Michigan Higher Education: Facts and Fiction

Review concludes that study is poorly grounded and

findings are grossly overstated

EAST LANSING, Mich. – A recently released report

published by the Mackinac Center for Public Policy claims that state funding to

support colleges and universities actually results in lower statewide economic

growth. A review of this report finds that the report’s analysis and data are

weak and misleading and that the report relies on ideology rather than evidence

to make its case.

The report, Michigan Higher Education: Facts and Fiction ,

was authored by Richard Vedder and Matthew Denhart. It was reviewed for the

Think Twice think tank review project by Professor Jose Luis Santos of UCLA.

The report’s authors argue that Michigan’s colleges and

universities did fine financially during the period from 2000 to 2004, even

though the state sharply cut back on higher education appropriations during that

time. Moreover, they analyze a national set of data and find that states with

greater appropriations for higher education are more likely to have lower

economic growth.

At a time when public

higher education institutions have been required to increase tuition and fees

while many state governments are reducing their appropriations, the Mackinac

report offers conclusions that are potentially very important. In tough

financial times, one wouldn’t want to waste state resources on something that

would lower state economic growth. Santos’ review, however, shows how the

report’s counter-intuitive findings are easily explained once the reader

understands how the report is misleading.

The report’s authors

mislead the reader by narrowly focusing on benefits from higher education that

accrue to individual students despite considerable empirical research from

scholars showing societal benefits. Santos offers the example of high-tech

companies choosing to locate near research universities, thus bringing jobs and

tax revenues to a region. He also mentions that residents with greater education

tend to pay more taxes and are less likely to become burdens on the state. He

notes that while it is hard to attach specific dollar figures to these benefits,

there is no doubt that they exist. Yet the report’s authors refuse to include

them in the calculations they present.

Another misleading

element of the report is the numbers used to support the finding that colleges

and universities have done fine financially despite sharp state cutbacks. The

report discusses and draws conclusions about state allocations, but the numbers

used for these calculations include (in addition to those allocations) all

revenues, including fees, tuition, and private fundraising. In Santos’ words,

the authors use “data about pears to draw lessons about mangos.”

The report’s authors

also make much of the fact that the University of Michigan-Ann Arbor was able to

raise fees and tuition and to find other sources of revenue, even while state

appropriations were trimmed. But Professor Santos’ review points out that this

flagship university was well-positioned to behave “more and more like a private

university.” By contrast, he states, “less sought-after colleges and

universities will not be in the same position to demand higher tuition and fees,

and smaller universities are usually not able to raise the amount of dollars

that can be raised at larger ones.”

In short, the authors

grossly overstate their findings and policy-makers should view with great

caution the conclusions drawn and the policy recommendation proffered to reduce

state funding for public universities.

Find the complete

review by Jose Luis Santos as well as a link to the Mackinac Center for Public

Policy’s report at: http://www.greatlakescenter.org .

About Think Twice

The Think Twice project provides the public, policy makers and the press

with timely, academically sound reviews of selected think tank publications. It

is a collaboration of the Education Policy Studies Laboratory at Arizona State

University and the Education and the Public Interest Center at the University of

Colorado at Boulder and is funded by the Great Lakes Center for Education

Research and Practice.

The mission of

the Great Lakes Center for Education Research and Practice is to identify,

develop, support, publish and widely disseminate empirically sound

research on education policy and practices designed to improve the quality

of public education for all students within the Great Lakes Region.

Visit the Great Lakes

Center website at: http://www.greatlakescenter.or g

Contact:
José Luis Santos (520) 971-9971 (email) jsantos@gseis.ucla.edu