Peter Q. Blair (Harvard) and Kent Smetters (U. Penn) have a new paper based on that question, here is the abstract:
While college enrollment has more-than doubled since 1970, elite colleges have barely increased supply, instead reducing admit rates. This study shows that straightforward reasons cannot explain this behavior. The authors propose a model where colleges compete on prestige, measured using relative selectivity or relative admit rates. A key comparative static of the model is that higher demand decreases [increases] the admit rate when the weight on prestige is above [below] a critical value, consistent with experience in elite [non-elite] colleges. A calibrated version of the model closely replicates the pattern in the data of declining admit rates at elite colleges while counter-factual simulations without prestige fail. Prestige competition is inefficient. Allowing elite colleges to collude on admissions strategy internalizes the non-pecuniary prestige externality and is Pareto improving.
My answer is slightly different. I do not doubt that the postulated enrollment selectivity constraint binds in the short run. Nonetheless, I think if most of the top schools really wanted to take in more students, they could do a mix of “recalibrating” the data and lobbying the college raters in such a way that would allow larger classes to happen with little or no reputational penalty.
The true constraint is the faculty. Let’s say Harvard tried to grow by 3x. They would have to hire many new professors, and those are people who could not currently obtain tenure at Harvard. (Harvard could lure those people in, and afford them, right now, but they don’t.) So Harvard tenure standards would have to fall. In addition to tolerating these “lower standards,” the current interest groups controlling Harvard departments would find their power greatly diluted by all these newcomers. And so it doesn’t happen. When “self-interest” and “high standards” coincide in the academic world, it is very difficult to defeat that. At least on academic matters, faculty governance really is the order of the day at top universities.
And so the classes at most top universities stay small. By the way, a potential faculty expansion wouldn’t even have to be with tenure and voting rights. Say Harvard econ would invite in 15 dissident economists, of varying sorts, on “long enough to carry them to retirement” sorts of “no voting rights” contracts. Those people would teach, go to seminars, and in general liven up the environment and bring greater intellectual diversity. They would over time become a force and influence of their own. And so it ain’t gonna’ happen. Harvard has to stay relatively small.
So don’t believe them the next time faculty at top schools tell you they are egalitarian. They are not with their own resources at least, though they are happy to play the game with the resources of others.