Investing in Higher Education…Investing?

By June 24, 2007General

An argument for more attention to community colleges and vocational training? From Inside Higher Ed:

Greater prosperity requires more jobs, and more jobs require more economic growth. And the best way to do that, this chain of reasoning continues, is to make investments in higher education and high-tech research. How else to cultivate the next generation of highly skilled, motivated workers for today’s ever-dynamic information economy?
That view — promoted by college presidents, governors and experts in the economics of higher education — is often cited in the quest for more funding for state university systems. But what if it’s wrong?

A new study published Wednesday by the free-market-oriented, Michigan-based Mackinac Center for Public Policy suggests just that. Its major finding, that increased state appropriations for higher education actually correlate with lower economic growth, is counter to both established understanding and conventional wisdom.

The study, Michigan Higher Education: Facts and Fiction,” is also sponsored by the Center for College Affordability and Productivity.

The findings make intuitive sense, at least to this writer who’s spent a lot of time around state legislatures. The failure is not higher education’s, per se, but rather the polity’s.

Policymakers who promote spending on higher education as a priority tend to have lots of spending priorities: K-12 education, social services, economic development “partnerships,” etc, all requiring higher taxes and a larger state government. While we’re at it, maybe we should regulate the business sector, too. Not a welcoming environment for private-sector investment.

The study’s author, Ohio University economist Richard Vedder, appears to have reached a similar conclusion:

Empirical evidence suggests that a more promising approach would be to constrain government and universities in their spending growth, using the fruits of higher tax revenues over time to lower the tax burden.

Yep.

Hat tip: George Leef.

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