Why do Institutions of Higher Education Reward Research While Selling Education?

Abstract

Higher education institutions and disciplines that traditionally did little research now reward faculty largely based on research, both funded and unfunded. Some worry that faculty devoting more time to research harms teaching and thus harms students' human capital accumulation. The economics literature has largely ignored the reasons for and desirability of this trend. We summarize, review, and extend existing economic theories of higher education to explain why incentives for unfunded research have increased. One theory is that researchers more effectively teach higher order skills and therefore increase student human capital more than non-researchers. In contrast, according to signaling theory, education is not intrinsically productive but only a signal that separates high-and low-ability workers. We extend this theory by hypothesizing that researchers make higher education more costly for low-ability students than do non-research faculty, achieving the separation more efficiently. We describe other theories, including research quality as a proxy for hard-to-measure teaching quality and barriers to entry. Virtually no evidence exists to test these theories or establish their relative magnitudes. Research is needed, particularly to address what employers seek from higher education graduates and to assess the validity of current measures of teaching quality.

Barriers to women’s representation in academic excellence and positions of power

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Promotions and Earnings – Gender or Merit? Evidence from Longitudinal Personnel Data

“…Employees may also receive rewards for their teaching load and skill, in terms of higher earnings and promotion probabilities. However, given (1) the theoretical arguments for why incentives for research productivity may have increased in universities (Remler and Pema 2009) and (2) the empirical findings suggesting that universities have become more inclined to make hiring, promotion and remuneration decisions largely based on research without regard to other achievements (Laband and Tollison 2003;Remler and Pema 2009), teaching may play a constantly diminishing role in various career decisions. In fact, the findings of several recent studies suggest that heavier teaching loads are penalized with lower earnings (e.g., Graves et al 2002;Umbach 2006;Binder et al 2012).…”

Killing Public Higher Education

“…In an intriguing working paper titled "Why do Institutions of Higher Education Reward Research While Selling Education?," Remler and Pema (2009) explore several hypotheses relevant to this question. One is that research acts as a mechanism to favor high ability over low ability students.…”