Higher education in the United States has seen a dramatic expansion throughout the last century. The lecture, while intended for a broad audience, will offer an overview of the US Higher Education (HE) system from an economist’s perspective. It will undertake an analysis of HE’s operation as a marketplace. I will firstly survey the main distinctive features of an American university (admission, students’ choice of specialization, funding, tuition, placement, etc.). Further, I will present the trends in HE enrollments from the standpoint of the intertwining demand for skills in the economy and the return to skill, the so-called college premium. We will take a brief look at what key economic theories have to say about the role of HE in the economy that may help explain the evolution of college premium (in other words, gain an insight in how universities add value) and on market segmentation of HE in the US. Finally, we’ll discuss the operation of an American university as a marketplace, where academic departments compete for students and resources and cope with the challenges of the new economy.
Photo: A crowd of college students at the 2007 Pittsburgh University Commencement, wikimedia.