Rethinking the Economic Impact of Higher Education
Rebecca Johnson, Kristen Aldred Cheek
Bruce Weber and Laurie Houston
Oregon State University
Abstract
In an era of increased government accountability, public universities are under heightened
pressure to understand and explain the impact of public support for higher education. This paper
looks at three ways economists have attempted to estimate the value of public higher education:
1) expenditure impact studies; 2) social rate of return analyses; and 3) "growth accounting"
studies that estimate the marginal contribution of higher education activities (teaching, research and
extension) to economic growth. The paper presents results from an analysis of the expenditure
impacts of Oregon State University or Benton County and the state of Oregon and critically reviews
the economics literature on the social rate of return and growth accounting studies. The paper
suggests that none of these studies captures the types of dynamic externalities that may be among
higher education's most important regional economic contributions.
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