Fair market test for American universities?

Tyler Cowen writes,

American higher education does pass a massive market test at the global level — foreign students really do wish to come and study here.

If you just look at the Anglosphere, it’s not clear to me that we are winning a market test. The foreign students are not flocking here from Australia, Canada, and the UK. As for the Asians who are flocking here, I would ask whether they strongly prefer U.S. universities to universities in Australia and Canada, and if so, why. Two seconds of Googling yields this, for example:

A boom in international student numbers in South Australia and the impending merger of two Adelaide universities convinced James Hines to abandon plans for a hotel on a prime city site and instead turn it into one of the world’s tallest student accommodation towers.

And if it turns out that the U.S. does relatively better at drawing Asian students, some reasons could include:

1. A student visa is a relatively easy way to get an extended stay in America, if that is what you want.

2. If you can then get a job here, you can get a green card and stay even longer.

3. Although you might get fine instruction at McGill or Adelaide, you can pick up American culture more readily at Mason.

14 thoughts on “Fair market test for American universities?

  1. Achieving very good English language proficiency is a big benefit, as well as some general sense of the culture, customs, and mores of the USA.

    In the USA people will pick up not simply the English language but an American accent. The ideal time to pick up an accent is before you are in high school. The developmental window seems to begin closing as puberty starts. But even college age is better than nothing when it comes to speaking and especially understanding the colloquial English of native speakers.

    I’m not sure most Asian students achieve that, but they have an opportunity to do so, especially if they manage to go to college in the USA as undergraduates and spend the vast majority of their time in a millieu that is not saturated with other Asians.

    • Honestly this is decreasing the last 4 years, starting 2016, but we still have net students in this nation. Living in California, here is we see:

      1) Maybe the US universities are good. Everybody assumes universites can’t be good here which I don’t see much evidence. They are better than back home where India and especially China has not had enough resource and time to invest. (We forget there Chinese citizens that lived during Mao reign. It was not that long ago.)

      2) The Good Professor is right there are a lot of Student Visa and Green Card advantages which also brings many of the best and competitive students. It is student virtuous cycle here in terms of quality. Having the best students improves the University reputation which brings best students.

      3) There is lots of tech jobs in India and China so being near tech center is even good for these jobs back home.

      4) Honestly, the US is good place to live is reasonable point as well.

      Conservatives are correct there issues with the US university system, the school themselves are actually good and Tyler’s market test is directionally correct.

  2. This seems negative on the US university because they do not fit your preferred narrative! This is unbecoming!

    1) Maybe Australia, Canada, and the UK are relatively just as good and finding three other nations (two of which have populations near California) does not prove the US university is not a preferred choice. The argument is Mercedes-Benz does make a great car because people buy BMWs.

    2) I don’t disagree that the US university system benefits from increased chance of US visa and career. What is wrong with US university taking this advantage? Every business is suppose to use every advantage to win customers! And this builds a virtuous loop of universities and business jobs.

    Anyway, the vast increase of foreign students is not always the most popular in our state but it does long term help the Californian economy. (I would suggest that most pundits miss about California is our economy has a lot more Asian influence than people realize.)

    • Actually, I bet the US gets a higher percentage of Canada college students than Chinese or, especially India, college students. It is a lot less obvious due to the size of China and India being over 1B+ people. (Yes a Canadian student has it easy travel access, etc.) In reality the nation where the US probably get the highest percentage of students is Saudia Arabia.

      Tyler market smell test ain’t perfect but you can’t simply dismiss either.

  3. The tiny UK attracts about the same number (around a million) international students as does the USA. Interestingly, while the UK’s top source of international students is China with 95,090 in 2016/17, the second most enrolled international students in 2016/17 were US students with 17,580 enrollments.

    Of course the flow goes both ways and there were about 9,000 UK students in the US in 2009/10. The BBC in a 25 Nov 2010 article cited the ease of college admissions as a primary attraction describing the case of a kid who apparently didn’t do well enough in school to get into British schools so instead enrolled in a Virginia community college for two years and then finished at George Mason.

    So, yeah, maybe Cowen is right. The US is a great opportunity for foreignors who couldn’t get into schools in their own country. And that would be completely fine although I’m fairly certain that is not what Cowen had in mind.

    The US has over a quarter (51 by my count) of the top 200 universities in the most recent annual QS Quacquarelli Symonds World University Rankings. Students from around the world are attracted to these top ranked schools and they will gleefully fleece them for full tuition. (And just another reminder, there is no such thing as “non-profit”: there is only taxed or untaxed and the revenue that the US could collect in taxes from the tax-exempts simply flows into higher salaries and vanity projects.) The opportunity to rub elbows with elite rich foreignors no doubt adds to the allure of these universities for US students. Win-win.

    Nevertheless, these top ranked institutions are just a maraschino cherry atop a pile of dung. The top ranked schools enroll under 5% of the total US student population.
    There are 4,298 degree-granting postsecondary institutions in the U.S. as of the 2017-2018 school year, according to the National Center for Education Statistics, with a total enrollment of about 19.9 million.

    There is corn in there, true, but the rest…

    The OECD’s Program for the International Assessment of Adult Competencies (PIAAC) tests adults for basic literacy and other skills. The United States, which spends more on education per student, than any other country besides Luxembourg, manages to come in below 17 of the total of 40 countries tested and below the international average.

    I don’t want to get into the whole debate as to the genetic inferiority of Americans, but the PIAAC report suggests that genetics are the least of the US’s problems:

    – Average scores on the PIAAC literacy scale for adults age 16 to 65 ranged from 250 in Italy to 296 in Japan. The U.S. average score was 270. Compared with the U.S. average score, average scores in 12 countries were higher, in 5 countries they were lower, and in 5 countries they were not significantly different.

    – Average scores on the PIAAC numeracy scale for adults age 16 to 65 ranged from 246 in Spain to 288 in Japan. The U.S. average score was 253. Compared with the U.S. average score, average scores in 18 countries were higher, in 2 countries they were lower, and in 2 countries they were not significantly different.

    -Average scores on the PIAAC problem solving in technology-rich environments scale for adults age 16 to 65 ranged from 275 in Poland to 294 in Japan. The U.S. average score was 277. Compared with the U.S. average score, average scores in 14 countries were higher and in 4 countries they were not significantly different.

    -Twelve percent of U.S. adults age 16 to 65 performed at the highest proficiency level (4/5) on the PIAAC literacy scale. The percentage of adults performing at this level was higher than in the U.S. in 7 countries (Japan, Finland, Netherlands, Australia, Sweden, Norway, and Canada), lower in 11 countries (Denmark, Poland, Czech Republic, Austria, France, Ireland, Republic of Korea, Slovak Republic, Cyprus, Spain, and Italy), and not significantly different in 4 countries (England and Northern Ireland-United Kingdom, Flanders-Belgium, Estonia, and Germany).

    -Nine percent of U.S. adults age 16 to 65 performed at the highest proficiency level (4/5) on the PIAAC numeracy scale. The percentage of adults performing at this level was higher than in the U.S. in 15 countries (Finland, Japan, Sweden, Flanders-Belgium, Norway, Netherlands, Denmark, Germany, Australia, Austria, Slovak Republic, Canada, Czech Republic, England and Northern Ireland-United Kingdom, and Estonia), lower in 3 countries (Republic of Korea, Italy, and Spain), and not significantly different in 4 countries (France, Poland, Ireland, and Cyprus).

    -Six percent of U.S. adults age 16 to 65 performed at the highest proficiency level (3) on the PIAAC problem solving in technology-rich environments scale. The percentage of adults performing at this level was higher than in the U.S. in 8 countries (Japan, Finland, Sweden, Czech Republic, Canada, Germany, Netherlands, and Australia), lower in 2 countries (Ireland and Slovak Republic), and not significantly different in 8 countries (Poland, Denmark, Flanders-Belgium, Norway, England and Northern Ireland-United Kingdom, Estonia, Austria, and Republic of Korea).

    Predictably elite opinion in the US is focused upon the largely irrelevant question of “how can we salvage the reputations of our elite universities” instead of the more important and fundamental question of “Why is the US spending so much on education and getting so little in return?”

    In most countries around the world where government schools perform predictably poorly, a thriving market of private supplementary schools emerges. The US has this to some extent with many US parents paying for private tutoring and extracurricular enrichment classes.

    One solution might be to open a new front in the war on educational mediocrity through state funded educational enrichment scholarships. Award families whose children show up to school and achieve passing grades with grants that may be used for paying tutors or for enrollment in private supplementary education programs. A smart state legislator might advance legislation directing school districts to set aside say 5 percent of their funding for such scholarships. Public school teachers might appreciate the opportunity to supplement their earnings by moonlighting as tutors and enjoy the freedom to teach without all the bureaucratic hassle. Singapore provides an instructive example of how such a scholarship program could operate.

    At the higher education level though more radical measures are required. Tenured faculty generally work without any supervision or management. And students enroll in a course with little foreknowledge of how good a teacher they are signing up for. Attempts to fill this asymeticral information void such as Rate My Professor suffer from a tragedy of the commons. A good chunk of bureaucratic bloat in higher education can be seen as an attempt to fill the absence of that good old fashioned managerial expertise of whose praises Tyler Cowen sings.

    Here a national level solution may be in order. The Department of Education should propose legislation requiring the departments of colleges and universities that accept federal funding to annually rank order their each individual instructor by department on their observed teaching quality, let’s say by quartile, so that a list of instructors would be produced with equal numbers in each quartile. The list would be made available to students prior to making their course selections. Such a measure would incentivize improved performance and provide an opportunity to nudge instructors away from preaching about their personal political preferences and actually focusing on the subject matter of the class.

    But that is just one idea. Many more are needed to give US higher education the radical reform that students, employers, and US taxpayers deserve.

    • FWIW – statistics on where international students in the US come from are available at the statista website.

      More than a third (363,000 in 2017) from China. Even with some 250,000 from #2 and #3 sources India and South Korea, eyeballing the list, it appears that more than half of international students come from authoritarian states.

      Aside, from India, the US is not particularly good at attracting students from free countries. This probably supports Cowen’s “brain drain is good dogma,” but it doesn’t support his notion that the world is clamoring for US education. It appears that people just want to get out of authoritarian states (mistakenly seeing the US as any different) and that they really may want to study here because they really want to work here. And that is even though US colleges are working hard to attract them for the tuition bucks. A 20 Nov 2017 Pew study reported a large increase in the number of internatonal students in the US but stated, “the increase was most pronounced at public colleges and universities, which faced budget cuts during the Great Recession and began to rely more heavily on tuition from foreign students.” And a later 2018 Pew article notes that the number of Indian students in the US has declined since 2016 as economic opportunity and freedom have increased elsewhere in the world.

      Dr. Kling’s point #2 is also born out statistically. An 18 May 2017 Pew study found that students stay in the US after graduation to work: “A growing number of high-skilled foreign workers find jobs in the United States under a program known as Optional Practical Training (OPT), which allows foreign graduates from U.S. universities to work in the country on a temporary basis. The federal government approved nearly 700,000 OPT applications in fiscal years 2008 through 2014.”

      Interestingly, Pew states:

      “Foreign students from India (72,151) and China (68,847) accounted for more than half (57%) of all those who were approved for OPT and found jobs from 2012 to 2015. Other top countries included South Korea (14,242), Taiwan (7,032) and Nepal (5,309).” I’ll give US universities credit for attracting students from South Korea, but note that these may not be South Korea’s best graduates. Pew reports that the top 10 OPT program universities include a lot of second and third tier schools:

      1. University of Southern California 7,485
      2. Columbia University 7,116
      3. New York University 5,260
      4. Carnegie Mellon University 4,485
      5. City University of New York 4,329
      6. University of Illinois 4,247
      7. University of Michigan 4,216
      8. Northeastern University 4,076
      9. University of Texas at Dallas 4,039
      10. University of Florida

      China sends a third as many students to tiny South Korea as it does the US where they account for 55 percent of 123,858 international students as of April 2017. Given the central role South Korea plays in the US tech industry, supplying the firm-ware know-how without which the US tech industry would be dead in the water, the US should really prioritize the urgent need to enroll more US students in South Korean schools. Rather than throwing more money at failing US institutions, funding should be redirected to Fulbright scholarships for tech majors. So many Fulbrights are wasted on studies in worthless, ideaological “disciplines.” The scholarship would return much much more if they were limited to studies of economic significance. Fulbright scholarships for tech majors. So many Fulbrights go to
      worthless

    • I don’t want to get into the whole debate as to the genetic inferiority of Americans, but the PIAAC report suggests that genetics are the least of the US’s problems:

      Since the PIAAC report says nothing about genetics, it gives no evidence about how much or how little importance to give to “genetic inferiority”. On the other hand, here is one of the world’s more depressing graphs.

    • My question is why the average intelligence of the US citizens somehow proves the US University system is bad? Intelligence ranges quite bit so there millions very smart Americans who go to college and does not answer the question why the university system is not the best in Japan? (Or where ever)

    • The Department of Education should propose legislation requiring the departments of colleges and universities that accept federal funding to annually rank order their each individual instructor by department on their observed teaching quality, let’s say by quartile, so that a list of instructors would be produced with equal numbers in each quartile.

      Of course, just assume a can opener.

      How the %$#@! is a department going to measure “teacher quality” in a university? Seriously.

  4. A giant market success of US education is CrossFit physical fitness. 3500 Crossfits have opened in Europe, 200 in the Middle East, 51 in India, 425 in China + Southeast Asia, 186 in South Africa. https://map.crossfit.com/

    Crossfit is selling exercise curriculum and methodology and branding. Universities are selling a place to live and a culture and a peer group to join, more so than curriculum and education. That is a market success, but on a very different thing.

    If China + Europe + India were opening up Harvards + Yales like they opened up Crossfits, that would be a market success of curriculum and grading methodology, not merely a market success of living in the US.

  5. In my experience, Asian students gravitate toward STEM, pre-medical, and business majors. American universities do just fine at teaching those subjects, no matter how screwed up the humanities departments are. They mostly stay away from what I’ll call Major-like Activities for Dumb Students (abbreviated MADS, and implications of anger and insanity are far from coincidental).

    • I’ve talked with young Asians planning to study abroad. They almost always say the US, and always some profession, usually marketing or graphic design (does that count as an art?) Never the humanities or the “studies.”

      They also want to travel in the US – do road trips by car.

      But when it comes to a place to visit or to earn some tuition money, they always talk Australia. I imagine air fares have something to do with that.

      • I think the Asians that I’ve hung out with are a bit tech-nerdier than the ones you know, but that sounds about right.

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