An Economic Perspective on Higher Education in the USA

The global pre-eminence of US higher education is evident not only in the high places that US universities achieve in various global rankings. US higher education’s share of GDP, about 3.5 per cent, is higher than in other countries; it produces a large number of graduates and this lead is particularly pronounced in doctoral and other advanced degrees. Its research output, whether measured by journal publications, patents, Nobel Prizes and so on, also leads other countries, and its innovations in the ‘massification’ and globalization of higher education, in the organization and management of universities, and in the development of new degrees and programs of study, are often imitated by foreign institutions. The attractiveness of US degrees for foreign students and of US university employment opportunities for foreign professors suggests that it is very competitive with higher education systems in other countries. If higher education were considered as an industry, such as the steel or computer industries, then US universities would be seen as the leaders of that industry, and the USA would be seen as having major competitive advantage over other countries.