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Private vs. Social Returns to Higher Education: Some New Cross-Sectional Evidence

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  • RICHARD VEDDER
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    Abstract

    University presidents and some academic economists assert that expenditures on higher education further human capital formation and thus promote economic growth. Rising earnings differentials between college and high school educated persons seem consistent with this hypothesis. Statistical evidence, however, suggests that increased state governmental spending on universities is negatively associated with economic growth, even though having more college graduates, ceteris paribus, is growth enhancing. Further evidence shows that governmental higher education spending has little impact on college participation. The notions that colleges are primarily credentialing devices and that universities have used incremental funds largely for non-instructional purposes are consistent with the results.

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    Bibliographic Info

    Article provided by Transaction Publishers in its journal Journal of Labor Research.

    Volume (Year): 25 (2004)
    Issue (Month): 4 (October)
    Pages: 677-686

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    Handle: RePEc:tra:jlabre:v:25:y:2004:i:4:p:677-686

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    Web page: http://transactionpub.metapress.com/link.asp?target=journal&id=110581

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    Cited by:
    1. John W. Miller & Mark Skidmore, 2005. "Higher Education Completion And Related Factors," Working Papers 05-10, UW-Whitewater, Department of Economics.

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