Monday, May 26, 2003


Whenever the Australian or British governments try to rein in higher education expenditure or shift more of it to user-pays, we get all sorts of doom and gloom about dumbing down the clever country, undermining future prosperity etc. But what is the connection between education spending and economic growth anyhow? Not what we are being told, at least according to this study of US States: "Using data from all 50 states and spanning two decades... Three distinct regressions find no consistent, statistically significant impact of higher-education appropriations on states' economic growth. Indeed, a stronger relationship is found when the models are reversed, suggesting that a better case can be made that growth drives spending, rather than spending driving growth." "Comparing states' higher-education appropriations and gross state products also yields no solid evidence that spending drives economic growth."

I found similar results some time ago in Australia. See here or here

And using even broader statistical data, Ivar Berg long ago made the related point that a higher education is of questionable economic benefit to the individual being educated too.

Berg, I. (1973) Education and jobs: The great training robbery Harmondsworth, Mddx.: Penguin.


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