Bio/Vote History
This is not the only reason but one factor. Universities are also spending more on other inputs, including more on administration.
Alesina
Alberto Alesina
Harvard
Agree
3
Bio/Vote History
Altonji
Joseph Altonji
Yale
Agree
4
Bio/Vote History
Faculty salary growth relative to instructional productivity matters, but other factors have played a more important role in tuition trends.
Auerbach
Alan Auerbach
Berkeley
Agree
3
Bio/Vote History
Autor
David Autor
MIT
Uncertain
4
Bio/Vote History
Maybe top colleges set a price at whatever insurer (or government lender) will pay then charge a co-pay to extract remaining surplus...
Baicker
Katherine Baicker
University of Chicago
Disagree
4
Bio/Vote History
Bertrand
Marianne Bertrand
Chicago
Agree
3
Bio/Vote History
Chetty
Raj Chetty
Harvard Did Not Answer Bio/Vote History
Chevalier
Judith Chevalier
Yale
Agree
7
Bio/Vote History
There are other important reasons too.
Currie
Janet Currie
Princeton
Uncertain
5
Bio/Vote History
Productivity measured as students per professor may have decreased, but research productivity may have increased.
Cutler
David Cutler
Harvard
Disagree
5
Bio/Vote History
Deaton
Angus Deaton
Princeton
Uncertain
1
Bio/Vote History
Sounds good for Booth, but implausible for history or English.
Duffie
Darrell Duffie
Stanford
Agree
2
Bio/Vote History
Edlin
Aaron Edlin
Berkeley Did Not Answer Bio/Vote History
Eichengreen
Barry Eichengreen
Berkeley
Disagree
5
Bio/Vote History
Fair
Ray Fair
Yale
Uncertain
5
Bio/Vote History
Goldberg
Pinelopi Goldberg
Yale
Disagree
6
Bio/Vote History
Increases in administrative overhead, expansion of facilities and rising health/pension costs have been more important.
Goldin
Claudia Goldin
Harvard
Strongly Agree
8
Bio/Vote History
Goolsbee
Austan Goolsbee
Chicago
Uncertain
5
Bio/Vote History
Greenstone
Michael Greenstone
University of Chicago
Agree
4
Bio/Vote History
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
Hall
Robert Hall
Stanford
Uncertain
5
Bio/Vote History
Higher ed is like other human-service-intensive activities, bound to become more expensive relative to goods production.No special force.
Holmström
Bengt Holmström
MIT
Agree
6
Bio/Vote History
Hoxby
Caroline Hoxby
Stanford
Uncertain
10
Bio/Vote History
This is ONE poss supply explanation.There are many demand and policy explan about which most economists answering this Q know little. Bad Q!
Judd
Kenneth Judd
Stanford
Agree
8
Bio/Vote History
Productivity growth will be slow as long as we use current methods. This could change drastically if we move to online modes of instruction.
Kashyap
Anil Kashyap
Chicago Booth
No Opinion
Bio/Vote History
too many competing hypotheses and I don't know enough about the evidence to pick between them
Klenow
Pete Klenow
Stanford
Agree
7
Bio/Vote History
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
Lazear
Edward Lazear
Stanford
Disagree
7
Bio/Vote History
Wages of all educated service workers have risen over time. No evidence and competition does not imply increase greater than productivity.
Levin
Jonathan Levin
Stanford Did Not Answer Bio/Vote History
Maskin
Eric Maskin
Harvard
No Opinion
Bio/Vote History
Nordhaus
William Nordhaus
Yale
Strongly Disagree
8
Bio/Vote History
Obstfeld
Maurice Obstfeld
Berkeley
Disagree
8
Bio/Vote History
While some faculty salaries have risen faster than productivity, these make up a small fraction of total university operating costs.
Saez
Emmanuel Saez
Berkeley
Agree
4
Bio/Vote History
Scheinkman
José Scheinkman
Columbia University
No Opinion
Bio/Vote History
Schmalensee
Richard Schmalensee
MIT
Strongly Agree
9
Bio/Vote History
Shin
Hyun Song Shin
Princeton Did Not Answer Bio/Vote History
Stock
James Stock
Harvard Did Not Answer Bio/Vote History
Stokey
Nancy Stokey
University of Chicago
Agree
3
Bio/Vote History
The rising skill premium is probably at work here.
Thaler
Richard Thaler
Chicago Booth
No Opinion
Bio/Vote History
Seems like this would vary a lot among fields.
Udry
Christopher Udry
Northwestern
Uncertain
4
Bio/Vote History
It's not clear to me that this is an important factor outside a limited number of disciplines.
Zingales
Luigi Zingales
Chicago Booth Did Not Answer Bio/Vote History