4 ms·
If it was Baumol's cost disease was the explanation you would expect the higher costs to show up almost entirely in higher faculty spending. However, the parent
by bradleyjg 12y ago
If it was Baumol's cost disease was the explanation you would expect the higher costs to show up almost entirely in higher faculty spending. However, the parent post (#2 and #3) show that isn't the case. It isn't that the same production factors have gotten more expensive, instead it is that the mix of spending has changed radically -- with ever increasing shares of the budget devoted to ever increasing numbers of non-instructional staff.
Briefly (for the benefit of every else) Baumol's cost disease is the idea that if many professions in a society experience large increases in productivity due to technology, but some don't, those professions that don't will face equivalent increases in labor costs (and thus much higher increases per unit productivity) because those professions must compete for new entrants with the more productive professions.
- jseliger 12y agoTake a look at the linked book, Why Does College Cost So Much; it appears that much of the cost increase goes to benefits, especially health insurance, and even if the superficial cost remains the same the efficiency can go down relative to other parts of the economy (which is part of Baumol's Cost Disease). Archibald and Feldman discuss these hypotheses in-depth in the book.