The Knowledge Economy and Postsecondary Education Report of a Workshop (2002) / Chapter Skim
Currently Skimming:
4 Higher Education, the Emerging Market, and the Public Good
4 Higher Education, the Emerging Market, and the Public Good
Pages 105-126
The Chapter Skim interface presents what we've algorithmically identified as the most significant single chunk of text within every page in the chapter.
Select key terms on the right to highlight them within pages of the chapter.
From page 105... ...
Charles Yancey, January 6, 1816 INTRODUCTION One of the more remarkable aspects of contemporary research and analysis of higher education is the repeated invocation of the emergence of a market for postsecondary education and training (Ruch, 2001; Collis, 2001; Duderstadt, 1999, 2000; Munitz, 1998; Goldstein, 1999; Marchese, 1998~. These accounts generally suggest that increased market competition is the inevitable result of economic and technological changes that are transforming higher education from "cottage monopoly to competitive industry" (Munitz, 2000, p.
|
From page 106... ...
It is the argument here that market approaches to higher education are less inevitable than they are ahistorical. Contemporary literature on the need to adapt to changing demands through market solutions does not sufficiently account for the evolution of the nonprofit institution as the dominant form for the provision of postsecondary education in the United States.
|
From page 107... ...
HIGHER EDUCATION AND THE PUBLIC GOOD One of the few areas of agreement with regard to the public good is that it is a problematic concept. Even the phrase "the public good" shares space in our discourse with "the common good" and "the public interest." There are also many references to a different concept, "public goods," in concert with the ascendance of market models and economic approaches to public life.
|
From page 108... ...
Nonetheless, in the United States we have at various historical moments demonstrated a significant degree of consensus around creating elaborate and often costly postsecondary projects and policies in the service of the public good. The creation and expansion of higher education has been a key locus of collective commitment to the production of both public and private goods in the service of the public good.
|
From page 109... ...
Public nonprofit production, in the contemporary policy environment, is challenged by the growth of for-profit production. There are limits to public subsidies and public support for education, and those subsidies will be distributed going forward in a political economic competition between market advocates and those who argue for public provision of higher education (fusser, 2000~.
|
From page 110... ...
To the extent that government had a role, Friedman suggested subsidies should go to individuals, not institutions, and that competition should be increased throughout the system through the portability of financing instruments. Despite the historical and contemporary references to the potential role of the market in postsecondary education, to date, empirical, disciplinebased and theoretical research that addresses the nature or impact of market models for higher education has received less attention than a quite different literature.
|
From page 111... ...
A number of key policy actors are currently proposing significant shifts in the funding and production of higher education using market rhetoric and market models in their justifications (NGA, 2001; Burd, 2001~. In the most dramatic example, Governor Rick Perry of Texas in 2001 suggested transforming the majority of state block grant appropriations for institutions into scholarship funds sent directly to students (Schmidt, 2001~.
|
From page 112... ...
Before turning to these challenges in greater detail, it is also worth noting that the American higher education system is, as a production story, arguably the finest in the world (Kerr, 2001~. Changes to the Market Mode} For at least three decades, economists have pointed to difficulties in attempting to apply market models to higher education (Winston, 1997; Bowen, 1977; Leslie and Johnson, 1974~.
|
From page 113... ...
Given that it is socially useful to cultivate the maximum social benefit from higher education, the nondistribution constraint allows any public investment to go directly to production of social benefits and not to profit. When public investment is combined with direct public provision, in the case of public nonprofit production, the public has the greatest control and influence over the production of social benefits through higher education (fusser, 2000; Goldin and Katz, 1998~.
|
From page 114... ...
A fourth limitation on conceptualizing the production of higher education in a market model is related to the asymmetry problem, as it has been noted that "the perfectly informed customer of economic theory is nowhere to be seen" (Winston, 1997, p.
|
From page 115... ...
Given that approximately 85 percent of postsecondary enrollments are in public and independent nonprofit institutions, it is clear that public and independent nonprofit provision is the defining quality of the current system. Public provision and finance of higher education, while not the original model, has long been the norm.
|
From page 116... ...
Many of those initiatives were implemented through direct government intervention in public institutions where direct consumer demand had long been insufficient to effect change (Gaston, 2001~. Benefits of Public Subsidy A primary argument for public subsidies to students for the purchase of higher education is that such subsidies may reduce underinvestment 116 HIGHER EDUCATION, THE EMERGING MARKET, AND THE PUBLIC GOOD
|
From page 117... ...
GI Bill grants for tuition and living expenses were awarded to individuals rather than institutions and served as a forerunner to the subsequent creation of Guaranteed Student Loans and portable Fell grants in the Higher Education Act of 1965 and subsequent amendments. It is not often noted in contemporary higher education literature on market models and choice that portability of public subsidies originated some 60 years ago and was extended fairly universally nearly 40 years ago.
|
From page 118... ...
The list of private economic benefits that accrue to those with higher levels of educational attainment includes generally higher rates of employment and wages, increased levels of savings, increased labor market mobility, and enhanced working conditions. The public social benefits generated by increased education are manifest in greater civic engagement, higher rates of voting, increased charitable giving and community involvement, and lower public health care costs.
|
From page 119... ...
As policy makers face pressure to increase competition and adopt market models for the organization and finance of higher education, the emerging question is quite basic: What is the public role, and what are the potential impacts of market approaches, on the contributions of higher education to the public good? Given the current organization of the higher education system, attention must also be directed to the future of the nonprofit form in higher education in the United States.
|
From page 120... ...
The Future of Nonprofit Postsecondary Education Calls for market approaches to higher education do not necessarily portend the end of the nonprofit form of provision. It is possible to imagine, at the very least, the elite nonprofit institutions continuing as a dominant form.
|
From page 121... ...
Public and private nonprofit higher education institutions have been key sites of access to leadership positions and greater civic involvement for their graduates (Bowen and Bok, 1998~. Nonprofit institutions have been centers of public social and political efforts to achieve integration and the equalization of access to education.
|
From page 122... ...
(1991~. Guaranteed student loans: Great success or dismalfailure?
|
From page 123... ...
In Higher expectations: Essays on the future of postsecondary education. National Governors Association, March.
|
From page 124... ...
In National Governors Association, Higher expectations: Essays on the future of postsecondary education (pp.
|
From page 125... ...
. Public purpose and private enterprise: The contemporary organization of postsecondary education.
|
From page 126... ...
Winston, G., Carbone, J.C., and Lewis, E.G.
|
Key Terms
This material may be derived from roughly machine-read images, and so is provided only to facilitate research.
More
information on Chapter Skim is available.