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Title: A Framework for Quantifying the Economic Spillovers from Government Activity Applied to Science

Citation Type: Miscellaneous

Publication Year: 2011

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Abstract: Governments invest heavily in science and those investments are increasingly being justified in terms of the economic spillovers they generate, such as jobs created. Yet there are no accepted methods for quantifying these benefits and their magnitude is widely disputed. We analyze the ways in which science generates economic benefits; lay out how to (and not to) quantify those benefits; and provide a range of estimates. While our estimates vary considerably across specifications, our baseline estimates indicate that a $1B increase in science spending might raise wages by $1.68B and that these wage effects are likely to understate the effects on productivity. We also find that a $1B increase in science might generate 92,500 jobs, with 90% of these jobs being missed even using state-of-the-art job creation methods. Our methods can be applied to measure the local productivity spillovers from other government activity as well.

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Authors: Subhra, Saha B.; Weinberg, Bruce A.

Publisher: Cleveland State University

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure

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