The Economics of Online Postsecondary Education: MOOCs, Nonselective Education, and Highly Selective Education

Caroline Hoxby

No 19816, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: I consider how online postsecondary education, including massive open online courses (MOOCs), might fit into economically sustainable models of postsecondary education. I contrast nonselective postsecondary education (NSPE)in which institutions sell fairly standardized educational services in return for up-front payments and highly selective postsecondary education (HSPE) in which institutions invest in students in return for repayments much later in life. The analysis suggests that MOOCs will be financially sustainable substitutes for some NSPE, but there are risks even in these situations. The analysis suggests that MOOCs will be financially sustainable substitutes for only a small share of HSPE and are likely to collapse the economic model that allows HSPE institutions to invest in advanced education and research. I outline a non-MOOC model of online education that may allow HSPE institutions both to sustain their distinctive activities and to reach a larger number of students.

JEL-codes: A2 I2 L33 L86 (search for similar items in EconPapers)
Date: 2014-01
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Published as Caroline M. Hoxby, 2014. "The Economics of Online Postsecondary Education: MOOCs, Nonselective Education, and Highly Selective Education," American Economic Review, American Economic Association, vol. 104(5), pages 528-33, May.

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Journal Article: The Economics of Online Postsecondary Education: MOOCs, Nonselective Education, and Highly Selective Education (2014)
Working Paper: The Economics Of Online Postsecondary Education: MOOCs, Nonselective Education, And Highly Selective Education (2014)
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