Some of that growth has resulted from a phenomenon called Baumol’s disease, after the economist William J. Baumol, who described it in a 1965 article he wrote with William G. Bowen. The basic idea is that while productivity gains have made it possible to assemble cars with only a tiny fraction of the labor that was once required, it still takes four musicians nine minutes to perform Beethoven’s String Quartet No. 4 in C minor, just as it did in the 19th century.
One can plow through the first movement in about 9 minutes, but the whole quartet will take an ensemble closer to 24 minutes even if rushing a bit.
Also, as is often the case with Thaler, the empirical data does not agree with his suppositions very well. In fact, there has been a dramatic increase in many degree programs in the time to degree. The increases have not been even, for education the length of time is now 6 yars longer, an increase of 1/3. This trend peaked some two decades ago, but the ebb has been far less than the rapid increase in the 1970's.
What is interesting is that time to degree was lower when there was institutional support, indicating that when the institution was paying, it wanted people done. Conversely, for all students, in constant dollars, the average indebtedness has tripled, at a time when salaries have not gone up that much in the corresponding fields, so Thaler's explanation that a fixed time activity has to go up in unit cost because it is competing with technologically affected wages, is not born out by data. Any one who knows his work would not be surprised
However, these numbers are what one would expect if college were a rent, and the cost were some percentage of the difference between having, and not having a degree, because the difference would go up, even if wages for college graduates were rising slowly or stagnant, because what matters is the difference in risk adjusted wages, which includes, of course, unemployment risk.
The colloquial term is "a racket."