DEMAND AND SUPPLY IN U.S. HIGHER EDUCATION: A PROGRESS REPORT.

The article focuses on economics of education. It presents a progress report of the demand and supply in higher education in the U.S. higher education in the U.S. may be thought of as a giant "industry" in which "inputs" are students of various qualifications, services of teachers and all the other usual kinds of material and service inputs and "outputs" are graduates and drop-outs of various qualifications. Even the category of "goods in process" has its analogy in the case of students who are part way though a particular educational program. If this picture is at all appropriate, then one shall be led naturally to study the demand for outputs, the supply of factors and technological relationships within the industry. Note, however, that the "supply of student inputs" from the point of view of the education industry corresponds to what is usually regarded as "demand for places" by potential students. Colleges and universities do not sell in any direct way their output of graduates in the market for educated labor, nor are they usually thought of as selling their places to students. Furthermore, the hypothesis of profit maximization is no doubt even less appropriate to the education industry than to most conventional industries.