which this report is concerned.1 Regarding aggregation, productivity can be measured at increments from the micro level (for example, course and departmental units of analysis, which are important for assessing institutional efficiency) to the macro level (relevant in itself for policy, and also because national accounting offers principles for assembling data used in productivity analysis).
Even as we attempt to advance the discussion of measurement in higher education, we recognize that methodologies and data collection will continue to develop. The measure proposed in Chapter 4, while more promising than simpler metrics, still represents only a partial accounting of the output of the higher education sector. As a first approximation for estimating the value of degrees in various fields, researchers have looked at the associated earnings profiles of those who have earned them. The members of this panel have a range of views on the validity and usefulness of this approach. Some argue that there are legitimate reasons for policy makers to look at market wages, such as when assessing the contribution of college graduates or institutions to economic growth in their regions. Others on the panel argue that such analyses unjustifiably devalue liberal arts education (and fields such as education and social work), and may be particularly harmful when undertaken under pressures created by tightening state budgets.
The panel does agree that policy makers should be concerned with social value, not just market value generated by higher education, and that, for many purposes, emphasis on the latter is a mistake. Earlier chapters include discussion of why current salary differentials (by degree and field) are not necessarily good predictors of future differentials and, thus, why valuing degrees by salaries that graduates earn may be misleading. Some socially important fields pay relatively low salaries which do not reflect their full social value. Furthermore, investment in citizens’ careers is not the only objective, from a societal perspective, of supporting and participating in higher education. The nonpecuniary components of higher education output, such as research and other public goods, are also important; even the consumption component of college, including student enjoyment of the experience, is quite clearly significant.
While acknowledging inherent limitations in our ability to comprehensively and coherently account for such a multi-dimensional and diverse productive activity, our view is that simplified, practical approaches that can be implemented by administrators and policy makers can add analytic value. Our recommendations provide guidance for establishing and building on the model of productivity measurement presented in Chapter 4, predicated on the notion that acknowledging the quantitative aspects of productivity is reasonable as a first step.
1Of course, just because a cost can be separated does not mean that it always should be. A museum, for example, may provide classes and a cultural center. A portion of the museum’s cost would then be attributed to the educational mission and a portion to student services.