Wednesday, January 15, 2014

Red letter day for NC State

Today was a red letter day at NC State.  President Obama visited the campus and gave a speech where he announced that NC State has received its biggest grant ever -- a $140 million contract for energy research.  Half of the funding comes from the US Department of Energy; the remainder comes from private companies (including ABB, Cree and Toshiba) and the state government.  The research will focus on new advanced semiconductor technology that has the potential for huge energy savings.  

Sunday, January 12, 2014

Thoughts on the job market

We were starting to see a lot of happy talk in the press about the economy turning the corner in 2014.  Believe me, I hope the optimists are correct.  But Friday's jobs report was a big bucket of cold water.  Employment grew in December by 74k, well below the 180 to 200k that was expected.  Employment now is still over 1m jobs below its peak level in January 2008.  The unemployment rate dropped from 7 to 6.7% but only because more people dropped out of the labor force.

As I have said before, monthly jobs data are noisy and maybe the weather threw things for a loop. Looking at 2013 as a whole, WSJ reports that average monthly job growth of 182k was basically unchanged from 2012.

WSJ also has an interesting graphic showing how employment growth has varied by sector.  The biggest job losses have been in manufacturing and construction.  Retail and wholesale trade and financial services also have fewer jobs now than they did six years ago.  One legitimate concern is whether these jobs are ever coming back.

Saturday, January 11, 2014

Should universities rethink some of their PhD programs?

January is peak season for the academic labor market, as graduating PhDs await news of whether they will get on-campus job interviews or come up with a Plan B.  In business and economics the market for PhDs is very strong.  In most scientific disciplines new PhDs move on to post-docs.  Then we have the humanities and liberal arts, where tenure-track jobs are few and far between and those with academic aspirations face years of one year appointments.  

Bloomberg's Megan McArdle had a stimulating (as always) post last week where she points out that academic labor markets have become tournaments, where a lucky few get great positions but most people miss out.  The performing arts and professional sports are two prime examples of tournament markets.  Potential athletes learn at a relatively early age whether they are going to make it or not.  Aspiring actors or rockstars end up devoting their best years to the pursuit of fame, and McArdle thinks academic labor markets are like this as well.

Her suggestion will be viewed as heresy inside the hallowed halls of academe: start shutting down PhD programs in disciplines where there is a glut of doctoral candidates compared to available positions.
That constant flow of grad students allows professors to teach interesting graduate seminars while pushing the grunt work of grading and tutoring and teaching intro classes to students and adjuncts. It provides a massive oversupply of adjunct professors who can be induced to teach the lower-level classes for very little, thus freeing up tenured professors for research. 
Unfortunately, I’m essentially arguing that professors ought to, out of the goodness of their heart, get rid of their graduate programs and go back to teaching introductory classes to distracted freshman. Maybe they should do this. But they’re not going to.
I agree that the professorate is not going to do this on its own.  But will state-funded universities start to see pressure?  Will those private schools who are cash-strapped see opportunity?

Wednesday, January 8, 2014

NC State Jenkins online MBA ranked in top 40 by US News

The US News rankings of online MBA programs were officially released today and I am proud to be able to announce that the NC State Jenkins MBA came in at #36, tied with Michigan Tech and Denver.  We were the highest ranked program in North and South Carolina and came in ahead of such established programs as Syracuse (#39), Florida State (#1 in football but #43 in online MBA), Northeastern (#51), Thunderbird (#51), East Carolina (#58) and George Washington (#64).

NC State Jenkins online MBA scored very high on admissions selectivity (#9 in the country) and also did well in terms of faculty credentials and training.  We just graduated our first online MBAs in fall 2013 and look forward to climbing higher in the rankings next year.

Sunday, January 5, 2014

How the feds might rate universities

The federal Department of Education is working on its own rating system for universities, one under which those with the lowest rating would no longer be eligible for federal student aid support.  Bloomberg Businessweek recently ran a story on how Tennessee has been rating its institutions of higher education, a system cited as a model by the President.

Tennessee used to base educational funding entirely on enrollment.  Now it has a system where state-supported schools are evaluated on 10 criteria, including graduation rates, degrees awarded, research grants, and job placement.  The weights given to these factors vary by class of school, so research grants count a lot at the flagship school UT-Knoxville but it gets zero weight at schools where teaching is the primary mission.

Tennessee's system applied to state-supported schools, but the federal system will apply to private schools as well. Forcing disclosure on key variables such as graduation rates and job placement would be a useful step forward.

The way in which the rating system is designed will have a significant effect on university behavior.  Already schools take steps to game the ratings in US News.  For instance schools US News rewards schools with a large percentage of classes with fewer than 20 students and punishes those with a large percentage of classes with 50 or more.  So some schools have literally changed their class size constraints; there are a lot more classes with 19 and 49 students than there used to be.

The feds promise to rate schools in categories, such as exceeds standards, meets standards, near standard and deficient.  That may mute the gaming in some dimensions.  But wait until the feds try to deny financial aid to a school; you can bet they will hear from that schools congressperson and senators.

Saturday, January 4, 2014

Insurance coverage and ER visits

Science just published the results of a new study showing what effect increased Medicaid coverage has on emergency room visits.  As reported in WSJ, Oregon conducted a controlled experiment where Medicaid coverage was randomly provided to 10,000 low income residents.  By comparing the health and health expenditure data for those who won the insurance lottery and those who did not, one can discern how much impact Medicaid expansion has on health and consumer behavior.  (Aside: the lottery was necessary because more people applied than anticipated so there were not enough funds to cover everyone.)

What should happen when more low income people get health insurance?  One possibility is that they will now go to doctors' offices during normal hours, so ER use will fall.  The other possibility is that the increased insurance coverage leads to increased purchases of medical services across the board, including ER visits.  

The answer is quite clear in the Oregon data: ER use increased by 40% for those newly covered by Medicaid compared to those who did not get coverage.  So as Medicaid coverage expands in most states as the Affordable Care Act comes into effect, we should expect a lot more ER visits.  

For further insight, be sure to check this post by Bloomberg columnist Megan McArdle.