Cost Savings or Cost Shifting? The Relationship between Part-Time Contingent Faculty and Institutional Spending

November 2016
Related Topics
Contingent Workers

While reliance on part-time contingent faculty has helped constrain faculty compensation costs, it hasn’t produced the same level of savings in total compensation costs for all employees.

Summary

Colleges and universities across the board are relying more on contingent faculty to increase flexibility and reduce costs. Yet little is known about whether such savings actually lower overall institutional costs or if the money saved on instruction is being spent elsewhere. This paper, the second in a two-part series based on data provided by the Delta Cost Project at American Institutes for Research, examines the financial trade-offs institutions make when hiring more part-time contingent faculty.

Key Insights
A clear relationship exists between reliance on part-time contingent faculty and cost savings in faculty salaries and benefits. However, savings in total compensation costs for all employees during the period studied (2003 to 2013) have been more modest.
Public four-year institutions are apt to use savings associated with part-time contingent faculty to increase expenditures on administration and maintenance.
Private four-year and public two-year institutions showed little sign of cost shifting, reporting not only flat or declining instructional spending but also limited growth or declines in administration and maintenance expenditures.
Methodology

The information used in this study comes from the Delta Cost Project Database, 1987–2013, which includes data reported by institutions to the U.S. Department of Education’s Integrated Postsecondary Education Data System. These data have been harmonized (when possible) to account for survey changes over time. Staffing data from the 2002 Fall Employees by Assigned Position Survey (i.e., 2002–03 school year, or 2003 academic year) were appended to the Delta Cost Project Database to provide more detailed staffing information. The study focuses primarily on the 2012–13 academic year, with select analyses examining the 10-year period from 2003 to 2013.

Higher education is a labor-intensive industry, which makes shifting to contingent faculty a natural cost-saving measure.
Download Report Materials
Authors

About TIAA Institute

The TIAA Institute helps advance the ways individuals and institutions plan for financial security and organizational effectiveness. The Institute conducts in depth research, provides access to a network of thought leaders, and enables those it serves to anticipate trends, plan future strategies and maximize opportunities for success.
Related Publications

Related Publications

Millenial P-Fin promo

Millennial Financial Literacy and Fin-tech Use

September 2018

Millennials comprise 35% of the U.S. labor force and by 2019 are expected to surpass Baby Boomers as the nation’s largest generation. So their financial capability matters greatly to the U.S. economy.

Beshears Report Image

Potential vs. Realized Savings Under Automatic Enrollment

July 2018

Automatic enrollment helps boost retirement plan contributions, but its ultimate impact on plan balances is unclear.

Stango RD Chart

We Are All Behavioral, More or Less

July 2018

Understanding the prevalence, diversity and predictive power of behavioral factors—deviations from classical assumptions about consumer choice—is critical for theory, research and policy.