Rising College Costs, Redux

Peter Vallentyne (Missouri) writes:

I found the following article, by Robert Frank, on rising college costs very interesting. He discusses several aspects, but I found the following especially interesting. 

College tuition for state universities have risen in part because of cutbacks in state appropriations, but academic college costs (appropriations plus tuitions plus academic fees) have risen as a whole. Frank offers an interesting explanation for this. The productivity of labor in labor-intensive industries (e.g., services such as teaching) has tended to increase much less than the productivity of labor in industries in which machines and technology play a much greater role (e.g., the production of physical goods). Nonetheless, salaries in teaching have risen to remain competitive in order to continue to attract the same high quality labor force (not to lose them to other industries). The result of increased salaries without comparable increased productivity is increased cost of the service provided. This, apparently, tends to be true in general in high skill service industries and not merely in teaching.