While acknowledging that tuition and fees at colleges and universities have been rising faster than the rate of inflation, authors Robert Archibald and David Feldman (Professors of Economics at William and Mary College) oppose the view, increasingly espoused by economists such as Richard Vedder, that higher education is increasingly dysfunctional. Instead, their argument is that costs for colleges have risen as a natural byproduct of a growing economy.
I recently read their interesting book Why Does College Cost So Much? and was grateful that Dr. Archibald was willing to answer a few questions for us.
On pages 84-85, you give a three-part summary of your argument as to why college costs are rising faster than inflation. Ultimately, you write that the cause is economic growth itself. What do you mean?
Economic growth is fueled by productivity change. To have growing income per person a country needs to have growing income per worker. As we explain, the productivity growth that fuels economic growth is not shared evenly by various industries. Some industries, most in manufacturing and agriculture, have had rapid productivity growth, and other industries, most services, have had little if any productivity growth. The productivity growth in manufacturing and agriculture holds down the prices in these industries. This does not happen in service industries such as higher education. The result is that Continue Reading…