The Irish Economy

I am not sure that these findings are surprising, but quantifying these effects is very useful. It also seems worth mentioning that Italy has just introduced a system of involving non-Italians in their academic appointments committees. And that it is probably not surprising that the UK, which has a competitive model, is so successful when it comes to ERC grants and other quantitative measures of academic success.

The problem of youth unemployment has rightly been highlighted as one of the major issues facing European countries today.  The newspapers have fastened on the shocking statistic that the unemployment rate among Spaniards and Greeks aged 15 - 25 is about 50 per cent, while the rate for the EU as a whole is about 20 per cent.  These are alarming numbers, but they are also somewhat misleading.

As Stephen Hill pointed out in a piece in the Financial Times on June 24^th, the unemployment rate may not be the best measure of labour market conditions among young people who have opportunities to stay in the educational and training systems rather than entering a depressed labour market.  For this reason, an alternative measure, the unemployment ratio, has gained currency.

The conventional unemployment rate is  the numbers ‘unemployed’ as a proportion of the ‘labour force’.  The ‘labour force’ is the sum of the employed and unemployed.  The ‘unemployed’ are those actively seeking work, but not at work. (For young people it is of interest to break unemployment down into those ‘looking for first regular job’ and those who are ‘unemployed having lost or given up previous job’.)

The problem with using the  unemployment rate to measure labour market conditions among young people is that the denominator does not include those who are in the educational system or on full-time training courses.  During a recession, the higher the proportion of a youth cohort that stays on in school or college or in training, the smaller the labour force and the higher the unemployment rate. This is perverse.

By using the whole cohort as the denominator, the unemployment ratio avoids this pitfall and it may be argued that it therefore provides a clearer picture of hardship being caused by the lack of employment. (Of course this is subject to the reservation that increased educational participation may involve putting square pegs in round holes, with some young people taking courses in which they have no interest.)

The limitations of the unemployment rate as a measure of labour market conditions among the youth population is acknowledged by Eurostat, who now publish both the ratio and the rate for the population aged 15-24.  (Their recent figures for Ireland for 2011 are low and may not reflect the latest Census returns.)

The distinction between the unemployment rate and ratio certainly matters.  Data in the recently-released 2011 Census of Population volume This is Ireland Part 2 show the population classified by ‘principal economic status’. These reveal an unemployment rate of 38.7 per cent among the population aged 15-24 compared with an unemployment ratio of 14.2 per cent. While the ratio of 14.2 per cent gives no grounds for complacency, it is less alarming than the headline rate of almost 40 per cent.

It is perhaps even more important to note that the unemployment ratio has not risen as dramatically as the unemployment rate since the onset of the recession in 2008. The Figure displays the three concepts based on the 2006 and 2011 Census data.

(The Table at the end provides more details.)

Whereas the unemployment ratio doubled, the rate rose by 150 per cent.  Thus, the rate tends to overstate both the level of unemployment among young people and the rate at which it has risen.

It may, however, be objected that the unemployment ratio includes all those who are not in the labour force in the denominator but excludes discouraged workers and similar forms of disguised unemployment from the numerator.  This bias would certainly be significant among older workers, who are more likely to cease looking for work and to drop out of the labour force because no jobs are available.  Its effect on the youth data, however, is smaller because labour force categories other than ‘employed’, ‘student, and ‘unemployed’ are relatively unimportant among the young.  In 2011 less than 2 per cent of population aged 15- 24 are classified as ‘looking after home/family’!

None the less, to take account of ‘dsicouraged workers’ it is worth looking at another concept that has gained some currency .  This is the NEET ratio. It refers to the proportion of the population that is Not in Employment, Education or Training.  To calculate this ratio for Ireland I have assumed that those in ‘(full-time) training’ are classified as ‘students’ in the Census.  The resulting ratio must, by definition, fall between the unemployment ratio and the unemployment rate.  From the Figure we can see that it lies closer to the unemployment ratio. Moreover, it has risen less rapidly than either the unemployment rate or ratio.   In 2011 the NEET ratio was ‘only’ 65 per cent above it 2006 level.

It is striking that the widely-used unemployment rate is so much higher, and has risen so much more, than the alternative – and arguably better – measures of the situation in the youth labour market.

The reason why the unemployment rate overstates both the level and rise in Irish youth unemployment is the high level of educational participation and its marked increase over the past five years. The proportion of the 15-24 year-old population in the educational system rose from 50.1 per cent in 2006 to 60.5 per cent in 2011.  While not all of the additional years of schooling will be as productive as we would wish, being in the educational system is less wasteful than being unemployed.  This aspect of the adjustment to the present crisis is concealed by the conventional youth unemployment rate.

None the less, we cannot lose sight of the collapse of employment among the youth population.  In 2006 39.5 per cent of the population aged 15-24 was in employment.  By 2011 this percentage had fallen to 22.5.  Among those aged 20-24 the rate declined from 60.0 to 39.0.  While the youth unemployment crisis may not be as severe as suggested by the headline youth unemployment rate, it is a crisis.

Paul Mooney has a long op-ed on higher education in today’s Irish Times.

Mooney taught at DCU and was president of NCI. That experience colours his assessment and recommendations. As I have argued time and again, some universities should focus on research and the academic side of education while other universities should focus on the more vocational end of third-level education. Mooney’s one-size-fits-all assessment and recommendations are more appropriate for the teaching end of higher education. Differentiation and specialization are a better way forward. Some Irish universities should lose the right to grant PhDs while other universities should minimize undergraduate numbers.

Mooney first discusses working hours. Teaching hours are a fraction of total working hours — a small fraction at the research end of the university spectrum and a larger fraction at the teaching end. That gradient can and should be made steeper: Many university lecturers are incapable of decent research while at the same time many good researchers are buried in teaching and administration.

Research is multifaceted. Some research is really applied, immediately leading to profits for companies and photo opportunities for politicians. Such research is best done in companies and consultancies. There is also blue skies research, curiosity driven stuff that is truly appreciated by only a handful of people and that perhaps one day might lead to something useful. Such research is best done in universities and national laboratories. Blue skies research does not benefit Ireland. It benefits humankind. It satisfies our thirst for knowledge. It feeds applied research. Blue skies research is a global public good. As one of the richest countries on the planet, Ireland has a duty to contribute.

Ireland can, of course, decide to free-ride and hope that other countries will provide the public good called fundamental research. But there are local spillovers too. The financial reward for top academics is small relative to their capacities and outside opportunities. A low teaching load (and hence a lot of time for research) is part of the reward for top academics. Top academics make top schools. Top schools attract top students. Top students join or form top companies, which prefer to be close to big pools of talent.

Like so many others, Mooney seems to think that technological progress is all about the natural sciences and product innovation. In fact, process innovation is at least as important. With a few exceptions, successful Irish companies are better at process innovation than at product innovation. RyanAir did not invent a new plane. Guinness and KerryGold convinced the world that their product is best (without changing the actual product). Ireland would make a bigger contribution to the global stock of knowledge if it would focus on what it is good at — and that is in the realm of ideas rather than things. The graduates of Ireland’s business and economics schools definitely command a higher wage than the graduates of its engineering and natural science schools.

Mooney also calls for (improved) measurement of performance. I could not agree more.

According to an Irish Times story by Dick Ahlstrom and Fiona Reddan the government has approved the report of the Research Prioritisation Steering Group in identifying 14 priority areas for state-funded research. The report itself is here.

One might hope (though probably in vain) that this would prompt some wider debate. For example, might at least some policy makers be even slightly concerned to question:

• the merits or otherwise of an increasingly centralised model of state planning for innovation,
  
• the continued privileging of scientific and technological knowledge which current policy advances,
  
• the extent to which the relentless shift towards commercialisable state-funded research is in conflict with a core original rationale for this policy: namely the provision of public goods—those which are by definition not commercialisable (current policy can look a lot like socialising the costs, while privatising the benefits), and:
  
• the further opportunities for rent-seeking, by both industry and academics, this sort of exercise creates and embeds, and relatedly, the high political value thereby assigned to demonstrating (by innovators, no less!) compliance with hierarchy, obedience to instructions and the uncritical acceptance of a consensus policy, aka ‘groupthink’?
  

at least, according to the latest ranking by QS.

They’re quiet about the method, but if you click on any of the cities, you will find what matters to them: Good universities, international mix, local employment, cost of living and fees, and quality of living.

As far as I know, this is the first such ranking so it is too early to tell whether Dublin’s high rank will increase the influx of foreign students.

The HEA has published its plans for reforming higher education in Ireland. A high level summary is here. There are two more substantive documents (here and here) that partly overlap. There are two core ideas. First, “technological universities” are introduced. Presumably, these will replace the “institutes of technology”. This is to large degree a matter of relabelling. If this satisfies the demands to have a university in every county then so be it. Ireland would follow the international trend to call each and any 3rd level education entity a “university”. Besides, some (many?) of the ITs already grant PhDs and are thus universities in all but name.

The second idea is more controversial. The HEA wants consolidation, through associations, clusters and mergers. Indeed, technological universities will come from a “consolidation of two or more institutions”. On the one hand, it is high time to rationalize the bewildering number of institutions in higher education. I have argued that there too many, small economic departments. Similarly, Irish business schools are too small to credibly support a broad curriculum. There is a fixed cost to running a department, and small department spent a disproportionate amount of time on administration.

On the other hand, scale for scale’s sake is silly. The HEA is not particularly clear about what research and teaching should (not) be consolidated and why.

I would argue that, for research, 2-3 centres per subdiscipline is plenty. For teaching, 3-4 locations for a bachelor’s, and 2-3 for master’s and PhD is enough — per discipline. For those activities, quality beats location. I’d rather talk to / be taught by a good researcher / professor than the one next door. Silicon Valley is not because it is close to any old university, but because it is close to Stanford. For evening and weekend classes, and more vocational training, you do want close ties to local businesses and therefore a denser network of locations.

UPDATE: The Independent reports on the race to become the first Technological University.

The Examiner reports that the president of Cork IT thinks that TU are too university-like. Cork IT is, I presume, free to remain an Institute of Technology. As it would be one of few ITs, it would be free to re-define the IT concept in Dr Murphy’s image.

The Examiner also notes that “distance from home is a major factor in third level participation”. I would argue that people should be prepared to travel for a quality education.

Another day, another ranking, this time of Economics departments by Tilburg University.

The global ranking has Vrije U in 77th position. You’ll need to use the “ranking sandbox” to discover that UCD is 157, TCD 233, NUIM 503, and NUIG 696. DCU, DIT, UCC and UL are not ranked.

This ranking’s method is simple. Papers are attributed to the department at the time of publication, rather than to the current department of the author. Quality weighing is simple too: publications are given a weight 1 if in a listed journal, and 0 otherwise. The list has 36 journals (although another 32 can be added in the sandbox). The list contains all of the obvious journals, and omits quite a few journals that are equally respectable — and why use a subjective criterion for respectability anyway when objective quality measures are readily available?

The Tilburg ranking thus compares badly to the IDEAS/RePEc one, but the results are not that different: Vrije U is 76, UCD 198 (Geary) or 225 (Econ dept), ESRI 252. Other Irish departments do not make it to the top 5%.

Both rank the total output of the department, not correcting for the number of faculty. Large schools are thus on top.

UPDATE:

The new MBA ranking by the Economist is out too. UCD ranks 38th, and is the only Irish entry. The method is a lot more sensible than the Tilburg one.

Last week, I linked to two papers, one showing that students prefer to enroll in highly ranked universities, and another one showing that a generalization of the Hirsch index partly explains who gets tenure where.

Brian Lucey led me to another paper, by Daniel Hamermesh, to be published in Economic Inquiry. Hamermesh links remuneration to performance, showing that more prolific authors earn more (but this effect levels off). The relation between citations and pay is more intriguing. At the lower end of the pay range, the total number of citations matters. At the higher end, the most cited paper dominates. This makes sense: Prizes are given for the one paper that changed everything.

What has this to do with Ireland? In the USA, academic contracts are individual. In Ireland, contracts are collective. Pay is set by grade and seniority. This implies that only the more productive and more influential Irish academics can get a competitive offer from the USA. Recent cuts in net pay have priced a larger fraction of Irish people into the international market. Irish universities thus run the risk of losing their best people, and we have seen some of that already.

You can’t but admire the person who dubbed Times Higher Education.

The new THE University Rankings are out. Confirms earlier rankings: Ireland is slipping. I won’t repeat the whole discussion again. Just click on the “rankings” tag below to reread previous posts and comments. Here’s a summary: The metric is imperfect, but people base their decisions on it nonetheless.

Note that they changed their method again (for the better, although using Z-scores is statistically inappropriate for a Pareto distribution), so current and past ranks are incomparable.

University Rank 2011 (Rank 2010)

TCD         117            (76)

UCD         159            (94)

UCC         301-350    (>200)

NUIG        351-400    (>200)

NUIM       351-400    (>200)

The subject rankings will be published in two weeks (the PR genius was at it again).

The new IDEAS/RePEc data are out (economics only). Ireland is slipping there too. See graph. This cannot be explained by a drop in numbers. See graph. Liam Delaney and Kevin O’Rourke have left, Colm Kearney has announced his departure, and there will be more, but IDEAS/RePEc has yet to catch up with that.

Similarly, whatever people say in the media, austerity measures and employment control frameworks are likely to impact future university rankings, but I doubt they can explain much of the current rankings, as the objective measures (publications, citations) reflect the past rather than the present.

As with the QS rankings, reputation plays a big role. There is probably a spillover from bad news about Ireland in general to Irish universities specifically.

Media coverage:

Quinn in Irish Examiner

Boland in Irish Examiner

Irish Times

RTE

Irish Independent

The HEA has published its impact analysis of the Programme for Research in Third Level Institutions (h/t Colm Harmon). It is good that government agencies are increasingly open to such evaluation.

From the executive summary, we learn that PRTLI centres and initiatives had a budget of 1.7 bln euro, with 1.2 bln from the Exchequer. 1,700 people were employed, at an exchequer cost of 700,000 euro per job. In 1998, 2,400 full-time academics were employed at the universities and ITs. In 2008, there were 6,200 FTEs.

The commercial impact (a mix of turnover, investment, and cost savings) was 750 million euro, with 1,300 jobs created (or 600,000 euro per job). For the next five years, a further impact of 1.1 bln euro is projected.

In the foreword, John Hennessy (the HEA chairperson) puts on a brave face and lists all the benefits that were not quantified.

Intrigued by the numbers (and their precision; above numbers are rounded) in the executive summary, I read on expecting to find tables and tables with detailed data that would tell me who publishes and who gets cited, which disciplines create economic value, and what universities are motors of development. Unfortunately, such data is not available. The data, by the way, were gathered by questionnaire — that is, companies were asked how many people they additionally employed because of the PRTLI.

Some evaluation is better than no evaluation, but I think that a 1.2 bln euro investment warrants more analysis than what is offered by the HEA.

A guest post by Kevin Denny

The recent publication of the QS world rankings generated a lot of interest as well as criticism from various people, including me. A common response to such criticisms is to say “Like it or not, they matter to people so we need to pay attention to them”.  But do they matter?

This paper looks at how the publication of US college rankings influences the demand for places but only when colleges are not listed alphabetically.

Salience in Quality Disclosure: Evidence from the U.S. News College Rankings

M. Luca & J. Smith

How do rankings affect demand? This paper investigates the impact of college rankings, and the visibility of those rankings, on students’ application decisions. Using natural experiments from U.S. News and World Report College Rankings, we present two main findings. First, we identify a causal impact of rankings on application decisions. When explicit rankings of colleges are published in U.S. News, a one-rank improvement leads to a 1-percentage-point increase in the number of applications to that college. Second, we show that the response to the information represented in rankings depends on the way in which that information is presented. Rankings have no effect on application decisions when colleges are listed alphabetically, even when readers are provided data on college quality and the methodology used to calculate rankings. This finding provides evidence that the salience of information is a central determinant of a firm’s demand function, even for purchases as large as college attendance.

[NOTE: The "rankings" tag leads to previous posts on this topic.]

UPDATE: Glenn Ellison has a cool paper that’s related:

Abstract:

A large literature following Hirsch (2005) has proposed citation-based indexes that could be used to rank academics. This paper examines how well several such indexes match labor market outcomes using data on the citation records of young tenured economists at 25 U.S. departments. Variants of Hirsch’s index that emphasize smaller numbers of highly-cited papers perform better than Hirsch’s original index and have substantial power to explain which economists are tenured at which departments. Adjustment factors for differences across fields and years of experience are presented.

Higher education and research was again in the news today.

The latest batch of bad news on the labour market in Waterford seems to have triggered a decision to establish Waterford University. I am not convinced that universities are necessarily good for regional development. Some universities sure have a positive impact, but I don’t think this holds for any university. With the newly build highways, Waterford is closer to Cork and Dublin, taking away some of the would-be benefits of a local centre of learning and research.

Furthermore, Ireland has plenty of universities already. The largest university has 18,000 students (UCD, 2009) — which puts it below average in the Netherlands,  60th in the UK,  38th in Germany, 35th and just above average in France. Ireland has the 8th highest number of universities per capita in the world already. (A new university would not change the latter rank, just push us closer to Norway.) This matters for two reasons. There is a fixed cost in running a university. International rankings are not normalized for size; small universities cannot do well.

The 2010 annual report of Science Foundation Ireland also made the news today. The press release emphasizes collaboration, which has increased with both researchers abroad and companies in Ireland. This is not a measure of success. It may just reflect the changing nature of SFI funding and its increase in size. The annual report itself has more indicators, but is annoyingly glossy for an academic organization. We learn that SFI-funded researchers have published 22% more papers in 2010 than in 2009, but we are not told the number of researchers. We learn that Ireland has gone up 16 places in the citations-per-paper ranking (36th in 2003, 20th in 2010), but for all we know that may be because of the social sciences and humanities (who are not supported by SFI).

The SFI 2010 Census has more numbers. Two things stand out: Few patents, few spin-outs. Emigration numbers are high: 47% for all, 66% for non-Irish (post-doc and below). SFI’s mission is to bolster innovation in Irish manufacturing.

I’m getting better at scraping the web and I’ve now been able to calculate some things that IDEAS/RePEc does not.

This graph has the number of economists in Ireland registered at IDEAS/RePEc. It is not a natural number to account for joint appointments. The number has been rising steadily over time. I expect that trend to reverse in the coming months.

This graph shows Ireland’s position in the total population of economists. We’re a small country. I highlight Massachusetts because it is ranked highest by IDEAS/RePEc.

This graph shows the number of unique publications per person. In recent times, Ireland has done reasonably well in terms of productivity.

However, visibility cq interest is less impressive, as shown in this graph. It should be noted, though, that “abstract views” is the metric that can be most easily manipulated. That said, Ireland does not do so well either on the number of citations per publication, as shown in this graph, or on the number of citing authors per person, as shown in this graph.

As always, these results can be interpreted in a number of ways. In order to improve Ireland’s standing at IDEAS/RePEc, we’ll need to convince more people that our papers are worth citing.

The great thing about the Public Data Explorer is that you can make your own graphs. You need to go back two positions to return to this blog.

I used these Matlab scripts to scrape the web.

The new QS rankings are out: TCD tops the Irish poll at 65, followed by UCD at 134, UCC at 181, and NUIG at 298. Ireland’s other universities are not ranked in the top 300.

The Examiner (and RTE radio) made much of the fact that UCC got 5 stars. QS now has two rankings. The new one requires more data from the universities. To date, only U Limerick (4 stars) and UCC have provided that information. UCC is thus best of two.

There are disciplinary rankings too. In economics, TCD and UCD are both 51-100. Other universities do not make it into the top 200.

The Independent and Times note that Ireland’s universities have been sliding down the QS rankings. If I’m not mistaken, QS ranks can be compared over time whereas THE ranks cannot. The reasons offered by the various people interviewed are, of course, just speculation. The QS data do not allow for an in-depth analysis of the reasons behind the success, and Ireland’s universities are not particularly good in keeping records.

20% of the QS ranking is citations per faculty. QS does not define this, but the practicable way is to allocate papers to the university at which the research was done (rather than where the researcher is now). Faculty numbers have fallen, so Ireland’s position should have improved on this score, partly offsetting the decline in the faculty-student ratio (another 20%). 50% of the QS ranking is based on “reputation”, and that’s a stock variable that should survive a downturn if properly measured. However, I would think that the drop in ranking is at least partly explained by the brand Ireland turning sour in general.

UPDATE: Brian Lucey offers further thoughts and data.

UPDATE2: Kevin Denny is not impressed.

I’ve taught myself the black art of web-scraping.

There are many rankings of economists and economics departments. IDEAS/RePEc uses a reasonable method and is kept up to date. It also provides rankings by and of countries. Ireland is now ranked 33rd in the world. Ireland’s economists are thus about as good as its soccer players (ranked 31st).

It wasn’t always thus. IDEAS/RePEc has published country rankings since 2005. Ireland’s position has steadily improved over time, as can be seen from this graph. As a number of economists are planning to emigrate, that trend may reverse.

Rankings are funny things. Economists love them. There are rankings by department, by citation, and by subdiscipline. My favourite one is the top dead economist. You’d think it would be Adam Smith, but no.

Some people even rank their rankings.

There are even rankings of business schools, academics, and celebrity economists in Ireland, thanks to Richard Tol and colleagues. The rankings aren’t without controversy. In particular, some see ranking as academic bureaucracy and nothing more, others (like frequent IrishEconomy poster Ernie Ball) point to the perverse incentives such rankings produce in academic life, as well as other serious issues. Ferdinand Von Prondzynski summarises the arguments well here. Here is another particularly harsh assessment of these rankings.

Today’s university rankings show two Irish universities and economics departments in a particularly good light. TCD and UCD come out really well in several areas. Other universities, including mine, don’t feature as prominently at all. Brian Lucey has done the spade work on his blog going through the report, and I reproduce his summary below the fold. Some remarkable findings in there–TCD mathematics is 15th in the world, TCD psychology is top 50, for example–as well as the news that UCD and TCD economics departments are both in the top 50 100 (ht Enda H). Well done to them.

I’m particularly interested in commenters’ reactions to this latest report, and what it might mean for universities in Ireland that a. don’t make the cut in terms of rankings, and b. those that do. Rather than rehashing the tired “rankings-good/rankings-bad” argument, let’s focus, if we can, on what these rankings imply for the funding each university receives by subject area, in the light of the Hunt Report and it’s eventual implementation.  Should resources flow disproportionately to the ‘winners’–TCD and UCD–or alternatively to other universities to bring up capacity? Should all universities do everything, or should there be partitions by subject area? Should UCD’s mathematics department, to pick an example at random, give up and go home, given than TCD’s is so obviously world class? Take a look at the summary below to begin.
(more…)

The ECF for the higher education sector has been revised. Many elements from the last version have been changed. The last draft introduced a range of measures including: the need for specific pre-approval of all individual posts (exchequer funded or not) from a small central government committee; specific quotas for each university regardless of how successful or not they actually were in attaining research income; and decisions made on the suitability of academic hires on the basis of their alignment to government strategy documents.

The new version is a vastly improved document. All of the above elements have been removed. There are sector-wide quotas, in keeping with the need to reduce costs, but allocation with respect of research posts to each university will depend, as you would expect, on how much of the research funding the university actually wins in the competitions administered by SFI, HRB etc., Furthermore, the specific pre-approval process has been shelved as has the frankly puzzling attempt to impose quotas on posts secured from non-exchequer funds. The latter should surely be welcomed by everyone.

The main reason for a revised employment control framework was to deal with pension liabilities arising from contract research staff. In this regard, the new draft forces a fully-funded proviso on to all new grant applications, with grant applicants (exchequer or non-exchequer) now being required to cost 20 per cent of employee salaries into grant applications for pension purposes, starting with new applications. This is a blunt way of dealing with this issue, and there should be further debate on this. In general, the treatment of contract researchers as if they were civil servants in terms of contracts and pensions is one of the defining issues in Irish research at present. It continuously creates confusion on all sides. Attracting bright researchers to Ireland is a legitimate goal of government policy supported by much research on how to create thriving cities. Placing such contractual and bureaucratic impediments to this is counterproductive and groups that represent contract researchers have been among the most vocal in pointing this out.

Hopefully, the new document signals a more productive debate about higher education in Ireland and an improvement in the relations between the universities and the state, which seemed to have degenerated substantially at the beginning of this year. Universities do contribute to both economic growth and to the development and maintenance of healthy democracies in ways that go beyond the current linear big-tech innovation models being employed by government. Attracting top researchers into Ireland on a much larger scale funded by a much more diverse range of sources is one avenue that the country still has open as an attainable policy goal even at a time of dwindling resources and, in fact, reductions in property prices and the general cost of living may make Ireland a more attractive place for European-funded researchers as these grants have retained their nominal value.

I reproduce the full text of the ECF over the page (via 9th level Ireland blog). I really would encourage people commenting to read the document first as its not very long. Some of the argument has conflated the provisions with university funding, with some people complaining about the ECF because it limits academic numbers and some people supporting it basically for the same reason. The issue is not the resourcing but rather the process of hiring in universities and the stipulation in this document that all university hiring will need to be specifically approved by a small central government committee along with similar provisions about reallocating people across institutions and so on. (more…)

Common wisdom suggests the state will not be ready to co-fund the IMF-EU deal by mid 2012. Another deal will accompany a slash in payments to the social sectors including Education. Is the third level sector ready for such a crisis?

The Irish State pays a core grant to our third-level institutions for each undergraduate student, and, in an equal amount, funds the majority of research and postgraduate fees (scholarships). The latter is managed by a proliferation of various third level education bodies which we label Quangos. The sector has developed an unnaturally high dependency on the public finances. This dependence is currently anywhere between 65 to 88 per cent in most Higher Education Institutes

The funding of third-level Quangos now represent an unsustainable overhead on the sector, as this form of finance flowing from the State is on the decline. The indirect costs or the administrative structures that have mushroomed during the boom (which distributed State money) are now vestigial and are turning into a major financial headache and constraint on the sector. The HEI’s must replace these funds with international research grants and postgraduate students. The Quangos are largely ill equipped to induce and manage this change.

The Universities, while undertaking many good reforms, made the mistake of allowing indirect costs inside universities to grow to over 50 per cent. Frontline lecturers’ salaries now only account for 25 per cent of the overall cost of the sector, when we include the overheads of Quangos. Academic salaries have collapsed by 25 per cent (net) since 2008. Most academic units have also lost up to 15 per cent of their staff via retirements or voluntary quits. These savings are returned and retained by the State and not by the Universities.  The oversized non-academic and undersized academic units are finding it a challenge to refocus efforts into securing funds from outside of Ireland. Academics need to be empowered to make such change happen.

What is the solution proposed by State and its agencies to cope with the current crisis?

An imposed agreement, under the false premises of Croke Park, to increase productivity levels of declining numbers of frontline lecturing staff is their answer. Not surprisingly, these productivity increases can never pay for what are now largely indirect costs in the sector.  New income streams are needed: higher levels of international students who pay fees, more EU and Global research funding successes, and private sources.

Yet, all hiring and promotions (whether funded by the State or not), that have come under the State’s employment control, are now banned. The most recent instalment of employment control wants to redeploy academics within and across institutions. There are even conditions on the nature of research that is allowed. The focus of such is on the disciplines that will drive the smart economy (see http://des-fitzgerald.com/ecf/).

This is a ludicrous attempt to turn academics into public servants. The agents of the State seem to have no idea how knowledge is created and dispersed. Academics in a global market face competition from serious creators of knowledge and find every international student and grant is a hard battle won.  Publishing in the leading journals and university presses is like winning Olympic medals in terms of a lifetime dedication to the cause. Academic credentials need to be first class, a Ph.D. from a top University and ground breaking publications. Academics need the time and space to perform at these levels.  Imposing constraints on academic freedom and tenure will only give our competitors an advantage over us, deter international students and grants from coming here and could rupture our growing reputation in scholarship internationally. The idea that an academic in UCD that gets a research grant from a major donor should first see if there is someone surplus to requirements inside UCD and then search in other universities, or even State departments, before hiring a post-doc clearly indicates to me that the state has no idea how knowledge is created. Incentives are for academics to leave Ireland rather than refocus efforts.

What do we do?

Universities have to realise the State is broke. Just like the State should have understood the Irish Banks were broke, now the Universities have to drop the State like a hot potato (Taxpayers and the IMF-EU would approve).

Trinity by the nature of its charter and academic ownership of its property can break from State faster than most.

The first move would be to establish income streams from undergraduate fees, increase the number of international students and external research income.

Most Universities like Trinity already have private enterprise on campus in terms of the library shop, rented accommodation, a Foundation office and Campus Companies. These could turn a higher profit to fertilise academic scholarship.

The University of Dublin, and the National University of Ireland, could create new colleges. Let’s call the one alongside Trinity College, “Christchurch College”. Christchurch could hire and promote and pay pensions on a private basis funded by the new income streams.  All existing contracts could be honoured by Trinity College.

The nature of self governance in a third-level institution means that academics rule. They can promote academic scholarship, and while doing so they can control all non-academic units and can easily restructure the internal indirect costs over-time and reduce them to less than 30 per cent, retaining these savings to invest in Education and Research.

The top slicing of finance by education Quangos would be removed and most importantly their ability to constrain academic freedom to create knowledge for use in a global society would come to a deserved end.

Some universities have endowments and assets that could buy the limited time to achieve such academic and financial security.

Even if the State does not default the case for the third-level institutions to break away from the influence of the State and its agencies is growing with every minute.

The Irish State is a sinking ship and academics need to escape on lifeboats labelled ‘University Charters for use when Academic Scholarship is put at risk from the State, Church or private interests’.  The Founders’ bequest throughout the centuries gives academics an instrument for use when academic scholarship is threatened. Academics need to use it now.

Colm Harmon has a nice little piece on some (possibly) unintended consequences of current government higher education policy here.

Some of my students today complained - softly - about the workings of the Back to Education Allowance.    Like many such schemes globally it allows for some mechanism to maintain welfare payments whilst returning to full time education at both second and third level.   Laudable enough, although  I haven’t seen this evaluated in terms of impact but then again what is new for Irish policy.

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The full text of the Hunt Report is now available on the Irish Times website linked here.

The working paper is now available. Conclusions are by and large as before (2, 3), but details are different. This is the abstract:

The research performance of business scholars on the island of Ireland is evaluated based on their number of publication, number of citations, h-index and the same divided by the numbers of years since the first publication. Data were taken from Scopus. There is a large variation in both life-time achievement and annual production. Almost half of the 748 scholars have not published in an academic journal. Men perform better than women. More senior people perform better. There are distinct differences between disciplines, with accountancy performing poorly. On average, scholars in Northern Ireland perform better than scholars in the Republic. However, Trinity College Dublin has the top rank among the eleven business schools; Queen’s University Belfast and University College Dublin share the second place; and NUI Galway and the University of Ulster share the fourth spot. Irish business schools specialize in particular research areas so that mergers would lead to schools that can support a broader range of cutting-edge education.

This is the last opportunity to correct the data. (UPDATE: One name removed because of a legal threat.)

Bagues and Zinovyeva have an intriguing piece over at Vox. There’s evidence that all-male promotions committees discriminate against female candidates (in Spain). The solution is sex quotas for committees. As women are underrepresented in higher ranks, this would put a disproportionate burden on the current generation of female senior academics. A neat intergenerational trade-off so.

Bagues and Zinovyeva’s propose to use sex quotas, but small ones. This may satisfy all concerns.

For obvious reasons, Ireland has been a prominent feature of the Marginal Revolution blog, one of the best and most widely-read economics websites in the world. Tyler Cowen offers the following summary of Chapter 5 of Fintan O’Toole’s new book.

From Marginal Revolution:

“How Rich Was Ireland Really?

Not as rich as they thought. I’ve been reading Fintan O’Toole’s excellent Enough is Enough: How to Build a New Republic. Mostly it is an expose of Ireland’s crony capitalism and bad political institutions. On economic issues, chapter five offers up the following:

1. During the boom years, property accounted for 72 percent of all assets.

2. For infrastructure, Ireland ranked 26 out of 28 OECD countries.

3. Ireland had a higher share of slow fixed internet connections than in any other comparable country.

4. In terms of R&D or patents, Ireland was well below the OECD average in per capita terms.

5. In the OECD “human and income poverty” rankings, Ireland was 23 out of 25 countries, sandwiched between the United States and Mexico.

6. The country’s health care and educational systems are considered subpar.”

The overreliance on property is now something even the government takes as given but it is worth debating whether our health and education systems are really subpar in the sense mentioned and, in general, whether the whole Celtic Tiger was an illusion or not. There are plenty of things wrong with our education system in Ireland but is it really “subpar” in the sense of being worse than comparable countries? In terms of the health system, I will let commentors weigh in with opinions.

It is worth keeping in mind the substantial gains in life expectancy that occurred even during the late Celtic Tiger period. Life expectancy for people over 65 was the same in 1986 as it was at the foundation of the state and increased dramatically through the 90s and 2000s. We do not have precise evidence on what exactly drove these increases but it would be wrong, in my opinion, to say that we did not make health gains during this time. And this is not to excuse political decisions that saw vital vaccines and treatment of people with cystic fibrosis given lower prominence than the breeding of race horses. But it is worth having an open debate about where the country stands from a developmental perspective as well as a fiscal/monetary perspective. I released a paper recently called “From Angela’s Ashes to the Celtic Tiger: Early Life Conditions and Adult Health in Ireland“. Everytime I have presented it, someone says something like “it should be the other way around” or “you should add “and back again”". I find it hard to think of the broad progress in human development in Ireland in the last 50 years and not have some sense of belief in the potential of the country and some degree of pride of where it has come, even in the face of the current mess. If you look at the health of Irish migrants to the UK over the last 50 years you see huge improvements there also with recent migrants performing as well as or, to a large extent, outperforming natives compared to the 1950s and 1960s migrants who, as an average, are in far worse physical and mental health. It is worth beginning to ask whether what we are facing is a large fiscal and monetary blip with a forseeable exit point or a genuine developmental structural break where the real and profound gains in human welfare seen in Ireland are in danger of being reversed.

The Spirit of Ireland is back. A new glossy was distributed widely by email today. More than one-and-a-half year into the project, there is still no detailed plan, at least not in the public domain.

As before, SoI combines wind power with pumped hydro to create a stable supply of electricity. That would work. Unfortunately, wind power cannot compete without subsidies; and pumped hydro would further add to the costs. SoI is still silent on its cost estimates.

The latest plan is different from what we saw before. SoI aims to export most (all?) of the generated power. The idea is that Great Britain and the Continent are heading for a capacity crunch (likely in Great Britain, less likely elsewhere) and that Irish power would fill the gap. British electricity may well be very expensive around 2020, but it is unlikely that that will last very long. Gas-fired power stations can be built in a matter of years, and shale will keep down the price of gas.

I still fail to understand the business plan of SoI. I would be surprised if this is economically viable, but if others want to invest in it, that’s fine by me as long as they keep the taxpayer out of it. But if this is a commercial venture, then why send a glossy brochure to all and sundry? SoI apparently even visits schools. The glossy lists all sorts of social benefits, but no private ones. This strikes me as a plan to get subsidies.

UPDATE: Graham O’Donnell responds:

Hello Richard,

Thank you for your renewed interest in the project. In fairness to you and to others who have commented, the responsibility now rests with Spirit of Ireland to answer the questions you have raised.

Over the last two years, we have worked through every aspect of the project in great detail. While particular site-specific designs have not yet commenced, we have sufficient detailed costings across a number of locations to complete comprehensive business plans and financial projections. These show a robust technical, commercial and business model.

You were right about several things. Energy independence cannot be achieved in five years. It will take 5 to 6 years to build the first Hydro Storage Reservoir. Based on investor appetite, an additional location could commence approximately every two years thereafter. While be examined very many locations, 4 to 5 appear economically feasible. The smaller scale locations simply do not work.

Secondly, you are correct, it would not make economic sense to damage existing capital investments in thermal power stations. These make a valuable contribution to Ireland’s energy mix, security and exports. We need to optimise their use.

Our initial launch over 18 months ago, was a little flamboyant and in some respects very general, but the principles are sound.

First some basic facts about the project as it now:
1. No state subsidies are assumed to be received
2. Ireland’s energy needs are now being met. Any additional energy produced can be exported provided is done so on competitive terms.
3. Spirit of Ireland is not proposing to build wind farms. This was part of the original plan but there are sufficient number of wind farms in planning that a contracted approach is now the preferred route.
4. the cost of the Hydro Storage Reservoir is approximately 700 million Euro
5. another 700 million is required for substations and bulk power transmission
6. around 200 million is allocated to lower voltage networks
7. the business model is a mix of approximately 50% contracted wind and 50% power purchased from the Irish market at times of excess supply
8. unless required for reasons of security, relatively little power will be fed into the Irish system.
9. a separate capital and purchase envelope is being negotiated, to allow Irish wind farm developers to build additional wind resources. These would be owned by the developers.

About a year ago, following an enormous amount of detailed design, technical and financial analysis, the first draft business plan was produced. It was examined by financial groups in Dublin and London. We iterated this based on expert input, re-costed many aspects and built a succession of additional technical models. The results were very surprising indeed. The interaction between intermittent wind and large scale hydro storage is counterintuitive. Our initial technical models resembled the traditional pumped storage approach. By the time we had finished, a whole new methodology for the operation of storage with wind had evolved. This had very surprising and beneficial commercial results.

One significant mistake that some commentators made was that much energy would be wasted, because we pump all of the wind. This is not the case. In many normal circumstances, the wind simply passes the door. Energy is used only to keep the reservoir at levels sufficient to meet contracted demand.

The hydro storage reservoir produces revenue of between 600 and 800 million Euro per year for the average station. Larger ones produce proportionately more. Take away the costs of the purchased contracted wind power and a more than respectable profit is produced.

The financial assumptions do not include for receipt of the Irish Refit subsidy. Capital costs are kept low by building surface rather than tunneled hydro storage facilities. Framework agreements were negotiated with all the major wind turbine providers, such that significant discounts would apply where many turbines were purchased over a 2 to 3 year period. The keys to success are low capital costs, high wind capacity (33% assumed) and the ability to dispatch power at a time which achieves the highest commercial return.

With respect to ownership, our objective is that these assets are owned to the greatest extent possible by Irish people. The balance of investment can come from external sources. We cannot guarantee at this stage that the project will be funded. However, we can confirm that the level of interest internationally from very large sources of funds is extraordinary. Clearly they will only invest if the numbers and project risk work for them.

The greatest risk to the project is now perceived to be planning rather than technical or financial issues. There are no shortcuts to the planning or environmental processes. These have to be done by the book. It is our responsibility to ensure that we give this project the greatest possible chance of success by conducting a highly professional and consultative environmental and planning process. This has already started with able and generous direction and advice from government officials in Dublin and Brussels.

It is correct to say that wind on its own require subsidies. While wind is a free source of energy, it is not immediately dispatchable and therefore not predictably saleable to large buyers such as the UK power utilities. When combined with low cost storage in a symbiotic operation, wind can participate in any market on a predictable contractible - known price basis.

From a commercial perspective, every major UK power operator wants to buy dispatchable carbon free power. They will buy it from Ireland. They are all required by EU law that a minimum proportion of their generation output comes from renewable resources. The Italians and Germans, all face huge power shortages. The EU Energy Commissioner declared in a report of last month that Europe would need to spend up to EUR1 trillion to secure energy supplies. This Commission report is available on the web.

It is also correct to say that nobody knows the future price of gas. Some think it will follow the price of oil upwards, others that that link with oil will be broken. It is this very commercial uncertainty that means that large UK power buyers do not want to place all of their bets in gas power stations. The lights will not go out in the UK or anywhere else, but there is an extraordinary opportunity available to Ireland to export power to the almost unlimited British and EU market.

Our objectives are:
1. everyone recognise that Ireland has extraordinary wealth in terms of natural energy
2. create a coherent technical, commercial, legal and financial framework, which makes rapid large scale development of these resources possible
3. finalise business and investment plans, acceptable to international investors
4. create a structure which allows all current players to participate - private, semi state and community
5. to the greatest extent possible, ensure that the ownership and resulting profits return to the Irish people - in perpetuity

Some information on our website is out of date. It will be amended shortly.

We are in commercial negotiations with many parties and we cannot discuss all of the details of the project. However, within the constraints of time, we will try to answer any reasonable questions that people may have.

Kindest regards,

Graham O’Donnell

There is a new ranking of business schools by EdUniversal.

Seven Irish institutes make it into the top 1000 (2 in the top 100, 4 in the top 700). The methodology is particularly vague, so I do not know what it means. The ranking is based on a composite of other rankings plus a survey among deans. It seems to be mostly about teaching quality.

Anyway, two Irish universities come out well, so that is good.

There are a few place open still at tomorrow’s event which focuses on higher education (rather than at university-based research).

I’ve just recovered my composure after reading the following article in today’s Irish Times.  Its entitled “The top 100 best-paid in education” and is available here.

It should not have surprised me that all 100 are essentially full-time administrators.  The salaries of research professors all seem to be subordinate.  This contrasts sharply with UK universities (let alone US institutions)  where serious salaries are paid to top research talent.  Tell me I’m wrong: otherwise I’ll start sending food parcels to my separated brethren in the Republic.

The third edition is here.

The records of more people have been vetted. Junior and administrative staff have been removed. And Cork has been added. The refined ranking is TCD, (QUB, UCD), (NUIG, UU), (UL, NUIM), DCU, UCC, DIT, NCI.

The main conclusions (here and here) still stand.

I also counted publications in top journals (score 4 according to ABS) by people affiliated to Irish universities. Less than 5% of people have published in these journals (while employed in Ireland); and less than 2% of published papers are in these journals. The scores are as follows: UCD (15), UL (7), NUIG & TCD (6), UCC (5), DCU (4), QUB (3), NUIM (1). Four people published three papers in top journals (while affiliated in Ireland): Patrick Gunnigle (24), Tom Turner (32), Rory O’Shea (74), and William Kingston (109). The number in brackets is their rank on life-time achievement (publication, citations, h-index). While some people want to exclude all but the top journals, I really do not understand that.

I’ll write up the paper now. Comments on the data should be made, by email, within the next two weeks.