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

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  • RICHARD VEDDER

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.

Suggested Citation

  • Richard Vedder, 2004. "Private vs. Social Returns to Higher Education: Some New Cross-Sectional Evidence," Journal of Labor Research, Transaction Publishers, vol. 25(4), pages 677-686, October.
    • Handle: RePEc:tra:jlabre:v:25:y:2004:i:4:p:677-686
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    Citations

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    Cited by:

    1. Norman Baldwin & Stephen Borrelli, 2008. "Education and economic growth in the United States: cross-national applications for an intra-national path analysis," Policy Sciences, Springer;Society of Policy Sciences, vol. 41(3), pages 183-204, September.
    2. Abida Naurin & Panayiotis M. Pourpourides, 2023. "On the causality between household and government spending on education: evidence from a panel of 40 countries," Empirical Economics, Springer, vol. 65(2), pages 567-585, August.
    3. William M. Bowen & Haifeng Qian, 2017. "State spending for higher education: Does it improve economic performance?," Regional Science Policy & Practice, Wiley Blackwell, vol. 9(1), pages 7-23, March.
    4. Ilya Prakhov, 2019. "The Determinants Of Expected Returns On Higher Education In Russia: A Human Capital Theory Perspective," HSE Working papers WP BRP 50/EDU/2019, National Research University Higher School of Economics.
    5. Olga Kotomina & Ilya Prakhov & Alexandra Sazhina, 2019. "Parental Involvement And The Educational Strategies Of Youth In Russia," HSE Working papers WP BRP 53/EDU/2019, National Research University Higher School of Economics.
    6. Prakhov, Ilya & Kotomina, Olga & Sazhina, Alexandra, 2020. "Parental involvement and the educational trajectories of youth in Russia," International Journal of Educational Development, Elsevier, vol. 78(C).
    7. 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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