How the Financial Crisis and Great Recession Affected Higher Education

How the Financial Crisis and Great Recession Affected Higher Education explores how universities dealt with endowment losses, reductions in their students’ family incomes and donors’ wealth, changes in state and federal support, and changes in the economy more generally. Editors Jeffrey R. Brown and Caroline M. Hoxby bring together leading experts to improve our understanding of the economics of higher education, to show factually how higher education changed during a period of great economic stress, and to foster more effective conversations between economists and university leaders.
In contrast to the vast majority of economic studies of higher education, which are written from students’ point of view, the chapters analyze universities as organizations and assess universities’ incentives, constraints, and objectives with objective economic logic. They show that universities’ behavior can in fact be modeled and that it exhibits statistical patterns that confirm key economic hypotheses. Each chapter takes into account how university leaders’ actual experience would agree with how it was modeled, bridging the gap between rigorous analysis and narratives that higher-education participants can believe.

Jeffrey R. Brown is the William G. Karnes Professor of Finance at the University of Illinois at Urbana-Champaign and a research associate of the NBER. Caroline M. Hoxby is the Scott and Donya Bommer Professor in Economics at Stanford University, a senior fellow of the Hoover Institution, and a research associate and director of the Economics of Education Program of the NBER.