October 07, 2018
Financial Times: White House Considered Blanket Ban on Student Visas for Chinese Nationals, partly with goal of hurting Universities (Michael Simkovic)
From the Financial Times:
"White House hawks earlier this year encouraged President Donald Trump to stop providing student visas to Chinese nationals, but the proposal was shelved over concerns about its economic and diplomatic impact. . . .
Stephen Miller, a White House aide who has been pivotal in developing the administration’s hardline immigration policies, pushed the president and other officials to make it impossible for Chinese citizens to study in the US, according to four people familiar with internal discussions. . . .
While the debate was largely focused on spying, Mr. Miller argued his plan would also hurt elite universities whose staff and students have been highly critical of Mr Trump, according to the three people with knowledge of the debate.
The issue came to a head in an Oval Office meeting in the spring during which Mr Miller squared off with administration opponents, including Terry Branstad, the former Iowa governor who is US ambassador to China.
According to the four people familiar with the discussions, ahead of the Oval Office meeting Mr Branstad argued that Mr Miller’s plan would take a much bigger toll on smaller colleges, including in Iowa, than on wealthy Ivy League universities. US embassy officials in Beijing also made a broader economic argument that most American states enjoy service-sector trade surpluses with China, in part because of spending by Chinese students.
Mr Branstad succeeded in convincing the president that Mr Miller’s proposal was too draconian, according to one person familiar with the White House showdown. At one point, Mr Trump looked at his ambassador and quipped: “Not everyone can go to Harvard or Princeton, right Terry?”
One person familiar with the debate said Mr Miller’s opponents were worried the president might return to the issue, particularly as he takes an increasingly tough line on China over everything from trade to cyber security.
September 29, 2018
Public pension funds in New York and California are increasingly considering Climate Change related risks as a criteria for guiding their investment decisions. The move to consider climate change is driven in part by a perception of insufficient federal action on these issues and the prospect of environmental harm eroding long term performance for a diversified portfolio of investments.
Should university endowments also emphasize ESG considerations?
Comments are open and moderated. Real names only, please.
September 27, 2018
Testimony before the House Judiciary Committee on the "State of Intellectual Freedom in America" (Michael Simkovic)
I testified earlier today at the House Judiciary Committee on the "State of Intellectual Freedom in America." A copy of my written testimony can be seen here. My shorter oral remarks are available here.
An excerpt appears below:
"Disagreement between knowledgeable scientific experts and median political views often do not suggest political bias on the part of scientists, but rather an effort by think tanks, media organizations, interest groups and politicians to inappropriately politicize scientific issues.
For example, the causes and consequences of Climate Change are scientific issues. The likely economic harm from such changes, and the costs of preventing or mitigating them, are also scientific issues. So are the adverse health consequences from air and water pollution or the health effects of smoking. So is the question of whether tax cuts can generate enough economic growth to reduce the Debt-to-GDP ratio.
While scientific questions can have political and policy implications, scientific inquiry should not be politicized. The best evidence should be analyzed with the best methods, and the implications and degree of uncertainty honestly conveyed to policymakers and the public.
But according to scientific experts, many scientific issues have been inappropriately politicized when scientific evidence threatened private sector profits or government budgets. These issues include the causes and effects of climate change, the health risks of pollution, and the dangers of tobacco use.
According to a Pew survey, nearly 80 percent of scientists believe that previous administrations suppressed government scientists’ findings for political reasons. Many scientists worry that suppression of scientific findings for political reasons is becoming more common.
Note that the Pew sample consists overwhelmingly of natural or “hard” scientists in fields such as medical sciences, chemistry, physics and geosciences. Pew’s sample included those who work in private industry as well as those who work in government and universities.
Recently, there have been systematic efforts by some members of Congress to weaken the role of science in informing agency rule-making and increase the role of political actors. Some politicians have also sought to prevent government agencies from collecting basic data about demographics, the environment, health and safety, and the economy, even if de-identified to protect individual privacy.
Today, threats to academic freedom can come from powerful donors, political leaders, and outside pressure groups who sometimes seek to subtly (or not so subtly) influence ostensibly neutral and unbiased academic research to further their own business interests or other political preferences.
The best way to protect universities from undue influence may be to secure and expand revenue sources that are indifferent to or cannot sway the conclusions of academic research. This is analogous to the approach we take to try to protect the independence of members of the federal judiciary or the Federal Reserve."
September 25, 2018
A recent working paper by Caroline Hoxby (Stanford) suggests that the economic returns to online education (measured in terms of wage growth) may be too low to recoup the costs of these programs, especially as administered at for-profit institutions. Hoxby used a fixed effects approach, measuring earnings before and after online education compared to likely earnings without online education. She found that online education does not boost earnings by very much, and it does not do much to move students into more lucrative industries or occupations. Hoxby found evidence that most students pursuing exclusively online degrees lived within commuting distance of brick-and-mortar institutions that likely offered higher quality education with better returns.
Hoxby's observational results are consistent with experimental studies that have found worse outcomes for students randomly assigned to online education compared to traditional education.
In previous research, Hoxby warned that the spread of online education could undermine highly selective institutions' ability to finance original research and teaching innovations. Hoxby wrote: "selective] institutions weaken rather than strengthen their market power in research and original content creation when they increase their exposure on the internet."
Hoxby's working paper has been criticized by groups advocating partnerships between for-profit technology companies and educational institutions to spread online education to non-profit and public institutions. For-profits have been online education's earliest and most enthusiastic adopters, while private non-profit and public institutions have generally taken a more conservative approach. The strongest of the critiques of Hoxby's paper is that it looked at returns over the course of 10 years rather than a lifetime. The present value of lifetime earnings premiums is a more appropriate measure of the returns to education.
Related coverage: Should online education come with an asterisk?
September 23, 2018
Think tanks, CBO dramatically overestimated the direct budgetary costs of Public Service Loan Forgiveness (Michael Simkovic)
I've previously noted some of the outrageously implausible assumptions used by organizations with links to private student lenders (such as the New American Foundation, AEI, Brookings, Manhattan Institute, and Barclays) in an apparent effort to portray federal student loans as a threat to the public fisc. Such studies have been used to justify increases in federal student loan interest rates, credit rationing (borrowing caps), and a less accommodative policy with respect to income based loan forgiveness.
A new government report suggests that these groups may have also over-estimated the costs of Public Service Loan Forgiveness (PSLF). PSLF is distinct from income-base repayment programs (IBR). Whereas IBR is intended as insurance for student loan borrowers against relatively low earnings persisting over the course of a 20 year period, PSLF is intended as a wage subsidy to encourage highly educated skilled workers to accept public sector and non-profit jobs and continue to work in them for at least 10 years.
Early estimates had wildly exaggerated the cost of PSLF, assuming that 25 percent of student loans would be discharged through these programs within 10 years, since at any one time around 25 percent of the workforce works in the public sector.
There are numerous problems with this estimate: graduates transition in and out of the workforce; graduates move between the private and public sectors; not all public sector work qualifies for PSLF. It will therefore take far more than 10 years after graduation for many borrowers to accumulate a sufficient period of time working in qualifying public sector jobs before they can earn forgiveness. During this time period, borrowers continue to make student loan payments, decreasing the budgetary costs of eventual debt forgiveness. The eligibility and documentation requirements for PSLF are also stringent, further disqualifying many applicants.
According to the government report noted above, in the first year in which graduates could potentially qualify, only 28,000 borrowers applied and only 96 (less than 0.5%) qualified for forgiveness. 28 percent of applications were disqualified for missing information, while over 70 percent were disqualified because they had not yet met the program eligibility requirements.
The total balance forgiven in the first half of 2018 was $5.52 million dollars. The CBO, relying in part on assumptions advocated by think thanks, had estimated that the program would cost $425 million in 2018, and nearly $24 billion within 10 years.
While qualifying applications are likely to grow in the coming years, the contrast between the high estimated cost and the low actual cost thus far is striking.
September 20, 2018
Why do some college students choose law school over other advanced degree programs? (Michael Simkovic)
The AALS today released a new report, Before the JD: Undergraduate Views on Law School, based on a survey with responses from 22,0000 college students and 2,700 law students. The report discusses, among other things, the considerations that might drive college students pursuing advanced degrees to apply to law school over other advanced degree programs, when students first contemplate going to law school, and important sources of information and advice about law school and other advanced degrees to which undergraduates turn.
Some interesting findings include:
- Students considering law school are also likely to consider a PhD, Masters Degree or MBA instead of a law degree, but are much less likely to consider Medical School
- Only 15 precent of students considering a graduate degree were considering a law degreee
- Law was seen as better preparation for a career in politics, government, or public service than other options
- Compared to other advanced degrees, students are less concerned about time to completion for law degrees, but students are more concerned about work life balance in law than in other fields
- Debt /cost was slightly less of a concern for a law degree than for other advanced degrees
- Students interested in law school developed this interest early, often even before attending college
- Law was not seen as using cutting edge technology as much as other fields
September 06, 2018
Jason Stanley (Yale): Universities should resist government and donor pressure to reinforce propaganda (Michael Simkovic)
In the Chronicle of Higher Education, Yale philosophy Professor Jason Stanley warns about rising neo-fascist tendencies around the world and related efforts to deligitimize universities. Of particular interest to readers of this blog, Stanley recommends against appeasing critics by hiring faculty members who will promote viewpoints that are popular with donors or political leaders. He instead advocates retaining a strictly merit-based approach to academic hiring, protected from outside influences.
Professor Stanley writes:
"In recent years, several countries across the world have been overtaken by a certain kind of far-right nationalism; the list includes Russia, Hungary, Poland, India, Turkey, and the United States. . . . [P]atterns have emerged that suggest the resurgence of fascist politics globally. Increasingly, attacks on universities and conflicts over their policies are a symptom of this phenomenon. . . [M]y interest is in fascist politics as a mechanism to achieve power. . .
Honest politics needs intelligent debate. One of the clearest signs of fascist politics, then, is attacks on universities and expertise — the support systems of discussion and the sources of knowledge and facts. Intelligent debate is impossible without access to different perspectives, a respect for expertise when one’s own knowledge gives out, and a rich enough language to precisely describe reality. When education is undermined, only power and tribal identity remain.
This does not mean that there is no role for universities in fascist politics. In fascist ideology, only one viewpoint is legitimate. Colleges are meant to introduce students to the dominant culture and its mythic past. Education therefore either poses a grave threat to fascism or becomes a pillar of support for the mythical nation. It’s no wonder, then, that cultural clashes on campuses represent a true political battleground and receive national attention. The stakes are high. . . .
Where speech is a right, propagandists cannot attack dissent head-on; instead they must represent it as something violent and oppressive (a protest therefore becomes a "riot"). . . .
Fascist politics seeks to undermine the credibility of institutions that harbor independent voices of dissent. One typical method is to level accusations of hypocrisy. Right now, a contemporary right-wing campaign is charging universities with hypocrisy on the issue of free speech. Universities, it says, claim to hold free speech in the highest regard but suppress any voices that don’t lean left. Critics of campus social-justice movements have found an effective method of turning themselves into the victims of protest. They contend that protesters mean to deny them their own free speech. . .
These accusations also extend into the classroom. . . . a far-right activist who has been targeting universities . . . published a book, The Professors, naming the "101 most dangerous professors in America," a list of leftist and liberal professors . . . The goal of Students for Academic Freedom is to promote the hiring of professors with conservative worldviews, an effort marketed as promoting "intellectual diversity and academic freedom at America’s colleges and universities," according to Young America’s Foundation. . . .
Some will argue that a university must have representatives of all positions. Such an argument suggests that being justified in our own positions requires regularly grappling with opposing ones (and that there was no room for those views in the first place). . . . Nevertheless, the general principle, upon reflection, is not particularly plausible.No one thinks that the demands of free inquiry require adding researchers to university faculties who seek to demonstrate that the earth is flat. Similarly, I can safely and justifiably reject ISIS ideology without having to confront its advocates in the classroom or faculty lounge. I do not need to have a colleague who defends the view that Jewish people are genetically predisposed to greed in order to justifiably reject such anti-Semitic nonsense. Nor is it even remotely plausible that bringing such voices to campus would aid arguments against such toxic ideologies. More likely, it would undermine intelligent debate by leading to breakdowns of communication and shouting matches.
Universities should supply the intellectual tools to allow an understanding of all perspectives. But the best way to achieve that is to hire the most academically qualified professors. No method of adjudicating academic quality will be free from controversy. But trying to evade that difficulty by forcing universities to hire representatives of every ideological position is a particularly implausible fix, one that can perhaps be justified only by a widespread conspiracy theory about academic standards being hijacked by, say, a supposed epidemic of "political correctness."
August 29, 2018
Pope Center: UNC Chapel Hill remains "a problem" for suggesting that programs to alleviate poverty might help alleviate poverty (Michael Simkovic)
When North Carolina researchers who study poverty criticized conservative law makers in North Carolina, political leaders reminded academics of the dangers of speaking out against their bosses. Republicans responded by shutting down the law school's poverty center, crippling its civil rights center, and voting for draconian cuts to UNC Chapel Hill law school's budget. North Carolina's Republicans were also among the first to pass the Koch funded, Goldwater Institute backed "Campus Free Speech Act", which is a thinly veiled effort to politicize universities, and monitor and intimidate administrators, students, and faculty under the guise of promoting "free speech."
North Carolina's leading funder of libertarian and Republican causes, James Arthur Pope (usually referred to as 'Art' Pope), is apparently displeased that even after the punishment meted out on the University of North Carolina, the University still hasn't completely capitulated. Mr. Pope's point person on bullying universities into submission, George Leef of the John Pope Franklin Center, recently penned an editorial in the National Review calling UNC "a problem" because of its summer reading list for incoming students.
One of several UNC campuses committed the mortal sin of asking incoming students to read and discuss a pulitzer prize winning non-fiction book which tells the story of American families struggling with the hardships of poverty. The book suggests that government programs to alleviate poverty actually sometimes help alleviate poverty. (In libertarian parlance, this is "advocating statism.") Worse yet, it seems like the kind of book that might be appreciated by Senators Sanders and Warren, two progressive Democrats.
What's notable about Leef's criticism of the book is that he doesn't point to factual errors, inconsistencies, selective citations, logical errors or other problems of quality. For Leef, the book isn't bad because it's sloppy. It's bad because it might create sympathy for policies that extremely rich people who want lower taxes dislike.
An essay in Commentary which Leef praises also attacks scientists at UNC for supporting the international scientific consensus on man-made Global Warming. Universities agreeing with the international scientific consensus allegedly violates principles of "political neutrality."
To some major donors and those whom they fund, "free speech" is too often a euphemism for donor control of public dialogue, and by extension public policy.
 This should not be read as an endorsement of the book. To my mind, there are substantive flaws which could have been pointed out, such as failing to note that high cap rates on low income housing often reflect higher risks for investors and lower expectations of appreciation in value.
August 08, 2018
The ABA recently voted to permit a dramatic expansion of online legal education.
Online education is controversial in higher education. It is even more controversial in legal education, which relies more on classroom interaction and less on lectures than most forms of higher education.
Widespread perceptions that online education is lower quality than live instruction in general—and may be particularly disadvantageous in legal education—are backed by numerous peer-reviewed empirical studies.
Proponents of online education argue that it is more convenient because students and faculty do not have to commute, or because students can learn at their own pace. They argue that it is potentially more cost effective, either because physical facilities need not be used, or because it is scalable, or because an artisanal model of teaching through knowledgeable faculty can be replaced with a less expensive, industrial model of low-skill specialized workers who each handle particular aspects of course development and teaching. Some argue that technology can be used to closely monitor and track students, and that the information gathered can be used to improve the quality of education.
Critics of online education argue that it is lower quality, that most students learn and absorb less, and that the social dynamic of the classroom and learning from one’s peers and interacting with alumni is a critical part of education. (In addition to multiple peer-reviewed studies, they point to recent examples of “online education” such as self-paced workplace training modules as examples of the low quality that can be expected.)
Critics point to the failure of MOOCS—which have extremely low completion rates (see also here)—as evidence of the limits of scalability. They point to the pricing and cost experience of most universities, which have seen high costs of developing and maintaining online courses and additional software licensing fees which have prevented them from charging much less for online classes than for those taught in person. And they point to a rash of cheating and distracted learning, which anecdotally seem to be more prevalent online than in person.
Perhaps the most empirically rigorous (and recent) study of online education to date—which relied on an experimental design with random assignment of students to different versions of the same introductory economics course—found evidence that “live-only instruction dominates internet instruction . . . particularly . . . for Hispanic students, male students, and lower-achieving students.” An earlier study which also used a quasi-experimental approach, found similar results, especially for complex conceptual learning:
“We find that the students in the virtual classes, while having better characteristics, performed significantly worse on the examinations than the live students. This difference was most pronounced for exam questions that tapped the students' ability to apply basic concepts in more sophisticated ways, and least pronounced for basic learning tasks such as knowing definitions or recognizing important concepts . . .
Choosing a completely online course carries a penalty that would need to be offset by significant advantages in convenience or other factors important to the student. . . . Doing as well in an online course as in the live alternative seems to require extra work or discipline beyond that demonstrated by our students, especially when it comes to learning the more difficult concepts.”
August 02, 2018
NALP data: When there are fewer law school graduates, there are fewer law school graduates with jobs (Michael Simkovic)
NALP entry level starting salaries and employment don't predict much of anything about what will happen three to four years from now when those currently contemplating going to law school will, if they choose to attend, graduate into a quite possibly very different economy. Nor is NALP data directionally very different from overall economic data like the employment population ratio which is released sooner.1 And while those graduating into a stronger economy do earn more (at least for the first few years), these cohort effects fade over time, those who graduate in a recession still benefit from their educations, and attempting to time law school is a money-losing proposition because of the opportunity costs of delay.
Nevertheless, every year NALP data on last year's graduating class is released with great fanfare, including a press release. In news that will surprise no one who has tracked the rise in the overall employment population ratio, it turns out that the class of 2017 had better employment outcomes than other classes since the recession. Or as NALP sexes it up for journalists, "Class of 2017 Notched Best Employment Outcomes Since Recession." (88.6% employed 9 months after graduation for the class for 2017, compared with 87.5% for the Class of 2016).
But, NALP unhelpfully informs us, there's a catch--the total number of law jobs for law graduates was lower even though the employment rate was higher.
This should not surprise anyone who is aware that the number of law school matriculants last peaked in 2010, and graduating class sizes have therefore been falling since 2013. From 1994 through 2015, the correlation between annual % change in graduating class size and annual % change in number of law graduates with jobs has been 0.78 (i.e., class size explains 61 percent of the variation in number of law jobs for recent graduates. (data here) The correlation is even higher since 1999 when reporting started covering a higher percent of the class--0.91 correlation, meaning that class size explains 82% of the variation in the number of law graduates with jobs.
There aren't fewer jobs available for lawyers. To the contrary, there are more lawyers working now than there were pre-recession according to both Bureau of Labor Statistics and Census Data (BLS OES, ACS, and CPS). There are fewer recent law graduates working as lawyers because there are fewer recent law graduates.
The employment market for educated workers is large and the number of law graduates is small relative to this market. Law schools are too small to move the market much on the supply side by admitting more or fewer students. Just as the typical investor could sell all of his or her shares of Apple without moving the market for shares of Apple (much less the S&P 500), the typical law school can admit as many or as few students as it wants without changing the overall percent of law graduates who will find jobs. (However, there’s some evidence that at the national level, the share of recent law graduates working as lawyers varies inversely with class size).
The usefulness of NALP data is questionable (at least for many of the uses to which it is often put), but NALP could help by limiting its reporting to employment rates and starting salaries. Discussing changes in the absolute number of law graduates with jobs is simply a confusing ways of telling people that fewer people entered law school 4 years ago than 5 or 6 years ago.
NALP should also contextualize its employment ratios by comparing them to the overall U.S. employment population ratio during the same time period (i.e, March of 2018), which was 60 percent overall, and and 79 percent for those age 25-54 according to BLS and the OECD, compared to 89 percent for recent law graduates, according to NALP.
1 (Similarities are greatest when one restricts it to those who are both young and well-educated using CPS data.
UPDATE: 8/3/2018 The correlations and r-squared were originally reported based on levels rather than % change from previous year. The numbers have been updated to reflect a model based on differencing (% change from prior year), which brings the explanatory power from 1999 forward down from 96 percent to 82 percent.