The Growing Allocative Inefficiency of the U.S. Higher Education Sector

James D. Adams and J. Roger Clemmons

in Science and Engineering Careers in the United States

Published by University of Chicago Press

Published in print July 2009 | ISBN: 9780226261898
Published online February 2013 | e-ISBN: 9780226261904 | DOI:
The Growing Allocative Inefficiency of the U.S. Higher Education Sector

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This chapter presents new evidence on the productivity of U.S. universities. Interest in this subject originates with recent developments in U.S. higher education that strike as noteworthy and perhaps troubling. First, despite their high state, growth of employment and output in top U.S. research universities has slowed down in recent years. And second, growth of university research has not kept pace with that of industrial research. This chapter finds evidence of growing allocative inefficiency in U.S. higher education. The most compelling evidence for this claim derives from research output, which is better measured than teaching output at the same time. It is found that the universities whose productivity grows less rapidly experience more rapid growth in research share. The chapter suggests a different and more privatized approach to funding universities that would place greater reliance on parental finance of teaching, and federal and private foundation finance of research. In any event, some solution seems urgent if the United States is to retain its preeminence in higher education, and subsequently in academic and industrial science, technology, and innovation.

Keywords: sciences; engineering; United States; universities; higher education; industrial science; technology

Chapter.  10916 words.  Illustrated.

Subjects: Econometrics and Mathematical Economics

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