IDEAS home Printed from https://ideas.repec.org/a/aea/jecper/v35y2021i1p185-206.html
   My bibliography  Save this article

Why Does the United States Have the Best Research Universities? Incentives, Resources, and Virtuous Circles

Author

Listed:
  • W. Bentley MacLeod
  • Miguel Urquiola

Abstract

Around 1875, the US had none of the world’s leading research universities; today, it accounts for the majority of the top-ranked. Many observers cite events surrounding World War II as the source of this reversal. We present evidence that US research universities had surpassed most countries’ decades before World War II. An explanation of their dominance must therefore begin earlier. The one we offer highlights reforms that began after the Civil War and enhanced the incentives and resources the system directs at research. Our story is not one of success by design, but rather of competition leading American colleges to begin to care about research. We draw on agency theory to argue that this led to increasing academic specialization, and in turn, to more precise measures of professors’ research output. Combined with sorting dynamics that concentrated talent and resources at some schools—and the emergence of tenure—this enhanced research performance.

Suggested Citation

  • W. Bentley MacLeod & Miguel Urquiola, 2021. "Why Does the United States Have the Best Research Universities? Incentives, Resources, and Virtuous Circles," Journal of Economic Perspectives, American Economic Association, vol. 35(1), pages 185-206, Winter.
    • Handle: RePEc:aea:jecper:v:35:y:2021:i:1:p:185-206
    DOI: 10.1257/jep.35.1.185
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/doi/10.1257/jep.35.1.185
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/jep.35.1.185.appx
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/jep.35.1.185.ds
    Download Restriction: no
    File URL: https://libkey.io/10.1257/jep.35.1.185?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Jennifer Brown, 2011. "Quitters Never Win: The (Adverse) Incentive Effects of Competing with Superstars," Journal of Political Economy, University of Chicago Press, vol. 119(5), pages 982-1013.
    2. Charles T. Clotfelter, 2010. "Introduction to "American Universities in a Global Market"," NBER Chapters, in: American Universities in a Global Market, pages 1-29, National Bureau of Economic Research, Inc.
    3. Charles T. Clotfelter, 2010. "American Universities in a Global Market," NBER Books, National Bureau of Economic Research, Inc, number clot08-1, March.
    4. Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March.
    5. Barber, William J, 1987. "Should the American Economic Association Have Toasted Simon Newcomb at Its 100th Birthday Party?," Journal of Economic Perspectives, American Economic Association, vol. 1(1), pages 179-183, Summer.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Erina Ytsma, 2022. "Effort and Selection Effects of Performance Pay in Knowledge Creation," CESifo Working Paper Series 10153, CESifo.
    2. Aloys Prinz & Thomas Ehrmann, 2022. "Academia as a league system," Journal of Business Economics, Springer, vol. 92(7), pages 1065-1092, September.
    3. Pavlov, Oleg V. & Katsamakas, Evangelos, 2023. "Tuition too high? Blame competition," Journal of Economic Behavior & Organization, Elsevier, vol. 213(C), pages 409-431.
    4. Chiara Zanardello, 2023. "Market forces in Italian academia today (and yesterday)," Scientometrics, Springer;Akadémiai Kiadó, vol. 128(1), pages 651-698, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. MacLeod, W. Bentley & Urquiola, Miguel, 2020. "Why Does the U.S. Have the Best Research Universities? Incentives, Resources, and Virtuous Circles," IZA Discussion Papers 13203, Institute of Labor Economics (IZA).
    2. Miguel Urquiola, 2023. "Higher Education in the United States: Laissez‐Faire, Differentiation, and Research," Asian Economic Policy Review, Japan Center for Economic Research, vol. 18(2), pages 196-213, July.
    3. Lorelli Nowell & Glory Ovie & Natasha Kenny & Michele Jacobsen, 2020. "Postdoctoral scholars’ perspectives about professional learning and development: a concurrent mixed-methods study," Palgrave Communications, Palgrave Macmillan, vol. 6(1), pages 1-11, December.
    4. Gonzalez, Cristina & Liu, Yamin & Shu, Xiaoling, 2012. "The Faculty Promotion And Merit System In China And The United States: The Cases Of Wuhan University And The University Of California, Davis," University of California at Berkeley, Center for Studies in Higher Education qt44v8533m, Center for Studies in Higher Education, UC Berkeley.
    5. Juan Pablo Atal & José Ignacio Cuesta & Felipe González & Cristóbal Otero, 2024. "The Economics of the Public Option: Evidence from Local Pharmaceutical Markets," American Economic Review, American Economic Association, vol. 114(3), pages 615-644, March.
    6. Manuel Ammann & Philipp Horsch & David Oesch, 2016. "Competing with Superstars," Management Science, INFORMS, vol. 62(10), pages 2842-2858, October.
    7. Maria De Paola & Vincenzo Scoppa, 2010. "Peer group effects on the academic performance of Italian students," Applied Economics, Taylor & Francis Journals, vol. 42(17), pages 2203-2215.
    8. Damiano, Ettore & Li, Hao & Suen, Wing, 2012. "Competing for talents," Journal of Economic Theory, Elsevier, vol. 147(6), pages 2190-2219.
    9. Basteck, Christian & Klaus, Bettina & Kübler, Dorothea, 2021. "How lotteries in school choice help to level the playing field," Games and Economic Behavior, Elsevier, vol. 129(C), pages 198-237.
    10. George A. Akerlof & Rachel E. Kranton, 2002. "Identity and Schooling: Some Lessons for the Economics of Education," Journal of Economic Literature, American Economic Association, vol. 40(4), pages 1167-1201, December.
    11. Kuhnen, Camelia M., 2010. "Searching for Jobs: Evidence from MBA Graduates," MPRA Paper 21975, University Library of Munich, Germany.
    12. Patrick Bayer & Fernando Ferreira & Robert McMillan, 2007. "A Unified Framework for Measuring Preferences for Schools and Neighborhoods," Journal of Political Economy, University of Chicago Press, vol. 115(4), pages 588-638, August.
    13. Lackner, Mario & Stracke, Rudi & Sunde, Uwe & Winter-Ebmer, Rudolf, 2015. "Are Competitors Forward Looking in Strategic Interactions? Evidence from the Field," Economics Series 319, Institute for Advanced Studies.
    14. Manna, Ester, 2013. "Mixed Duopoly with Motivated Teachers," MPRA Paper 52041, University Library of Munich, Germany.
    15. Robin Boadway & Nicolas Marceau & Maurice Marchand, 1996. "Issues in decentralizing the provision of education," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 3(3), pages 311-327, July.
    16. Jacob M. Markman & Eric A. Hanushek & John F. Kain & Steven G. Rivkin, 2003. "Does peer ability affect student achievement?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(5), pages 527-544.
    17. Renato Gomes & Alessandro Pavan, 2013. "Cross-Subsidization and Matching Design," Discussion Papers 1559, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    18. Oliver Himmler & Robert Schwager, 2013. "Double Standards in Educational Standards – Do Schools with a Disadvantaged Student Body Grade More Leniently?," German Economic Review, Verein für Socialpolitik, vol. 14(2), pages 166-189, May.
    19. Song, Yang, 2019. "Sorting, school performance and quality: Evidence from China," Journal of Comparative Economics, Elsevier, vol. 47(1), pages 238-261.
    20. Donald R. Haurin & Stuart S. Rosenthal, 2009. "Language, Agglomeration and Hispanic Homeownership," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 37(2), pages 155-183, June.

    More about this item

    JEL classification:

    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • N31 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: Pre-1913
    • N32 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: 1913-

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:jecper:v:35:y:2021:i:1:p:185-206. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.