The Economic Value of Publicly Supported Education and Research

This article by economist William Shobe with UVA's Cooper Center explores how the functions of the modern research university contribute to civic and economic well-being. It considers what the evidence tells us about the value to the state of public support for major research universities. Public support for higher education dates back to the country's beginnings and reflects the widespread belief that this public investment will create substantial value for society. Thomas Jefferson clearly held the view that a publicly supported "academical community" dedicated to education, service, and inquiry would benefit the commonwealth by aiding commerce and educating community leaders capable of enlightened self-government. Many of Virginia's major universities, now important centers of education and research, have leveraged the public funding for their activities to become engines of growth for the whole state. The activities of institutions such as the University of Virginia and Virginia Tech, for example, now bring into the state external funding greater than their annual appropriations of public funds. Support of top-quality higher education across the state enhances the equality of educational opportunities for Virginians and provides a steady supply of high-quality graduates, attracting firms in search of talented and entrepreneurial employees. If the major research universities in the state are able to maintain their high rankings in teaching and research in spite of reductions in state support, it will be because they have responded to the competitive pressures by shifting university priorities in ways that will maintain and enhance their status. Success in this competition for academic status will ensure that they will continue to provide an important contribution to the state's economy.
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Publication Series
The Virginia News Letter