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Economist Krueger Says Online Courses May Boost Living Standards

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April 30 (Bloomberg) -- President Barack Obama’s top economist praised online educational courses as a “disruptive” development that may improve U.S. living standards.

“If you think about which country is going to take advantage of this tremendous progress that we can make in online instruction, I don’t think any country is better positioned” than the U.S., Alan Krueger, chairman of the White House Council of Economic Advisers said today.

Krueger, speaking at the Bloomberg Washington Economic Summit, said the U.S. benefits from “the best higher education in the world” and “the most clever entrepreneurs.”

A Bloomberg Government study released April 2 concluded that the rise of online courses promises to revolutionize higher education. Widespread acceptance of online education may restrain rising college costs, and as many as half of U.S. colleges might disappear in the next 15 years because of competition from online education, the study found.

Harvard University, Stanford University and the Massachusetts Institute of Technology are among institutions participating in MOOCs, or massive open online courses. Still, only 2.6 percent of U.S. institutions offer such courses and an additional 9.4 percent plan to, reflecting skepticism among some academics as they explore how to charge fees and grant course credit, according to a survey released Jan. 8 by Babson College in Wellesley, Massachusetts.

College administrators who have teamed up with online educational providers such as Coursera Inc. and EdX, say the free courses have the potential to lower costs and provide access to top U.S. professors.

Krueger, an economics professor currently on leave from Princeton University, said online courses have a “tremendous potential to raise living standards when we do find the format that works well.”

About 6.7 million students took at least one online course during the fall 2011 term, about 9 percent more than the previous year and more than four times the number in 2002. Almost a third of college students take at least one course online.

To contact the reporter on this story: Mike Dorning in Washington D.C. at mdorning@bloomberg.net.

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net.

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