Sunday, September 12, 2010

Das Bloat: Administrative Size and Cost at Penn State

As I mentioned in the previous post, one of my regular commenters sent me a link to a study by the Goldwater Institute on administrative bloat at American universities.  I've been playing around with the data from the report to see how Penn State fits into the overall pattern of spending on administrators.

The data used by the Goldwater Institute comes from Integrated Postsecondary Education Data System (IPEDS), which  is sponsored by the U.S. Department of Education. The report compares administration size in 1993, the earliest year for which IPEDS data available, to size in 2007, the most recent available data at the time the report was issued. The Institute uses two measures of administrative size, the number of administrators per hundred students and administrative cost per student. According to the Institute,
In the employment tables in this report, the “Administration” column consists of the IPEDS categories of “Administration/Executive” and “Other Professionals.”Other Professionals clearly fall within an administrative category because they are defi ned by IPEDS as “persons employed for the primary purpose of performing academic support, student service, and institutional support…. Included in this category are all employees holding titles such as business operations specialists;buyers and purchasing agents; human resources, training, and labor relations specialists; management analysts; meeting and convention planners; miscellaneous business operations specialists; financial specialists; accountants and auditors; budget analysts; financial analysts and advisers; financial examiners; loan counselors and officers; [etc.].” Under any reasonable defi nition, these employees are engaged in administrative functions but clearly not directly engaged in teaching, research or service.


Unfortunately, the spending categories in IPEDS are not identical to the employment categories, but we have done our best to map them into similar groupings. For the expenditure tables in this report, the “Administration” spending consists of the “Academic Support,” “Institutional Support,” and “Student Services” categories in IPEDS.

The Institute examined both private and public universities. I've restricted my analysis to public universities and I've dropped those schools for which data  was missing for one or the other year.

So whats the story with regard to Penn State?

First let's look at the number of administrators per one hundred students in 1993 compared to that metric in 2007 as shown in the first graph.

In all of the graphs of distributions shown below, the green bands show the first quartile, median and third quartiles. You can mouse over the graphs to get information about other universities.

In 1993, Penn State had 6.20 administrators per one hundred students which was below the 75th %-tile of 6.40 administrators per one hundred students for that year. By 2007, that number had jumped to 10.70 administrators per hundred students  which was substantial above the 75th %-tile which had risen to 8.50  administrators per one hundred students. A better picture of how the number of administrators has changed overall in academia and where Penn State fits in in the shift can be seen in this scatterplot.

Clearly, while Penn State has porked up on the number of administrators, it is not close to the worst offender.

Next the distribution of cost of  administration per student is compared for the two time periods .  The  seventy-fifth percentile of administrative spending per student went from 4,661 in 1993 to 6,247 in 2007. Penn State's administrative spending per student was already well outside the middle of the 1993 distribution at 5,002. By 2007, that number had ballooned to 12, 556.

The extent to which Penn State went from being a big spender on administration in 1993  to being ostentatious in 2007 can  best be seen in the following scatterplot.

To recap,  the size of Penn State's administration  as measured by the number of administrators per 100 students grew substantially between 1993 and 2007 shifting from the upper end of the middle of the distribution to the upper end of the distribution, but the cost of  administration per student, which was already in the upper end of the distribution in 1993,  blew up by 2007.