Federal Research Funding and STEM Education

This paper examines how federal science and engineering research funding—although intended to advance research—affects degree production and programs offered in science, technology, engineering, and mathematics (STEM). Using data from 1971–2016, the study implements a triple-difference design that exploits variation across colleges, time, and fields of study. The findings show that federal grants generate 27.4 percent of doctorates and 14.7 percent of undergraduate science, technology, engineering, and mathematics degrees, as well as 6.3 percent of doctoral programs and 3.7 percent of undergraduate programs in science, technology, engineering, and mathematics annually across 200 U.S. research universities. The impacts are concentrated in biology and engineering, aligning with the priorities of major funders such as the Department of Health and Human Services, the National Science Foundation, and the Department of Defense. These findings suggest that research grants to universities may generate a “double dividend,” simultaneously expanding the supply of skilled labor in targeted fields while also advancing scientific discovery.