«Cost Disease» of Russian Higher Education

Higher education is a sphere of the humanitarian sector and, despite the intangible nature of its products, does not cease to be a structural element of the national economy. The education sector is forced to compete for the labor market and for the attractiveness of the sector with branches of material production capable of introducing technological innovations. It requires increasing revenues by means of raising the cost of manufactured products, this raise having almost no performance justification. The resulting «cost disease» in the sphere of education makes the products of its non-material production lose their availability and attractiveness to consumers. The purpose of this paper is an econometric analysis of the 2012–2020 «cost disease» in Russian higher education. The article continues the study of 2000–2012 «cost disease» in higher education by I. V. Abankina, T. V. Abankina & P. V. Derkachev. The main research method is econometric (regression) modeling based on time series. The study is based on statistical data from Federal State Statistics Service and from the Ministry of Science and Higher Education of the Russian Federation. Our analysis shows that the 2012–2020 trends are similar to those of the previous period. Theoretically, the root cause of the «cost disease» is the lag in technological productivity. In fact, productivity growth rates in higher education exceed those in the economy for the entire period studied. Hence, there was no «cost disease» in 2012–2020 at all. The presence of this disease, however, appears to be confirmed by the manifestations of income deficits and price indices in Russian higher education.