Rock Talk Age Data: Effective Indirect Cost Rates 1998-2014

Mar 26 2015 Published by under Uncategorized

A recent post on Rock Talk presented data on the amount of funding as a function of PI age group. These data were not presented in a terribly informative way but a file was available for downloading and Michael Hendricks normalized the data by the number of PIs in age group to reveal more interesting trends, discussed at Drugmonkey.

The downloadable data includes a breakdown of Direct and Total Costs. I have been looking for such data over a longer period than the last couple of year and thought I would take a look. Below is a plot of the Effective Indirect Cost Rate ((Total Costs-Direct Costs)/Direct Costs) for the overall data set.

Overall indirect graph

The Effective Rate drops from 44.2% to a low of 37.2% in 2012 before rising slightly over the past two years. These values are all somewhat lower than I anticipated based on my previous analysis on R01s.

To try to gain some insight, I looked at these data as a function of PI age group.

Indirect cost graph

The differences between the age groups quite substantial and surprising. For the lowest three PI age groups, the Effective Rate is relatively constant around 47%, consistent with my previous R01 indirect cost analysis. For the older PI age groups, the Effective Rate falls steadily from 1998 to 2012, reaching rates as low as 27.5% for PIs 61-65 in 2012.

I certainly do not understand what underlies these trends, but differences in mechanisms could certainly be involved. It may be that mechanisms as as U01s for larger efforts could be important. As always, it would be best to see data broken down by mechanism to facilitate accurate interpretation.

Any other thoughts on these data are most welcome.

20 responses so far

  • drugmonkey says:

    You are kidding right? You have no idea what is driving this? Really datahound? C'mon.....

    • datahound says:

      I am sorry if I am being dense. The differences are MUCH bigger than I would have expected. How do you account for the effective indirect cost rates dropping so fast and going below 35%?

  • drugmonkey says:

    Heh. I'm just saying it has to be differential access to job type across age groups. IME, higher IDC places are associated with softer money. Younger cohorts are either not getting access to hard money/ low(er) IDC jobs or are less able to compete from those jobs/institutions.

    As far as the sudden drop within the privileged hard money oldster ranks...well I've certainly seen oldsters run to hard money jobs and others retire from softmoney jobs when the going got tough. Maybe the younger folks have neither option.

    Any way you look at it, I bet job *category* is a huge input to these trends.

  • drugmonkey says:

    Relatedly, of course, PO choices to make exception pay on the basis of total costs, low IDC, etc might be accelerating the above mentioned cohort differences.

  • jmz4 says:

    Err, I'm also feeling a little out of the loop here. DM, could you explain for the dullards in the room?

  • Established PI says:

    I am really scratching my head over this. Whatever the explanation is needs to account for the big shift in 50+ categories that differs from the younger cohorts. One explanation is that older PIs are more likely to lose their positions at soft money places, but that is contradicted by other stats showing a swelling of the ranks of older PIs. What is your take, DH?

    • datahound says:

      I think the most likely hypothesis is the one related to subcontract F&A costs suggested by DMB. The growth of collaborative projects and co-PIs could account for this. This means that actual indirect costs may not be changing much, but subcontracted indirect costs are included in direct costs as that seems to be how NIH does the accounting for this.

  • Are administrative supplements charged an indirect rate? Are they a tiny enough fraction to ignore?

    • datahound says:

      Administrative supplements do receive indirect costs, but not for the part used for equipment. They are likely too small a fraction to effect these trends.

  • Dave says:

    I'm just saying it has to be differential access to job type across age groups

    That was my first thought as well. The difference is so clear that it has to be because the older guys tend are at more traditional departments at big teaching/research state schools (for example) that typically have IDCs around 50% or lower. Perhaps the younger guys are disproportionately fighting it out at higher IDC places, such as fancy-pants med schools and research institutes (i.e. soft-money)

    • datahound says:

      I agree that this is a factor, but I find it hard to believe that the institutional distribution of the senior age groups changed enough to account for the large downward trend.

  • BW says:

    Dave - This seems like the only reasonable explanation.

  • DMB says:

    How do you handle the F&A for subcontracts?

    • datahound says:

      These are NIH data but I would assume that they are handled as F&A on the parent grant. If this is not correct and they are counted as direct costs, this could effect the data.

      • DMB says:

        For the R01 project, in which I participate, the F&A for the subcontracts are included in the direct costs in the NIH Reporter. The F&A costs that the Reporter provides correspond only to the F&A for the parent institution. It results in the effective indirect cost rate of ~30% instead of ~55% in these case.

  • Eli Rabett says:

    Try this. It is a survival effect. Older guys have either fallen off the turnip truck and earning big money working from home on the internet or managed to get hard money positions with lower IDCs. The younger folk are just starting and have taken what they can get, which are soft money positions.

    • datahound says:

      These changes would have to be quite large to account for the observed drop. I have not seen any data that would suggest that this is true.

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