The Man Who Shed Light On Why College Keeps Getting More Expensive

Oct 25, 2016
Originally published on October 25, 2016 9:30 am

William Bowen, a scholar and former president of Princeton University, died last week. He is associated with one of the key explanations for just why a college degree keeps getting more and more and more expensive.

Bowen, who was President of The Andrew W. Mellon Foundation, and before that, led Princeton from 1972 to 1988, died Oct. 20 at the age of 83.

An economist by training and a decorated scholar of higher education, Bowen worked to make Princeton more inclusive and wrote two important books on diversity and affirmative action.

He was hardly a household name, but if you have a kid who wants to go to college, you should know a little bit about him.

Back in 1966, Bowen published a study, Performing Arts: The Economic Dilemma, co-written with fellow Princeton economist William Baumol. The nation, and the world, was already in the midst of a radical economic transformation that continues today, bringing down the costs of many goods through two powerful forces: globalized trade and automation.

However, Bowen and Baumol pointed out that there were certain special areas of the economy where those two forces just didn't seem to apply. In their book, they used the example of a string quartet.

You can't increase the "productivity" of a string quartet by playing Mozart at a higher tempo, the way you can speed up an assembly line.

You can't increase the "efficiency" of a string quartet by cutting the cello player and replacing her with a prerecorded track.

And, you can't take advantage of lower wages for classical musicians in China, not if you want a live concert at Carnegie Hall.

In short, the authors argued, the cost of direct services provided by highly skilled workers is always going to rise faster than the general rate of inflation.

In subsequent work, this effect, dubbed "Baumol's cost disease," was extended from theater, opera, music and dance to medicine and, yes, education.

Just as it was five decades ago in 1966, the fundamental metric of value in higher education today is still the faculty-to-student ratio. In other words, we're still generally looking at college as a direct service provided by the hour by a highly skilled worker.

Over these decades, colleges have cut their relative spending on instruction by employing adjunct instructors and teaching assistants for less money than tenure-track professors. They've tried to raise productivity by increasing the average number of classes those instructors are required to teach. Some have increased class sizes. But all of these moves are generally seen as lowering the quality of the education on offer.

In one of his final books, Higher Education In The Digital Age, based on lectures he gave at Stanford in 2012, Bowen explored whether technology could finally cure the "cost disease." Could innovations such as free, video-based Massive Open Online Courses lower the cost of teaching without compromising quality? Bowen was optimistic, but he raised the same point that many others have: It won't happen without a concerted effort to rethink how instruction is delivered, and it won't happen automatically, without concentrating directly on lowering costs.

Meanwhile, the average charges for tuition, fees and room-and-board (which is not identical, and in most cases far less, than the actual cost of producing an education) rose from $9,685 in 1966-67 to $20,234 in 2012-2013 (the last year available) in constant dollars — that's a 208 percent increase on top of inflation. And an economic dilemma indeed.

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