Retreating from Science: The Long-Run Effects of the 1970s U.S. Military Disinvestment from University Research

Daniel Gross, Bhaven Sampat and Hansen Zhang

No 35491, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Between 1945 and 1970, the U.S. Department of Defense was one of the country's largest funders of university research, and the most important in the physical sciences and engineering. Political pressures subsequently led to this funding declining nearly two-thirds by the mid-1970s and never fully recovering. We show that these cuts were felt across the U.S. research system, with ensuing declines in university scientists, PhD production, and research output. Early career scientists who were DoD-funded in 1970 were more likely than peers to leave universities, with many moving to industry. Though some became more likely to patent, in the aggregate, this appears to have reduced science-linked innovation in related technologies and compressed U.S. leadership in formerly DoD-driven fields. These effects extend to outcomes more closely related to military objectives: fewer PhDs entered the defense industrial base, and an initial increase in science-linked defense patenting in the most exposed technology areas gave way to a long-run decline.

JEL-codes: H56 I23 N42 N72 O31 O32 O33 O38 (search for similar items in EconPapers)
Date: 2026-07
Note: DAE LS PE POL PR
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