Arnold Kling  

State Universities vs. Vouchers

PRINT
Growth Inhibitors in Europe... A Nation of Entrepreneurs?...

The fifty states use a variety of methods to subsidize higher education, but the most popular seems to be a subsidy for in-state students to attend specific public institutions. Bridget Terry Long compares this approach with a voucher program.


up to 24 percent of first-year students would no longer choose a public, four-year school if given the money as a voucher that could be applied to any in-state college (the decrease is smaller if the voucher were twice as large for four-year colleges). As a result, the number that would choose to enroll in private four-year would increase 20 to 29 percent. Given enrollment rates in 1992, this suggests that an additional 80,000 to 120,000 freshman would prefer to attend a private four-year college each year.

Tyler Cowen believes that private universities offer higher salaries to better faculty. He writes,

I expect that over time, for better or worse, many state universities will in effect become privatized. They will remain under nominal state control, but their finances will rely increasingly on private sources of support.

A voucher system would have the effect of removing the state control while allowing for combination of private and public support.

UPDATE: A reader sends in a link to an article describing South Carolina Governor Mark Sanford's proposal that state colleges be allowed to privatize.

For Discussion. What are the pros and cons of using vouchers for higher education rather than direct subsidies to state institutions?


Comments and Sharing





COMMENTS (22 to date)
Eric Krieg writes:

>>I expect that over time, for better or worse, many state universities will in effect become privatized. They will remain under nominal state control, but their finances will rely increasingly on private sources of support.

There is nothing here to speculate upon. This is exactly what is already happening. States all across the country are decreasing their support to their state schools, and private sources like endowments are taking up the slack.

JC Bradbury writes:

Great link and great site.

FYI, the SC governor is proposing to privatize some of SC's universities.

Lawrance George Lux writes:

Eric,
I don't know whether your expectation is solving the problem, or running away from it, only Time will tell.

I do think real progress could come through setting higher standards for admittance. I think State Universiities should set Enrollment limits, and insist all positions be allotted by Competitive testing. lgl

rvman writes:

When I was a National Merit scholar from Texas, I received a "Texas Tuition equilization grant" because I went to a private university inside Texas. It paid for most of the difference between in-state UT tuition, and the private school's tuition. Kind of a voucher for top students. (Maybe if we start calling them "scholarships" instead, people would support vouchers more.)

Bernard Yomtov writes:

Are states now using their control over public universities unwisely? Some state universities are very highly regarded, and in general there doesn't seem to be a huge level of dissatisfaction with public higher education. To the extent they are being unwise, are you so sure a voucher program would help matters?

After all, there would presumably be some requirements schools would have to meet to be eligible to participate in the voucher program. With vouchers all schools in the state would likely have to meet these requirements as a competitive matter.

Why would this level of control be less onerous than what is in place now with respect to state schools? Given that the legisalture would set these requirements isn't there still the possibility of some serious abuses of power?

Eric Krieg writes:

There are two questions I would like answered about the move towards privatizing state universities and offering vouchers.

1) How much control over the state schools is the legislature going to give up?

2) How much interference from the legislature will there be attached to those vouchers?

Stanley Fish just resigned as Dean of A&S at the University of Illinois at Chicago over this very issue. Illinois is in a fiscal crisis, and aid to the U iof I system is down significantly. Many of his pet programs are being gutted, so he is leaving.

Eric Krieg writes:

>>Are states now using their control over public universities unwisely?

The problem is this: if states are only contributing a small (say less than 25%) percentage of a school's budget, does it make any sense to even call it a state school?

There is a lot of state politics involved in this issue, and I am sure every state is different. In the SUNY system, tuition from all schools used to be thrown into one statewide pot. Schools that juiced up their enrollments didn't get any extra revenue, and there was no incentive to excell.

Recently, the rules were change so that the schools retained their tuition internally. This has hurt the smaller SUNY schools, but has greatly improved the big university centers.

My alma matta, SUNY Buffalo, has made out like a bandit from the change. Revenue from increased enrollment has been flowing in like a tidal wave. This, combined with a rising endownment, has allowed them to expand and build new facilities on an almost unprecedented scale.

New York State has also given the SUNY schools much more freedom to determine their own fate. There is much less meddling in day to day affairs by Albany.

The question that should be asked is, does this all make for a better education. Spending is being increased, even if it isn't coming from tax revenues. Does that increased spending improve education, or is it a big waste of time and money?

Monte writes:

George,

"I do think real progress could come through setting higher standards for admittance. I think State Universiities should set Enrollment limits, and insist all positions be allotted by Competitive testing."

I'm sure there's no intention on your part, but this sounds somewhat elitist. Alloting academic positions by testing ensures the best and brightest receive higher educations, but effectively limits educational opportunities
for the average student. The most productive members of society are not necessarily those who possess higher IQ levels.

It's possible I'm missing your point, however. Are you suggesting that standards have been lowered over time to the point of admitting unqualified students? If so, I digress.

Eric Krieg writes:

>>The most productive members of society are not necessarily those who possess higher IQ levels.

And the proof of this is... what?

Income is highly correlated to IQ. Income is one measure of productivity. Thus, the most productive members of society are those who possess higher IQ levels.

But I like your point anyway. The only way to address income inequality is to promote education across our entire society. I think that the best way to do this is affirmative action based on family income. Low income students should be given preferential treatment towards admissions to universities.

After all, the high IQ students and high income students are going to go to school SOMEWHERE. Not so the lower income kids.

Monte writes:

Eric,

“Income is highly correlated to IQ. Income is one measure of productivity. Thus, the most productive members of society are those who possess higher IQ levels.”

Productivity and income are but two of many IQ correlates. In fact, some research suggests IQ is weakly correlated to job performance. Other individual characteristics such as wisdom, creativity, practical knowledge, and social skill are probably of equal or greater importance, which conventional IQ testing fails to account for.

Lincoln, Edison, Ford, and (one of my favorites) Henry Hazlitt all lacked formal educations, but went on to achieve great fame and success. Jung and Churchill despised and feared math. Agatha Christy, Mary Kay… All of these provide further proof that standardized testing is no respecter of intelligence or productivity.

The point is that education, particularly in today’s job market, creates opportunities that shouldn’t be limited mostly to individuals with high IQs, which competitive testing would ultimately result in.

Bernard Yomtov writes:

"Illinois is in a fiscal crisis, and aid to the U iof I system is down significantly. Many of his pet programs are being gutted, so he is leaving."

But a voucher program wouldn't avoid funding problems. The state can cut the value of the vouchers as easily as it can cut its contribution to the university.

I'm really having a hard time seeing what the big deal is here. I have no trouble believing that the relatively low cost of state schools encourages students to go there, and that they would make different choices under a different system. That's common sense - no logit models needed. And common sense also suggests that universities have physical constraints on the number of students they can enroll - something the paper seems to overlook.

We have a pretty successful system of state universities in place. Isn't this a classic case of "if it ain't broke, don't fix it?"

rvman writes:

To the extent IQ is a weak indicator of job performance, it is because IQ has already sorted into the jobs they are performing in. If the high-IQ guy is in tech research, mid-IQ guy in management, and low-IQ guy in janitorial, than performance is going to be measured relative to other tech researchers, managers, and janitors, and thus is going to be explained by other forces than IQ. (For example, the middle-IQ guy who "makes it" in research is going to be the hard-working sort who would also kick a** as a manager or janitor. The high-IQ guy in janitorial, OTOH, will be Mr. Slacker, and may not produce a lot as a janitor.)

Eric Krieg writes:

>>Lincoln, Edison, Ford, and (one of my favorites) Henry Hazlitt all lacked formal educations, but went on to achieve great fame and success.

Yeah, but do you think that any of these men had even average IQs?

And do you think that, if they grew up today, they WOULDN'T get a formal education.

Eric Krieg writes:

>>In fact, some research suggests IQ is weakly correlated to job performance.

IQ is highly correlated to job performance. The data artifact that the studies you cite are measuring is that job classifications themselves are highly segregated by IQ. For example, there are no doctors with 100 IQs. But among doctors, there may not be a big difference in the performance of a doctor with a 140 IQ vs. one with a 145 IQ, or whatever.

Eric Krieg writes:

>>The point is that education, particularly in today’s job market, creates opportunities that shouldn’t be limited mostly to individuals with high IQs, which competitive testing would ultimately result in.

Agreed. Everyone needs education, and those from lower income backgrounds should be given more educational opportunities to make up for their income (and IQ) disadvantages.

Eric Krieg writes:

>>We have a pretty successful system of state universities in place. Isn't this a classic case of "if it ain't broke, don't fix it?"

The flagships may be good, but I doubt that the second and third tier schools are all the great. You know, the difference between Berkely and Cal State Chico.

The reason that the voucher is a nice idea is that, with state support of state universities at almost trivial levels in many cases, what is the point of even having a state school? Why not level the playing field and not even pretend that the "state school" is any different that the "private" school.

Monte writes:

“Yeah, but do you think that any of these men had even average IQs?”

That might have been their result using standardized testing.

“And do you think that, if they grew up today, they WOULDN'T get a formal education.”

It would depend a great deal on socioeconomic status, as it does for many of the less fortunate today.

“IQ is highly correlated to job performance. The data artifact that the studies you cite are measuring is that job classifications themselves are highly segregated by IQ.”

>>Scores on intelligence tests predict various measures of job performance: supervisor ratings, work samples, etc. Such correlations, which typically lie between r=.30 and r=.50, are partly restricted by the limited reliability of those measures themselves. They become higher when ris statistically corrected for this unreliability: in one survey of relevant studies (Hunter, 1983), the mean of the corrected correlations was .54. This implies that, across a wide range of occupations, intelligence test performance accounts for some 29% of the variance in job performance.

Although these correlations can sometimes be modified by changing methods of training or aspects of the job itself, intelligence test scores are at least weakly related to job performance in most settings. Sometimes 19 scores are described as the 'best available predictor" of that performance. It is worth noting, however, that such tests predict considerably less than half the variance of job-related measures. Other individual characteristics such as interpersonal skills, aspects of personality, etc., are probably of equal or greater importance, but at this point we do not have equally reliable instruments to measure them.http://www.mugu.com/cgi-bin/Upstream/neisser-apa-IQembedded=yes&cumulative_category_title=Introduction%3BSubjects%3BHumanities%3BPsychology%3BIQ&cumulative_category_id=Root%3BLibrary%3BHumanities%3BPsychology%3BIQ

Monte writes:

Correction to link above:

http://www.mugu.com/cgi-bin/Upstream/neisser-apa-IQ?embedded=yes&cumulative_category_title=Introduction%3BSubjects%3BHumanities%3BPsychology%3BIQ&cumulative_category_id=Root%3BLibrary%3BHumanities%3BPsychology%3BIQ+

Bernard Yomtov writes:

Eric,

So what you're saying is that if the state isn't going to fund education very well it may as well not fund it with vouchers as with direct subsidies. Hard to disagree.

Monte,

I think you're missing Eric and rvman's point on IQ/perfomance correlation. A variable may be highly correlated with performance in a specific area, but once you filter out all people outside of a narrow range the correlation seems to go away. Height is correlated with performance at basketball, but if you only look at players who are 6-10 or more, the correlation will show up weakly, if at all, because you've compressed the range of values you're looking at. Throw a proportionate number of guys 5-8 in the sample and see what happens.

The same thng applies to, say, nuclear physicists. There's no way to know how people of average intelligence do as nuclear physicists, because there aren't any. You're looking at a narrow range of IQ. The performance difference between the 148 and the 150 is going to depend on things like hard work and luck rather than IQ, so IQ will seem to be weakly correlated with performance. But it's not. It only looks that way because by studying nuclear physicists you've already thrown out most lower IQ cases.

Monte writes:

Bernard et al,

Understand about job classification and statistical significance within a specified range (doctors vs. ditchdiggers). My point is that emotional intelligence (wisdom, creativity, personality, social skill, etc.) is not factored into standardized (psychometric/congnitive) testing, which (according to the study cited)presumably accounts for the weak correlation between IQ and job performance.

Eric Krieg writes:

>>which (according to the study cited)presumably accounts for the weak correlation between IQ and job performance.

Nothing predicts job performance MORE than IQ. At a range of IQs, other factors come into play.

BUT...

We were talking about the overall population, NOT performance between individuals within a certain job classification. Thus, IQ IS strongly correlated to income.

By creating a meritocracy, using tests to give more opportunity to those with more ability (more IQ, in this case), you increase inequality. This was a major point of "The Bell Curve", one that got overlooked because of the incindiary points about IQ and race.

Of course, I would expect the libertarian economist to explain how the mean is still better off in a meritocracy, even if the bell curve is wider and flatter, or even double humped.

Eric Krieg writes:

>>So what you're saying is that if the state isn't going to fund education very well it may as well not fund it with vouchers as with direct subsidies. Hard to disagree.

I think that it is probably in the top tier state schools favor that vouchers be used. What they lose in direct aid can be made up with in freedom.

The only losers I see are the lower tiered state schools. And just like public schools, vouchers would makre them have to compete more, or go out of business.

Comments for this entry have been closed
Return to top