Involuntary and Voluntary Cost Increases in Private Research Universities

Abstract

We consider involuntary and voluntary cost increases in Carnegie I and II private research universities, where we find that voluntary cost increases are over three times as high as involuntary cost increases. As is the case with public research universities, private universities economized on the use of tenure track faculty and non-professional staff, while they invested heavily in more executive/managerial and professional staff from 1987 to 2008. Also as is the case with public research universities, private universities began across the board cost reductions by reducing all staff/student ratios and shifted resources out of overhead and into academic spending from 2008 to 2011. Further, the privates accelerated their cost saving use of faculty and non-professional staff relative to the reductions in executive/managerial and professional staff such that the ratio of tenure track faculty to full time nonacademic professional staff continued to decline.