Higher ed will bounce back quickly after this crisis. Here is what you can do now to reap the benefits down the line.
It may seem hard to predict life after Covid-19. And yet, some economic outcomes are fairly certain.
There is little reason to doubt that higher ed will bounce back after the crisis, and even do better because of it. This has invariably been the case for the last 50 years.
But not all institutions will be equally positioned to benefit from the upswing. Certain actions are necessary now in order to prepare.
Higher ed is counter-cyclical
Higher ed is defined as a counter-cyclical industry: when the rest of the economy slows down, it swiftly picks up. The classic economics paper “On the Cyclicality of Schooling” by Harris Dellas and Plutarchos Sakellaris explains this dynamic.
During a recession, the opportunity cost of education diminishes: people who are unemployed or otherwise disadvantaged have less to lose, so they are more likely to enrol in school. The greater difficulty in paying for education does not offset this effect. Stanford economist Caroline Hoxby has confirmed Dellas and Sakellaris’ findings after the most recent recession in 2008.
While the current logistical challenges caused by the pandemic are wreaking havoc on universities’ operations, the longer-term outlook is good. Those who remain stable during this period of uncertainty stand to profit from an increased demand for education.
Who will benefit?
This does not mean that everyone in the sector will benefit equally. It is not yet clear whether online degrees would get a boost, for example, or whether students will prefer certain kinds of programmes over others. Each institution’s performance depends on many factors.
What matters most now is to stabilise operations and to prepare for the next academic year, when enrolment and retention may suffer in the aftermath of Covid-19. Recruiting the next 1-2 incoming classes may require extra effort and innovative approaches. Once the temporary uncertainty is lifted, many institutions will enjoy increased demand.
The pandemic is not just a period of closures and pared-down operations. This is also the time to prepare for a coming boom. Reactive measures, such as cutting administrative costs, should be paired with forward-thinking approaches like researching prospective students’ evolving preferences.
