Michael Smith wrote:
> Doug's paper noted the decreased government support for colleges. Yet
> at the same time -- if I'm doing the numbers right --
> constant-dollar expenditures per student appear to have climbed steadily
> since around 1980, both in public and private universities, with the
> slack of course being taken up by the students and their families:

Could this be the result of Baumol's "cost disease of the service
sector" where rising wages in the goods-producing sector (in which
labor productivity rises) bleed over into the service sector (where
productivity growth is flat, since it's so hard to raise productivity
there), so that unit labor costs in the latter rise relative to those
in the former?

Of course, these days, wages don't seem to be rising that much in the
goods-producing sector. I'd blame all the overhead costs
(administrators, insurance, lawyers, etc.) for education inflation.
-- 
Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own
way and let people talk.) -- Karl, paraphrasing Dante.
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