For those struggling to pay the skyrocketing costs of higher education, the Goldwater Institute has produced a fascinating study showing that the “lion’s share” of expansion in higher education costs comes from the expansion of administration, not teachers.
Between 1993 and 2007, the number of full-time administrators per 100 students at America’s leading universities grew by 39 percent, while the number of employees engaged in teaching, research or service only grew by 18 percent. Inflation-adjusted spending on administration per student increased by 61 percent during the same period, while instructional spending per student rose 39 percent. Arizona State University, for example, increased the number of administrators per 100 students by 94 percent during this period while actually reducing the number of employees engaged in instruction, research and service by 2 percent. Nearly half of all full-time employees at Arizona State University are administrators.
The study goes further to argue that the cause of the expansion in administration is the role of government funding. As universities become more reliant on government funding, they expand administration to deal with the resulting bureaucracy. (It also has the side-effect of burdening the students through the proliferation of bureaucratic procedures and busy-body programs.) The Institute implies, Q.E.D., that reducing the role of government funding would reduce the number of administrators and reign in costs.
For those who have observed the dramatic growth in university administration and bureaucratic management, the Institute’s findings are tempting. But closer examination brings forth some questions.
First, the time period for the study stops in 2007. During the economic downturn since 2008, state funding for public universities has been under very heavy pressure. Dramatic cuts are widespread. If the Institute’s causal argument — that state funding causes administrative bloat — then we should have seen a contraction in administration since 2008 as state funding declined. I haven’t done any kind of rigorous analysis, but I see no sign that this contraction has occurred. That begs an alternative or at least supplementary causal argument for administrative bloat, including consideration of the role of ideology-driven “nanny state” administrative styles on many university campuses.
Second, the study limits its examination to public universities that receive state funding. Thus, it cannot explain the expansion in administration on private university campuses. If state funding were the primary driver of administrative expansion, then why do we also see administrative bloat at universities that do not rely on state funding? Once again, this begs an alternative causal story for the growth in administration in higher education.
Third, the policy implications of the study — that a reduction in state sponsorship would reduce administration and therefore reduce costs — assumes that the growth in administrative bloat is easily reversible. But anyone who has ever dealt with bureaucracies knows that they are “sticky” — once they are brought into existence, they take on a life of their own and are extremely difficult to terminate. The Institute assumes that reducing state funding would force universities to reduce administrative bloat. But it is not overly cynical to argue that many universities would choose (it is the administrators who would be the ones making this choice, after all) to simply shift the costs onto the students by increasing tuition or on to the faculty by reducing tenure-track professor slots and increasing reliance on cheap adjuncts. (Indeed, this has been the exact response from many universities since 2008. Sometimes administrators conceal this effect by announcing only the modest increases in undergraduate tuition while at the same time behind the scenes imposing huge tuition increases on graduate and professional schools.)
The Goldwater Institute is right to focus on the problem of administrative bloat as a driving factor in the escalating cost of higher education. But much more work is necessary to make the Institute’s work relevant to the real problems as experienced on the ground by the students who are paying higher bills with reduced employment prospects at the end of the rainbow.