[lbo-talk] MH & DG on university

[shag carpet bomb]

you seem to be illustrating what I mean. In the good old days, there was a 
lot more funding. I was told that the retrenchment unis saw in the 1980s 
was partially about the severe decline of funding - such as the NIH studies 
on alcoholism my department used to do. I know they would go after it big 
time, and I recall working for a Spencer grant recipient who, upon 
receiving it, negotiated a deal with the uni that they wouldn't take the 
20% off the top they normally do. When that funding declines, unis don't 
just lose money to support the research, but they lose the 20% (and more?) 
they take out of the grant to pay for labs, etc.

No idea what's going on these days, so I'm wondering: has it declined? One 
uni wouldn't suffice, we'd have to look at global trends, no?

At 01:03 PM 2/27/2012, Wojtek S wrote:
>Shag: "the decline of research grant funding from government/NGO
>sources (started in the 80s with the waves of retrenchment shutting
>down what were once well-funded research programs sponsored by NIH,
>for instance.)"
>
>[WS:]  I am not sure about this.  JHU receives over 50% of its revenue
>from this source, and only about 12% from tuition, and I suspect it is
>not that much different from other private research universities.
>
>My own hypothesis is a bit different - it is a version of the Baumol
>effect http://en.wikipedia.org/wiki/Baumol's_cost_disease.  Unis are
>labor intensive and cannot increase labor productivity the way
>industry does.  In the "good old days" some teaching was subsidized by
>research and government, but with expansion of teaching (i.e. more
>students being admitted) the marginal increase of cost of that
>teaching would have to be covered solely by tuition increases,
>assuming that the research funding and government grants remain
>constant.  If they are cut, however, the unis have to pass this
>decrease on the tuition in addition to covering marginal increase in
>the cost of teaching due to increased enrollment.
>
>Another element is linked to competition among unis.  To attract
>students they need to invest into various amenities (recreational
>facilities, celebrity faculty, services, etc.) and that has to be
>covered solely by tuition or private grants, since research grants
>(esp. government research grants) cannot be used for this purpose.
>The expansion into real estate market that you mention would fall into
>this category, I think.
>
>Finally, there is competition form private industry.  In order to
>attract celebrity faculty, they need pay competitive salaries, but
>they cannot get greater productivity out of them the way industry can
>(consistently with the Baumol effect.)  This is particularly the case
>of fields like law, economics, medicine or engineering, where
>opportunities for industry employment are greater than in liberal arts
>or social sciences.
>
>Wojtek
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