With the ideas42 Seminar Series, we invite leading scholars to share their insights and what inspires their exploration into human behavior.
Our New York office was pleased to host Sandy Baum of the Urban Institute. An expert on higher education finance, she speaks and writes extensively about issues relating to college access, college pricing, student aid policy, student debt, and affordability. Her recent work includes studies of how behavioral economics can inform student aid policy, a meaningful definition of college affordability, and tuition and financial aid strategies for broad access public institutions. She is also the author of Student Debt: Rhetoric and Realities of Higher Education Financing. After giving a talk to the ideas42 team, Sandy was kind enough to share some of her thoughts on behavioral science:
What drew you to study higher education finance?
I came to higher education finance from a broad interest in public policy, equity, and the distribution of income. College access is a critical part of this field, and both practitioners and policymakers are eager for analytical insights and evidence to strengthen their work. We have made a lot of progress in increasing access to postsecondary education, but we have a long way to go in diminishing how often family background influences where people end up in the educational and socioeconomic hierarchies. It is exciting to be involved in an area that has such immediate importance for people’s lives, but where there is an abundance of emotional response and a shortage of analytical perspectives
Tell us about your work in studying student behavior in this realm.
Much of the work on student aid and higher education financing policy takes student behavior as a given and focuses on how institutional and public policy can remove barriers to student success. Recognizing that students’ attitudes, decisions, and responses are as critical as the actions of others opens up a wider range of strategies for improving outcomes. I have focused on how the student aid system could be improved to incorporate student responses to financial incentives, to complexity, and to other structural factors. An issue about which we need to gain greater understanding is how students perceive their responsibilities for paying for college and particularly for repaying their debts. We have little insight into the interplay between limited financial resources and personal priorities in determining individual approaches to college financing.
What’s one of the most surprising discoveries about human behavior you’ve found?
Nothing seems really surprising in light of the insights behavioral analysis has provided into the seeming idiosyncrasies of human behavior! But I do struggle with accepting the extent of optimism bias. So many of the difficulties people experience in higher education result from the pursuit of paths that clearly offer very little chance of success. And the problem is exacerbated by the unwillingness of others to discourage people from following their dream, even if they know those dreams are totally unrealistic and likely to lead to failure. We have to learn to balance aspiration and opportunity with realism
Have you learned anything about human behavior and decision making that has changed the way you think or work?
My work falls in the intersection of academic research and policy analysis. Observing the difficulty people with similar goals but different backgrounds and approaches have in communicating and learning from each other has shaped my work. I see academic economists presenting rational analyses short on both institutional frameworks and political realities. On the other hand, I see advocates for public policy changes so focused on singular goals that they ignore unintended consequences and the complexities of the problems they are trying to solve. My goal is to make arguments that will induce people to open their minds to new ways of thinking about the issues. So the human behavior in question is not just the behavior of the people for whom the policies in which I am interested are designed, but the behavior and attitudes of the people studying the issues and attempting to influence public policy.
