The Economics Of Economics Teaching

Niranjan Rajadhyaksha — Tue, 30 Dec 2008 08:21:00 GMT

This is a guest post by my friend Ramgopal, who teaches economics at Annamalai University in Tamil Nadu.

"Many college and university teachers, me included, are jubilant now that the cabinet has cleared the sixth pay commission recommendations. The rationale provided for the substantial hike in pay is that it will provide the required incentive for talented folk to consider joining the teaching profession. However this rationale is not taken to its logical conclusion.

In the language of economics, the argument is that the opportunity cost of an academic life (OCAL, pronounced "okal", for short) for talented individuals should be reduced. If members of the sixth pay commission were seriously concerned with minimizing OCAL, they ought to have explicitly recommended pay scales for teachers based on opportunity cost. Now, the OCAL depends on one's academic skills. It will take much more to draw excellent students of financial management to academia than to draw excellent humanities students. This calls for a policy of paying more for teachers of financial management, who obviously have a higher OCAL, than teachers of Sanskrit and philosophy for whom the OCAL may even be zero, except in the case of really outstanding scholars.

To avoid being branded a philistine in academic clothing, I should add I am not advocating the viewpoint that the humanities are "non-utility subjects" (the expression used in the late 1980s by the then education minister of Tamil Nadu to describe social sciences and humanities). One can have immense respect for all areas of academic inquiry while acknowledging that, if we want to attract the best minds to teaching, the best in some fields will be more pricey and should be accordingly rewarded. I doubt if great philosophers such as Richard Rorty and John Rawls felt inadequate or slighted just because they must have been paid less than eminent faculty in the business or medical schools in their universities. But are we justified in assuming that only monetary rewards make teaching a more attractive profession?On the one hand, I have come across quite a few people who told me that but for the relatively low pay they would have preferred to work in a university.

However, American economist Tyler Cowen in an interview with Knowledge@Wharton states that scientific research is largely driven by love of science rather than by monetary incentives, and "Adam Smith didn't get paid much for writing Wealth of Nations, even though it's a long book that required a lot of work. He had an inner drive to get his ideas out there." Read the article here

A friend suggests that the sixth pay commission is overestimating the role of monetary incentives in academic life and completely overlooking the importance of intrinsic motivation. She holds that high salaries for teachers may actually reduce the quality of intake! This observation suggests a type of Laffer curve, or in honor of my friend, a L.S curve: with the quality of recruits on the vertical axis and salary on the horizontal axis, an increase in salary from a very low level will improve quality of recruits, and the L.S curve rises. But after an optimum salary level more and more people will be attracted to teaching because of the salary and not because they are excited by what they teach, and so the L.S curve starts falling. While I don't think the falling L.S curve has yet become a reality, I see no empirical evidence that the quality of college teachers is far better today than it was in the bad old days when teachers were not only poorly paid but irregularly paid.

Is there any way, as a student of economics, I can assuage my conscience while (hopefully) receiving a better pay cheque, and enjoying the same scale of pay as my fellow academics who teach more "marketable" subjects? Paradoxically, it is Cowen who comes to my rescue, this time in his book Discover Your Inner Economist: " We should pay more for talent when the task is socially important...more concretely, we should pay more for school teachers, and yes, that includes me" ( p.34). Now we know that what is "socially important" cannot be decided on the basis of positive economics; it needs normative or value judgments. If our society makes a normative judgment that a) higher education is socially important irrespective of its contribution to GDP; b) all academic disciplines are of equal social value irrespective of their OCAL or value in the job market ; and, in addition, c) academics ought to be paid well even if they are driven primarily by a passion for the scholarly life than by monetary incentives, then I can get that Champagne bottle ready with a clear conscience."

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Of Laboratories And Classrooms

Niranjan Rajadhyaksha — Wed, 13 Aug 2008 05:59:00 GMT

Most Indian publications run annual lists of the best colleges and universities --- either based on the facilities they provide or the quality of students they let loose into the job market.

Shanghai Jiao Tong University ranks world universities each year based on their research capabilities. The latest ranking has been released recently. (Hat Tip: PSD Blog).

"Our original purpose of doing the ranking was to find out the gap between Chinese universities and world-class universities, particularly in terms of academic or research performance," says the University website. "We have scanned every university that has any Nobel Laureates, Fields Medals, Highly Cited Researchers, or papers published in Nature or Science. In addition, we scanned major universities of every country with significant amount of articles indexed in major citation indices. In total, we have scanned more than two thousand universities."

India does not come out too well in the rankings. Only the Indian Institute of Science and IIT (Kharagpur) feature in the 303-401 cluster. That further confirms what many have been saying: even our best institutes produce indifferent research. To the extent that economic growth is dependent on knowledge and innovation, the lack of fundamental research in our universities is an obstacle to development.

Part of the problem goes back to a decision in the Nehruvian era --- to separate teaching and research activities.

Mint had commented on this issue in an editorial that called for shifting as much research as possible back to the universities.

The central issue ... is the vast gulf between teaching and research that our nation has nurtured. Our best young talent festers in under-funded universities, while the bulk of our research monies have gone to government laboratories and institutions.

In a 1991 paper in The Bulletin of Atomic Scientists called “India’s Lopsided Science”, scientist Dhirendra Sharma outlined what could be the root of this legacy. He told the story of how Homi Bhabha managed to impress upon Jawaharlal Nehru the benefits of having research carried out in exclusive government labs, while the universities focused purely on education. Meghnad Saha opposed this policy vehemently, but lost the battle. The consequences of this early policy direction are for all of us to see.

Research must begin with our postgraduate students in a university setting. We don’t need committees to know this works. It has worked for top universities the world over.

But implementing such a programme is fraught with discomfort. First, as much research as possible must be moved back into our universities. This might mean developing several of them into centres of excellence and dismantling research organizations that have comfortably existed for decades.

China is going all out to build its university system. I recommend this paper on what is happening in Chinese university education.

And I had cited the paper in a column I wrote in April 2008: Harvard On The Yangste.

Better funding is only part of the answer.

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An Awkward Corner : education

The Economics Of Economics Teaching

Of Laboratories And Classrooms