Thursday, March 01, 2012

A sketch of a model of higher education

I've had a model of higher education rolling around in my head for quite a while now, and I never had the time or energy to put it on paper. But then I read this post by Frances Woolley, which contains some ideas that are extremely similar to mine, so I thought I'd sketch out the basic idea of the model in a blog post.

Woolley asks why research is more important for a professor's career than teaching:

[W]ithin academia, research has higher status than teaching. The question is, why?... 
Perhaps research is highly valued because it is in short supply...But scarcity cannot explain why dime-a-dozen mediocre researchers are accorded higher status than excellent teachers...[and e]ven a scarce commodity will have a low price if there is not much demand for it... 
I think [research has higher status than teaching] is because research output is a signal of ability...Teaching just does not work as a signal in the same way. First, top rate teaching is extraordinarily difficult to measure... 
Second, I don't know if teaching performance is as highly correlated with intelligence, creativity, and originality as research performance is.
Basically, Woolley conjectures that research is valuable as a signal of unobservable teaching skill. I think that this is an excellent answer, for a reason that Woolley doesn't even mention: past research is paid more than future research.

Think about Joe Stiglitz' salary. Stiglitz has, by almost any measure imaginable, done a huge amount of great research. And he gets paid a very high salary. But how much great research do we expect Stiglitz to do in the future? He's old! And he's involved in other things, like speaking, getting involved in policy debates, etc. He is not really getting paid to do research. And, crucially, Stiglitz is getting paid a lot more than any economist whose best research years are ahead of her! If you look at total salary expenditure by universities, my bet is that you will find the same pattern - much more money being spent on past research than on future research.

Of course, from the labor supply side, this still functions as an incentive to do good research (so you can get paid more in the future). But from a demand side perspective, why the heck should a university pay professors for work they did in the past, when they were employed somewhere else? Unless universities are voluntarily internalizing the positive externality from research - i.e. unless universities just want to do good for the world by making research a well-rewarded activity - we must conclude that universities are not actually paying for research.

What are they paying for? I conjecture that they are paying for prestige. If Joe Stiglitz works at my university, it raises my university's prestige.

Why would a university want to raise its prestige? Well, if Woolley's conjecture is correct, prestige is a signal of teaching quality: a Columbia education is generally assumed to be better than an Ohio State education, in part because Columbia has more prestigious professors. So suppose that human capital is very important, but also difficult to observe; in this case, the prestige of your alma mater signals how valuable an employee you're likely to be, because of the fact that education matters, not in spite of it (as in the typical "signaling model" of education).

So here's a question: Why would universities care about prestige? Well, it might allow them to charge undergrads higher prices; Columbia tuition is certainly higher than Ohio State tuition. That in turn might lead to administrators (i.e. the people who make the hiring decisions) getting paid more, particularly if the number of administrators needed is proportional to the number of undergrads (so that higher tuition means higher expenditure-per-undergrad means more expenditure-per-administrator). Administrators trying to maximize their own salaries would then have an incentive to pay a lot of money for someone like Joe Stiglitz. (Full disclosure: I like and admire Joe Stiglitz. And naturally I can't pass up a chance to bag on Ohio State.)

So, to reiterate, here is a sketch of the Noah Smith (or perhaps Smith/Woolley?) Model of Higher Education:

1. The human capital benefit of an undergraduate education is highly sensitive to unobservable differences in teacher quality.

2. Past research accomplishments are a strong signal of teacher quality.

3. Thus, professors with stronger research records allow a university to charge more tuition per undergrad, increasing the salaries of administrators.

4. Although human capital signaling is itself inefficient, this system benefits society by providing a subsidy for the production of research, which as an almost completely nonrival good, is underprovided by the private sector. If teaching quality were observable, this research subsidy would not exist.

5. Extension: America's "legacy student" system (basically, auctioning off a few false ability signals for huge amounts of money, at only a small cost to the school's prestige) gives American universities an edge over foreign universities in terms of prestige, but it also increases the amount that America's university system subsidizes research. This may mean that the legacy system is good for the world.

Anyone can, of course, feel free to take this model and run with it if you like it (and if you do, feel free to include me as a co-author, or not, as you like). It definitely needs some serious empirical work to support each link in the chain. But notice that this model wouldn't just answer the question of why research is paid highly, it would (partially) answer the question of the value of universities to society as a whole, AND the question of why the dual research/teaching structure of the university has proven so durable over the years. And it would possibly point to ways in which the system could be tweaked to boost the degree to which it subsidizes basic research (some of these ways might seem very counterintuitive, e.g. admitting legacy students!).

And if you can see reasons why this model I've sketched is obviously wrong, please let me know, of course.


  1. Anonymous7:19 PM

    "Past research accomplishments are a strong signal of teacher quality"

    Are you sure? I have known many top researchers that were awful professors. It is almost a cliche among students: "Yes, he knows his stuff very well, but does not know how to teach it..."

    There are even cases known by everybody. For instance, John Nash was said to be really bad at teaching.

    On the other hand, there are great teachers that were not strong researchers. In Economics I would mention Paul Heyne.

  2. Anonymous8:15 PM

    "Past research accomplishments are a strong signal of teacher quality."

    Past research accomplishments are a strong signal of success as a PhD advisor. Undergrad teaching skills are not important.

  3. I agree with numbers 3 and 4 of your model but not so much with 1 and 2. The way I see it, professors with impressive research accomplishments bring prestige to a university. I agree with the previous commenters that this research experience isn't important because it's a signal of teaching quality (and even if it was, prestigious professors don't teach undergrads very much anyway). This prestige attracts more undergrads not because it necessarily signals a higher quality education but a more prestigious education, which is where a lot of the value of an undergraduate degree lies anyway. This in turn allows universities to charge more, etc.

    There are positive externalities to this though, namely that prestigious universities are more likely to attract better PhD students and better young professors, who do the most teaching of undergrads anyway. The undergrads get a better education not because they're taught by the prestigious professors but because they're taught by the grad students/young profs who are attracted by the prestigious professors.

    I don't know for sure about this second point, since I don't directly know what attracts high quality grad students/young profs. You probably have a better handle on this given that you just went through the econ job search--does that sound right to you?

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  5. "Past research accomplishments are a strong signal of teacher quality."

    If anything, past research accomplishments are a strong signal of lower teacher quality. Busy researchers tend to have less time for students, be they undergrads or PhDs. That's why there's a distinction between research schools and teaching schools.

  6. I don't know if you've seen this particular paper. But it takes your model in the other direction, yes prestige matters for schools and students, but it doesn't necessarily incentivize efficiency.

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  8. People are disagreeing with idea that past research indicates teacher quality. I can see the logic, the stereotype of old research professors is that they aren't good at, or don't care about, teaching. But the way I read it, the "teacher quality" is really "teacher quality as perceived by potential employers and evidenced by the outcomes of their students." Thus, universities can charge more per undergrad because the students think they will get better jobs, which may be true because employers think that students from those schools are better. Prestige from research seems to cause the appearance of "teacher quality" in the eyes of employers.

  9. Prestige is a signal of valuable *knowledge*, not necessarily the ability to *teach* this knowledge.

    In a few happy instances, one person possesses both the best knowledge and a very strong ability to communicate it broadly. But for the most part these abilities are at best weakly correlated. Forced to choose between professors with the best knowledge and those with the best communication skills, stronger students will make the more challenging but more rewarding choice.

    Then employers pick up the ones who survived the hazing. ;)

  10. I don't think this model will go very far.

    1. lacks empirical evidence, and its not obvious how teacher qualities could be 'unobservable' whilst still having an impact on those taught.

    2. lacks empirical evidence and is strongly counter-intuitive

    3. might be the case in the American system, but the same dynamic of prestige-chasing is seen in other HE systems, such as the UK, where fees are regulated. So this is unlikely to be the most important driver for university managers

    4. See above for teaching quality being observable. It is a matter of values rather than a matter of fact, but I personally don't feel comfortable with the concept that more human inequality (through legacy students and hierarchies of graduate prestige) is 'worth it' because we get a higher subsidy to basic research.

    5. Just because research is non-rival and the market may therefore undersupply, doesn't mean the supply of research actually produced by universities is of benefit to the world. In your model the research is essentially produced to bolster the prestige of individuals and institutions. We should expect research produced for this purpose to be strongly biased towards subjects (and conclusions) considered prestigious in the home (US) culture. Why would such research benefit the world at large?

  11. I commented at the original blog that the theory of high-quality research being easier to evaluate than high-quality teaching is questionable for economics, for the obvious reason. Right now, the question is how much of the past 30 years of macro is garbage, and should be discarded.

  12. Anonymous9:13 AM

    I'm flummoxed by these comments. I was going to say "this is the obvious intuitive explanation and seems non-novel and trivial." But now everyone says it's counterintuitive. So, I guess, publish!

    If I were writing this up I'd delete all the references to teaching and just treat prestige as a question of status affiliation rather than actual increase (as opposed to signaling) in human capital.

  13. How do you fit 4 into a continental west european setting, where almost all the best universities are public, close to free, but still reward past research more than future research?

  14. Already been said but I'll add my vote in.

    Better researcher is automatically a red flag for me (as an economics undergraduate) that this person sucks at teaching. The only thing I want in the future from this person is a strong LOR, and that's it.

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  17. Noah, I agree with your point that prestige matters. But not because it signals quality teaching. Rather, prestige can matter for its own sake. I think undergraduates (in fact, all of us) will pay to be around prestige. Hence, I would change your first two points to read as:

    1. The returns to being near prestigious people are high. It could be as simple as getting a letter of recommendation from them or the belief that they will inspire/motivate/alter your future direction.

    2. Past research accomplishments are a strong signal of prestige

  18. Anonymous1:53 PM

    A simpler model for why universities value research over teaching is that research brings in money in the form of overhead from grants to support the university. MIT brought in over $700 million in research funding in 2009 and has an overhead rate of over 50%.

  19. Anonymous4:34 PM


    Have you seen the meme:

    "Publishes in worlds top journals"

    "Spends 20 minutes turning on projector"

  20. Noah, interesting post, and thanks for the cite. You wrote "Basically, Woolley conjectures that research is valuable as a signal of unobservable teaching skill."

    I don't know if that's exactly it, though that's part of the story, for sure.

    Think of it as a variation on the newly-wed game (sometimes called the baseball v. ballet game, something like that). High ability people all want to go to Highrank U. Research = prestige = a way that high ability people can all coordinate on Highrank U. Football could play a similar role, and arguably does in the US context.

    Now if only I could find some way of translating your post into something that bumps up my bibliometric scores ;-)

  21. I attended CMU, where close to half the faculty are researchers who do no teaching at all. And it was expressed to me at some point either as a freshman or prospective student that they preferred the teaching to be done by people who were good at teaching and the research to be done by people who were good at research, and they really didn't expect everyone to be both.

    I'm going to propose two alternate theories:

    1. Researchers draw top students because students want to go somewhere where there will be lots of opportunities to be a part of cutting edge research as assistants or possibly eventually as grad students. Also, lecturers that are surrounded by people working in the cutting edge of their fields will be better lecturers, and will also have opportunities to bring in researchers as guest lecturers from time to time. In my experience researchers do add some value in these ways.

    2. Research is about buying prestige, in the form of name recognition. So every news story that begins "Researchers at University X..." helps create an impression among potential employers that some pretty cool stuff goes on at University X and if you went there you might have done some cool stuff. A test of this is that there is only room in the public consciousness for so many schools, so the ones competing for the top ranks have a very strong incentive to invest in research, but second tier schools have far less incentive.

  22. "So here's a question: Why would universities care about prestige?"

    I think you take this one step too far. Universities do not care about prestige in order to get money. Prestige/status is the end goal, they raise money to get prestige. Prestige allows you to get invited to brief presidents and congressmen. It allows appointments to panels and positions that give you power. And the exercise of power is innately powerful. Prestige gives you a dopa-mine hit when you mention where you work. It helps get you laid. It helps get you taken seriously by whoever talks to you. It makes your mother and father proud. Everyone from a junior administrator to a full professor to a trustee innately cares about raising prestige.

    Renowned professors increase the prestige of the university. They also help attract the best students. The best students are those who will grow up to promote the prestige of the university - either by achieving powerful positions, doing famous work, or making money and giving it back to the university. Having a solid portion of legacy students is great because they give a lot of money, plus they infect everyone around them with a sense of loyalty to the university.