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Do colleges + universities=economic growth?
Accuracy in Academia ^ | August 23, 2016 | Malcolm A. Kline

Posted on 08/23/2016 9:01:57 AM PDT by Academiadotorg

Academics have been arguing for decades that colleges and universities are engines of economic growth. Now they seem to have scientific proof, or do they?

"We estimate fixed effects models at the sub-national level between 1950 and 2010 and find that increases in the number of universities are positively associated with future growth of GDP per capita (and this relationship is robust to controlling for a host of observables, as well as unobserved regional trends)," Anna Valero and John Van Reenen, of the London School of Economics, write in a working paper that they published this month at the National Bureau of Economic Research (NBER). NBER is housed at Harvard.

How robust? "Our estimates imply that doubling the number of universities per capita is associated with 4% higher future GDP per capita," they calculate. Moreover, perhaps to no one's surprise, the United States has the largest number of universities. What might be somewhat surprising to many, though, are the three countries which follow the U. S. in the university sweepstakes--Brazil, Mexico and the Philippines.

When you look at the economies of this trio of nations, it is hard for the layman to discern either growth or the connection of academic life to economic activity. By a happy coincidence, the CIA World Factbook has profiled all of these countries*:

• On Brazil the Factbook noted that: "The awarding of the 2014 FIFA World Cup and 2016 Summer Olympic Games, the first ever to be held in South America, was seen as symbolic of the country's rise. However, since about 2013, Brazil has been plagued by a shrinking economy, growing unemployment, and rising inflation."

• On Mexico the Factbook observed that: "Ongoing economic and social concerns include low real wages, high underemployment, inequitable income distribution, and few advancement opportunities for the largely indigenous population in the impoverished southern states. Since 2007, Mexico's powerful drug-trafficking organizations have engaged in bloody feuding, resulting in tens of thousands of drug-related homicides."

• On The Philippines the Factbook reported that: "The unemployment rate has declined somewhat in recent years but remains high, hovering at around 6.5%; underemployment is also high, ranging from 18% to 19% of the employed. At least 40% of the employed work in the informal sector."

"The informal sector" of the economy is what economists usually obliquely call the black market. One usually does not need a college degree to be in it.

As academics never tire of telling us, correlation is not causation. Nevertheless, a look at what seem to be some key trend lines might suggest that we look for economic growth outside the Ivory Tower rather than within it.

*It should be noted that this is a U. S. government resource that has historically drawn its information from and, thus, shown something of a bias for, governments of foreign countries. Hence, in the waning days of the Soviet Union, CIA analysts would conclude that the USSR’s economy was "stumbling badly," even as it was imploding.


TOPICS: Business/Economy; Culture/Society; Foreign Affairs; Government
KEYWORDS: harvard; jobs; london; universities
Do universities actually create jobs for anybody but university professors?
1 posted on 08/23/2016 9:01:57 AM PDT by Academiadotorg
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To: Academiadotorg

Top Ten Employers in Allegheny County, PA (Pittsburgh):

1. UPMC
2. University of Pittsburgh
3. Federal Government
4. PNC
5. Giant Eagle
6. West Penn-Allegheny Health Network
7. Allegheny County Government
8. BNY Mellon
9. Carnegie-Mellon University
10. Pennsylvania State Government


2 posted on 08/23/2016 9:06:45 AM PDT by Buckeye McFrog
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To: Academiadotorg

Colleges and universities more than ever produce socialists. You tell me if that will grow any economy.


3 posted on 08/23/2016 9:18:16 AM PDT by BlueStateRightist (Government is best which governs least.)
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To: BlueStateRightist

Colleges and Universities today, all too often, are turning out hundreds of thousands of “graduates” who have earned degrees that have NO economic value or lead to gainful employment
A holder of a degree in (something)STUDIES is making and servicing coffee and a muffin, while a tech-school graduate with desperately needed SKILLS is forced(!) to choose among job offers.
Colleges and Universities may be called “Welfare for the over educated.”


4 posted on 08/23/2016 9:41:23 AM PDT by CaptainAmiigaf (New York Times: "We print the news as it fits our views.")
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To: Academiadotorg

It’s a macro-misallocation of capital. Due to enhanced credit for consumers. Essentially a big run on tulips which will end about the same way.....


5 posted on 08/23/2016 9:59:04 AM PDT by ConservativeDude
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To: Academiadotorg

Brick and mortar colleges are not generators of economic growth. They drain State taxes and the savings of parents with new costs each academic year.

Electronic colleges have less costs, but share in this economic growth myth.


6 posted on 08/23/2016 10:13:58 AM PDT by Terry L Smith
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To: CaptainAmiigaf

My son is involved with sports and is a grad assistant at his school. I told him to stay at the school and work towards becoming the Athletic Director and in the process, teach a business course.

He will make money at something he loves and get great benefits in the process.


7 posted on 08/23/2016 10:20:25 AM PDT by EQAndyBuzz (It appears as if Trump is our Yeltsin.)
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To: Academiadotorg

For the most part they suck wealth out of the economy and use it to pad their own nests and further the leftist, racist, globalist agenda.

That is wealth that could stay in the taxpayers pocket or be used in more rewarding, more productive sectors of the economy.

End all government subsidies, grants and other money flowing into the colleges and see what happens.

They would then have to operate like a business,

Offer a product that people want at an affordable cost or wither away.

No more halo wearing tenured communist professors knocking down high salaries for one class a week or a month.


8 posted on 08/23/2016 10:21:58 AM PDT by Iron Munro (<a href="httpsIf Illegals voted Rebublican 50 Million Democrats Would Be Screaming "Build The Wall!")
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To: Academiadotorg

They employee maintenance people, food service workers, security guards and such; Newark NJ has a pseudo-economy built on this stuff and it doesn’t put a dent in the larger employment problems of the city.


9 posted on 08/23/2016 10:26:42 AM PDT by kearnyirish2 (Affirmative action is economic warfare against white males (and therefore white families).)
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To: Academiadotorg

Calculus classes generate growth.
There’s never enough calculus experts, and it’s a skill transportable to any field.

If a field or profession doesn’t require calculus it’s junior college level at best.


10 posted on 08/23/2016 10:27:06 AM PDT by mrsmith (Dumb sluts: Lifeblood of the Media, Backbone of the Democrat/RINO Party!)
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To: CaptainAmiigaf

“Welfare for the over educated.”
or
“Daycare for the under-achieving.”


11 posted on 08/23/2016 10:29:31 AM PDT by mrsmith (Dumb sluts: Lifeblood of the Media, Backbone of the Democrat/RINO Party!)
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To: kearnyirish2

I used to notice that in Scranton too.


12 posted on 08/23/2016 10:35:26 AM PDT by Academiadotorg
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To: Academiadotorg

After Big Steel collapsed here in Pittsburgh in the late 70’s the powers that be decreed that our local economy would be rebuilt upon “Eds and Meds”.

As you can see, they got their wish. Two of our Top Ten employers are universities. Two more are hospital systems. Three are governments. Of the remainder, two are big banks, and one is a supermarket chain where most of the employees are part-time.

And for all except that last one government spending and policies call the shots. Scary!


13 posted on 08/23/2016 11:01:37 AM PDT by Buckeye McFrog
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To: Academiadotorg

Economic progress and increasing prosperity is the result of conditions where 4 factors are acting simultaneously: a rational culture, technological progress, capital accumulation, and acceptance of natural rights such as freedom and private property.


14 posted on 08/23/2016 11:43:30 AM PDT by mjp ((pro-{God, reality, reason, egoism, individualism, natural rights, limited government, capitalism}))
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To: Academiadotorg

No, they are drains on the economy just like any other government institution.


15 posted on 08/23/2016 11:57:59 AM PDT by sarge83
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To: Academiadotorg

Of course - for themselves. It’s a classic money laundering operation - extract cash from generally conservative productive taxpayers, give it to generally liberal minority students to lavish on totally liberal universities to hire more radically liberal professors and administrators, to indoctrinate the next generation in liberalism.


16 posted on 08/23/2016 7:42:34 PM PDT by Some Fat Guy in L.A. (Still bitterly clinging to rational thought despite it's unfashionability)
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To: Academiadotorg

When they moved the north Jersey arena from the Meadowlands to Newark, and put the battleship New Jersey in Camden instead of in the Hudson River/north Jersey, it was more of the same (predictably, neither move is paying off). Replacing real industries/jobs with government spending can’t revive these places; I do my part to boycott them.


17 posted on 08/24/2016 2:39:55 AM PDT by kearnyirish2 (Affirmative action is economic warfare against white males (and therefore white families).)
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To: Academiadotorg

The Filipinos are great at English-speaking call centers. It’s a relief whenever I reach one of them, rather than one in India!

Yet, they haven’t shown to have the really top technical talent that India does, so I don’t know how much they will be able to build on that.


18 posted on 08/24/2016 3:14:51 AM PDT by 9YearLurker
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To: mrsmith

Most top professions don’t actually require calculus—just minds that are good enough to handle calculus.


19 posted on 08/24/2016 3:17:01 AM PDT by 9YearLurker
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To: sarge83

part of the problem is that it is in the GDP, like government itself.


20 posted on 08/24/2016 8:33:36 AM PDT by Academiadotorg
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