The Growing Allocative Inefficiency of the U.S. Higher Education Sector

James Adams () and J. Roger Clemmons

No 12683, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper presents new evidence on research and teaching productivity in universities using a panel of 102 top U.S. schools during 1981-1999. Faculty employment grows at 0.6 percent per year, compared with growth of 4.9 percent in industrial researchers. Productivity growth per researcher is 1.4-6.7 percent and is higher in private universities. Productivity growth per teacher is 0.8-1.1 percent and is higher in public universities. Growth in research productivity within universities exceeds overall growth, because the research share grows in universities where productivity growth is less. This finding suggests that allocative efficiency of U.S. higher education declined during the late 20th century. R&D stock, endowment, and post-docs increase research productivity in universities, the effect of nonfederal R&D is less, and the returns to research are diminishing. Since the nonfederal R&D share grows and is higher in public schools, this may explain the rising inefficiency. Decreasing returns in research but not teaching suggest that most differences in university size are due to teaching.

JEL-codes: J3 L3 O3 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-edu, nep-eff, nep-hrm, nep-ino and nep-sog
Date: 2006-11
Note: PR
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Related works:
Chapter: The Growing Allocative Inefficiency of the U.S. Higher Education Sector (2009)
Working Paper: The Growing Allocative Inefficiency of the U.S. Higher Education Sector (2006)
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