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Studies of Supply and Demand in Higher Education

In the United States today, there are some 3,400 separately governed colleges and universities, amounting to a higher education industry with expenditures that constitute 2.8% of the gross national product. Yet, the economic issues affecting this industry have been paid relatively little attention. In this collection of eight essays, experts in economics and education bring economic analysis to bear on such underexamined topics as the nature of competition in higher education, higher education’s use of resources, and who chooses to purchase what kind of education and why.

In higher education, supply refers to such issues as government support for public colleges and universities, the means by which graduate programs allocate financial support to students, and the criteria that universities use for investing endowments. Demand pertains to patterns of student enrollment and to the government, business, and individual market for the service and research activities of higher education.

Why are tuitions nearly the same among schools despite differences in prestige? How are institutions with small endowments able to compete successfully with institutions that have huge endowments? How are race and ethnicity reflected in enrollment trends? Where do the best students go? What choices among colleges do young people from low-income backgrounds face? This volume addresses these questions and suggests subjects for further study of the economics of higher education.

304 pages | 45 line drawings, 60 tables | 6 x 9 | © 1993

National Bureau of Economic Research Project Report

Economics and Business: Economics--Development, Growth, Planning

Education: Education--Economics, Law, Politics, Higher Education

Table of Contents

Introduction by Charles T. Clotfelter and Michael Rothschild
1: The University in the Marketplace: Some Insights and Some Puzzles
Michael Rothschild and Lawrence J. White.
Comment: Martin Feldstein
2: Adolescent Econometricians: How Do Youth Infer the Returns to Schooling?
Charles F. Manski
Comment: Eric A Hanushek
3: Trends in College Entry among Whites, Blacks, and Hispanics
Robert M. Hauser
Comment: Steven V. Cameron and James J. Heckman.
4: The Growing Concentration of Top Students at Elite Schools
Philip J. Cook and Robert H. Frank.
Comment: Malcolm Getz
5: Future Graduate Study and Academic Careers
Jerry R. Green
Comment: Charlotte Kuh
6: How Would Universities Respond to Increased Federal Support for Graduate Students?
Ronald G. Ehrenberg, Daniel I. Rees, and Dominic J. Brewer.
Comment: George Constantinides
7: Optimal Investment Strategies for University Endowment Funds
Robert C. Merton
Comment: George Constantinides
8 Public Choices in Public Higher Education
John M. Quigley and Daniel L. Rubinfeld.
Comment: Helen F. Ladd

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