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How Would Universities Respond to Increased Federal Support for Graduate Students?

In: Studies of Supply and Demand in Higher Education


  • Ronald G. Ehrenberg
  • Daniel I. Rees
  • Dominic J. Brewer


Projections of forthcoming shortages of Ph.D.s and thus new faculty for the academic sector, abound. Among the policies proposed to prevent such shortages is increased federal support for graduate students. Lost in the policy debate, however, has been concern for the possibility that increased federal support might induce academic institutions to redirect their own internal resources in a way that at least partially frustrates the intent of the policy change. Our paper presents an analysis of this issue using institutionally-based data for science and engineering fields. We find that doctorate-producing universities do respond to changes in external support for graduate students by altering the number of students they support on institutional funds. While adjustments to changes in external support levels appear to be quite rapid, the magnitude of these responses are quite small. On average, an increase of 100 in the number of students supported by external funds is estimated to reduce the number supported on institutional funds by 22 to 23. We also find that the magnitude of the response varies across fields, that within the science and engineering fields there is some fungibility of external support across fields, and that changes in external support influence the distribution of internal support by type of support (fellowship, research assistantship, and teaching assistantship) .
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Suggested Citation

  • Ronald G. Ehrenberg & Daniel I. Rees & Dominic J. Brewer, 1993. "How Would Universities Respond to Increased Federal Support for Graduate Students?," NBER Chapters,in: Studies of Supply and Demand in Higher Education, pages 183-210 National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberch:6101

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    References listed on IDEAS

    1. Edward M. Gramlich & Harvy Galper, 1973. "State and Local Fiscal Behavior and Federal Grant Policy," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 4(1), pages 15-66.
    2. Michael E. Borus & Daniel S. Hamermesh, 1978. "Estimating Fiscal Substitution by Public Service Employment Programs," Journal of Human Resources, University of Wisconsin Press, vol. 13(4), pages 561-565.
    3. Ronald G. Ehrenberg & Richard Chaykowski, 1988. "On Estimating the Effects of Increased Aid to Education," NBER Chapters,in: When Public Sector Workers Unionize, pages 245-270 National Bureau of Economic Research, Inc.
    4. Hoenack, Stephen A. & Pierro, Daniel J., 1990. "An econometric model of a public university's income and enrollments," Journal of Economic Behavior & Organization, Elsevier, vol. 14(3), pages 403-423, December.
    5. George E. Johnson & James D. Tomola, 1977. "The Fiscal Substitution Effect of Alternative Approaches to Public Service Employment Policy," Journal of Human Resources, University of Wisconsin Press, vol. 12(1), pages 3-26.
    6. David W. Breneman & Dean T. Jamison & Roy Radner, 1976. "The Ph.D. Production Process," NBER Chapters,in: Education as an Industry, pages 1-52 National Bureau of Economic Research, Inc.
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    Cited by:

    1. Berger, Mark C. & Kostal, Thomas, 2002. "Financial resources, regulation, and enrollment in US public higher education," Economics of Education Review, Elsevier, vol. 21(2), pages 101-110, April.
    2. Schenk, Tom, Jr., 2007. "The effects of graduate-student unionization," ISU General Staff Papers 2007010108000015881, Iowa State University, Department of Economics.
    3. Connolly, Laura S., 1997. "Does external funding of academic research crowd out institutional support?," Journal of Public Economics, Elsevier, vol. 64(3), pages 389-406, June.
    4. A. Payne, 2001. "Measuring the Effect of Federal Research Funding on Private Donations at Research Universities: Is Federal Research Funding More than a Substitute for Private Donations?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 8(5), pages 731-751, November.

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