Subsidizing Inefficiency

From The Heritage Institute:

Subsidizing Inefficiency


“Between 1993 and 2007, the number of full-time administrators per 100 students at America’s leading universities grew by 39 percent, while the number of employees engaged in teaching, research or service only grew by 18 percent,” reports Jay P. Greene:



Inflation-adjusted spending on administration per student increased by 61 percent during the same period, while instructional spending per student rose 39 percent. Arizona State University, for example, increased the number of administrators per 100 students by 94 percent during this period while actually reducing the number of employees engaged in instruction, research and service by 2 percent. Nearly half of all full-time employees at Arizona State University are administrators.



How can that be? The answer, explains Greene, is that federal subsidies for higher education insulate students from the costs of the administrative bloat. A sector that has no cost-conscious consumers is not going to be disciplined—a lesson that probably explains some things about health care, too.



Posted on 08/20/10 10:16 AM by Alex Adrianson