A Better Factory Model

By Clive Belfield and Davis Jenkins. Economists are often criticized for treating colleges as if they were factories: using models that evaluate college efficiency in creating outputs (student completions) for a given input (cost). In fact, in many ways a college education is like the factory production process: students start at the beginning and then, after a sequence of “inputs” in the form of courses and support services, some graduate successfully at the end. Unfortunately, economic analyses of college efficiency typically do not look at college as a process. Economic models have traditionally tried to understand college efficiency through a simple input-per-output equation. For example, they may look at a graduation rate in 2012 and compare that to the resources available in the college in 2012. Read more...