Spring Break
Are all professors crazy?
Roger McCain
Issue date: 2/16/07 Section: Ed-Op
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In a previous column, I pointed out an important difference between universities and for-profit businesses. Here is another: Universities rely much more on a labor force whose sanity is questionable.
Before becoming a professor, a person has to spend many years in study.
Economists speak of study as an investment in "human capital." The most important skills for faculty are the results of study in a particular field, a very specialized form of human capital. Many businesses employ people with a lot of "human capital," but universities are at the extreme.
The investment in human capital can pay off only as long as the faculty member continues to work in that field. But the fields can be very narrowly defined in the professor's world. I can remember when I was one of the top three experts in the world in "innovation- possibility frontier" approaches to economic growth. That was a pretty good thing to be - one of the other two was Nobel Laureate Paul Samuelson. About 1980, those approaches became obsolete. That human capital is worthless to me now.
So professors' investments in human capital are risky.
They are also costly. Consider the experience of a young woman I know pretty well, whom we shall call K. She started studying in her field about her junior year. That was followed by nine years of graduate study at the University of Chicago, one of the best graduate schools in her field. Even so, she then spent three years in a non-tenure-eligible position in New York State. This year, she is starting a position at another New York State institution and will be considered for tenure after six years. If she writes a couple of well-regarded books in her field in the next few years, there is a good chance she will be offered tenure - after 20 years of investing in human capital.
Let's suppose K gets an offer of a tenured position in 2012. How much pay should she expect? After a phone chat with her uncle the economist, K might think it out in terms of economic rationality: "Assume a rate of discount of 5 percent; that is, treat next year's dollar as being worth 95 cents this year. On that basis, I've got over a million dollars of human capital invested in my education.
Before becoming a professor, a person has to spend many years in study.
Economists speak of study as an investment in "human capital." The most important skills for faculty are the results of study in a particular field, a very specialized form of human capital. Many businesses employ people with a lot of "human capital," but universities are at the extreme.
The investment in human capital can pay off only as long as the faculty member continues to work in that field. But the fields can be very narrowly defined in the professor's world. I can remember when I was one of the top three experts in the world in "innovation- possibility frontier" approaches to economic growth. That was a pretty good thing to be - one of the other two was Nobel Laureate Paul Samuelson. About 1980, those approaches became obsolete. That human capital is worthless to me now.
So professors' investments in human capital are risky.
They are also costly. Consider the experience of a young woman I know pretty well, whom we shall call K. She started studying in her field about her junior year. That was followed by nine years of graduate study at the University of Chicago, one of the best graduate schools in her field. Even so, she then spent three years in a non-tenure-eligible position in New York State. This year, she is starting a position at another New York State institution and will be considered for tenure after six years. If she writes a couple of well-regarded books in her field in the next few years, there is a good chance she will be offered tenure - after 20 years of investing in human capital.
Let's suppose K gets an offer of a tenured position in 2012. How much pay should she expect? After a phone chat with her uncle the economist, K might think it out in terms of economic rationality: "Assume a rate of discount of 5 percent; that is, treat next year's dollar as being worth 95 cents this year. On that basis, I've got over a million dollars of human capital invested in my education.
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