June 1, 2006

Losing Their Edge?

As the Internet changed the nature of higher education in the last decade or so, considerable research has examined the question of whether students were changing enrollment patterns. But three scholars whose findings were just published by the National Bureau of Economic Research suggest that there has been a significant and largely overlooked relocation going on since learning went online: among faculty members.

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In “Are Elite Universities Losing Their Competitive Edge?,” the scholars examine evidence that the Internet — by allowing professors to work with ease with scholars across the country and not just across the quad — is leading to a spreading of academic talent at many more institutions than has been the case in the past.

The research by E. Han Kim, Adair Morse and Luigi Zingales is based on an analysis of faculty members in economics and finance departments, but many of the conclusions do not appear to be factors that would apply only in those disciplines. (An abstract of the findings is available online, where the full paper may be ordered for $5).

The basic approach of the research was to examine the productivity of professors at elite universities (defined as the top 25 in economics and finance) in the 1970s, ’80s, and ’90s. What the scholars found isn’t good news for those top departments. In the 1970s, a faculty member moving from a non-top 25 university to Harvard University would nearly double in productivity (based on various measures of journal publishing, which is where most economics research appears). By the 1990s, this impact had almost entirely disappeared.

Beyond Harvard, the study found that moving to 17 of the top economics departments would have had a significant positive impact on productivity during the 1970s, while moving only to 5 of them had a significant negative impact on productivity. By the 1990s, only 2 such departments were having a positive impact on productivity while 9 had a significant negative impact. Finance departments also saw a decline in productivity impact.

The findings do not necessarily mean that top economics departments are full of deadwood. But they do suggest a “de-localization of the externality produced by more productive researchers.” In other words, these days professors are no longer likely to be more productive just because there is a genius down the hall. The cultural norms of departments still matter, the authors write, and being surrounded by non-productive colleagues has a negative impact on productivity.

But you no longer need a critical mass on your own campus to do good work. Part of this, the authors suggest, is that databases can now be shared more easily across campuses, and so there is less of a distinct advantage to being physically located at the top universities, which also tend to be the places where more databases, library collections, etc., reside.

And as more people are spread out at more institutions, the elite professors work with them. At the start of the 1970s, the authors write, only 32 percent of the articles in top economics journals that were written by a professor at an elite institution had a co-author from a non-elite institution. That percentage had increased to 61 percent by 2004.

The implications of these shifts, the authors write, can be seen at both non-elite and elite departments. Faculty members are now “more mobile,” the authors write, “making it easier for a new place to attract away the most talented researchers with higher salary.”

But the “universal access to knowledge” is also having a benefit for faculty members at the top 25 departments. Prior to the Internet, the authors write, the benefits of working in a top department were greater, so professors might accept slightly lower pay because of such benefits. With the disappearance of such benefits, data on salaries indicate greater increases at the top 25 institutions that experienced the greatest losses in productivity.

The authors of the piece work at top universities. Kim is professor of business administration at the University of Michigan. Morse is a graduate student in business at Michigan. Zingales is a visiting professor of economics at Harvard.

— Scott Jaschik

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