Productivity catches up game on: can public research universities catch private non-profit counterparts?

ABSTRACT

Public universities have increasingly lost their publicness and have been driven to manage more like their private non-profit university counterparts. The narrowing distinction is due to decades of public funding cuts and greater reliance on private financing sources. Matters worsened with the Great Recession and political demands to increase public university productivities. However, evidence related to inter-sector productivity differences is sparse, outdated, and somewhat mixed. This paper offers new evidence and methodological advances using 11 academic years through 2015 for US universities and captures pre and post-recession productivities and measures of productivity regress and catch up. Färe-Primont indexes and efficiency decompositions are employed as advances over previous studies. Results are not particularly encouraging in that managerial responses in the public sector have not successfully produced a productivity catch up and, on average, remain below 70% of private universities. In addition, while public universities have been generally more efficient than their private counterparts, the results indicate a deteriorating advantage. Efficiency issues in both sectors are attributed to economies of scope and suggest publics may need to increase levels of graduate education and research production relative to undergraduate education as a path to productivity catch-up and reversal of efficiency downturns.

KEYWORDS:

• University public vs private
• productivity
• catch up
• efficiency
• DEA Färe-Primont

JEL CLASSIFICATION:

• I21
• I22
• I28
• C65
• L32

Disclosure statement

No potential conflict of interest was reported by the author.