Theme for the Semester: Economic Perspectives on Educational Accreditation

There is a fundamental economic dynamic to educational administration. Students are often artificially placed in situations to compete for the "scarce resources" of teacher approval: grades, PhDs, points, diplomas, and every other manner of educational credit or record comprise what I like to call "educational currency". This notion is also familiar to members of my generation who grew up playing video games - it was only by the score, or the accumulation of experience points, that one knew how they stacked up against other players. But where does the fundamental value of a currency come from? Currencies used to be backed by metals. If you could give someone a hunk of gold for their currency they were willing to hold it and use it - kind of silly. Now currency is essentially backed by the trust we place in good monetary policy. As long as government agencies are responsive to the needs of the economy both at home and abroad, we feel secure in holding our dollars (a presumption that today looks a bit shaky, due to the dollar's decline against the euro).

Educational currency works in a way similar to these fiat currencies we're already familiar with. The extent to which having a particular chunk of educational currency is considered valuable largely based on institutional trust. Duke is "known" to be a good school, so a Duke diploma is thought to be worth the extra "investment" (by a fair number of parents at least). But what if Duke has an off year? Or what if Duke's faculty is infiltrated by fraudsters who hand out A's to even the most anti-intellectual students? How is an employer going to know a diploma from Duke, or any other school, actually means? In other words, if Duke checks and improves upon students, who is checking and improving upon Duke? The answer of course is that accrediting organizations do - independent third parties who have the authority to renew Duke's accreditation, and all the other schools. Without accreditation, a school might as well close its doors, because its credits will not transfer, and its graduates efforts will be questioned or rejected by potential employers. This is a very real concern today, as for-profit universities have recently attempted to open up this debate in Congress, calling for credit transferability to be ensured between their programs and non-profit or state institutions. It is the accreditors that provide a standard by which we've traditionally put our faith in the educational credits handed out by universities and community colleges, and that standard is really what needs to be brought to bear on the problem of educational credit transferability and reliability - somehow, but the debate rages on.

So how are people approaching this problem? And is economics important to all these questions?

The multiple economic perspectives on this issue are going to fascinating to explore. Educational credit is seen as many different things by educators, some viewing it as a necessary evil (small liberal arts colleges), and others embracing the rigid standards necessary for measuring a professional skill (training schools). If we do live in a knowledge economy, then the role of educational currency, from an neoclassical economist's perspective, would clearly be its power to get the holder a new job quickly and easily, easing transitions in the labor market. But the moral/philosophical view is going to certainly take issue with a life's intellectual achievement being reduced to pieces of paper. It may be a contentious discussion indeed...

The following preliminary bibliography contains articles written about education from both a policy perspective and an economic perspective.

Preliminary Bibliography:

Mause, Karsten. "Rethinking government licensing of higher education institutions." European Journal of Law and Economics (2008) 25: 57-78

Lien, Donald. "International accreditation and brain drain: A simple model." Economics of Education Review. 25 (2006) 335-340.

Blumenthal, Robert A. "What does accreditation really mean?" The John William Pope Center for Higher Education Policy. November 21, 2007. Accessed online: <http://www.popecenter.org/issues/article.html?id=1928>

Leef, George. "Accreditation has no clothes." The John William Pope Center for Higher Education Policy. January 15, 2001. Accessed online: <http://www.popecenter.org/news/article.html?id=1487>

Siskos, Yannis. et al. "A multicriteria accreditation system for information technology skills and qualifications." European Journal of Operational Research. 182 (2007) 867-885.