Via Jim Bacon’s Wonk Salon comes a study of how cuts to higher education spending in Oklahoma did not result in the sky falling, the state’s economy going toes-up or any of the other horrors usually attributed to the possibility that colleges and universities might have to make do with fewer taxpayer dollars. The study covers some issues unique to Oklahoma (such as graduates leaving the state after they get that all-important sheepskin). But the conclusion the authors’ draw is more universal:
Using econometric models, we have strong statistical evidence that additional state investment in higher education does not yield additional economic growth. Related to the Bowen Rule, these findings are due in part to rampant inefficiencies and little in the way of results from how universities spend their money. Students are only modestly engaged, learn little, and frequently do not graduate. Economic benefits are difficult to realize when universities are not succeeding in widely enhancing human capital. Even when students succeed in graduating, many of Oklahoma’s graduates end up moving out of the state due to a general lack of labor market opportunities.
Our findings indicate that public fears and outcries over cuts in state appropriations for higher education are unfounded. State investment in higher education
is not an engine for economic growth as conventional wisdom holds. Rather than continuing to blindly pass money from taxpayers to university bureaucracies, Oklahoma would be well-suited to rethink its long-term economic growth strategy.
The lessons for Virginia’s political class are plain: increased higher ed spending is not a silver bullet. But cracking the bipartisan belief that more spending on higher education is always good, and more sheepskins are always better, will not be easy.
For more on this topic, check out our interview with Cato’s Neal McCluskey.
(Cross-posted at Score Radio Network)
