today and which this report again addresses. Additionally, the difficult measurement issues limiting completeness of the analysis 100 years ago are still very much in play, as we detail in Chapter 3.

While productivity measurement in many service sectors is fraught with conceptual and data difficulties, nowhere are the challenges—such as accounting for input differences, wide quality variation of outputs, and opaque or regulated pricing—more imposing than for higher education. Compounding the challenge is that many members of the panel (and many reading the report) are being asked to consider the same measurement tools to analyze their own industry as they would use in analyzing any other. And, from up close, the complexities are much more apparent than when dissecting productivity from a distance.

One lesson drawn from this effort is that we may be too sanguine about the accuracy or relevance of measures of productivity in other sectors, having seen how daunting they can be in a setting with which we are more intimately familiar. The conceptual and practical problems surrounding this effort raise additional concerns because it is known that measurements create incentives, incentives change practices, and those practices have the potential to affect people and institutions we care deeply about. Yet the current higher education environment is not without incentives, many of which have flaws that are at least as profound and distorting as those associated with economic measurement, and are sometimes much worse. Readers of the report will have to make the up their minds whether the potential disadvantages of this approach, as well as the costs of implementing the specific recommendations, are worth the potential benefit. While we understand how some might come to a different conclusion, we believe the advantages outweigh the disadvantages.

1.1. SOCIAL AND POLICY CONTEXT

Not everything that counts can be counted, and not everything that can be counted counts.

William Bruce Cameron

While this observation is broadly profound, it seems exceptionally applicable to the case of higher education. At the same time, a better understanding of the workings and nature of the sector is necessary, given its prominent role in the economy and impact on the future of our society. Higher education is part of the essential fabric of American experience, one in which many citizens spend a significant fraction of their adult lives. For many individuals, higher education is the largest or second-largest consumer decision.

On an aggregate level, colleges and universities employ around 3.6 million individuals, 2.6 million of those in professional positions.1 The sector accounts

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1From Bureau of Labor Statistics, see http://www.bls.gov/spotlight/2010/college/ [June 2012]. This source also includes data on teacher salaries by field, earnings by graduates, etc.



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