STEM Education and Economic Performance in the American States

Ray, Rita (2015): STEM Education and Economic Performance in the American States.

Abstract

This paper examines the effect of STEM graduates on the level and growth of real GDP per capita for the 50 US states and the District of Columbia between 1990 and 2011. This paper also examines the effect of STEM graduates on approved utility patents per one million people. The findings show that the share of STEM graduates has a statistically significant positive effect on the level and growth of real GDP per capita. The results are robust irrespective of estimation methods. The paper finds that an increase in the share of STEM graduates increases the number of approved utility patents per one million people but that the statistical significance of the results depends on the estimation methods.

• Item Type: MPRA Paper
• Language: English
• Keywords: STEM Education, Economic Performance
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C33 - Panel Data Models ; Spatio-temporal Models; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C51 - Model Construction and Estimation; I - Health, Education, and Welfare > I2 - Education and Research Institutions > I24 - Education and Inequality; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O51 - U.S. ; Canada; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R19 - Other

References

Aghion, P. and Howitt, P. (1992). A Model of Growth Through Creative Destruction. Econometrica, 60 (2), 323 - 351.

Aghion, P., Boustan, L., Hoxby, C. and Vandenbussche, J. (2009). The Causal Impact of Education on Economic Growth: Evidence from U.S. Working Paper.

Almada, C., Blanco-Gonzalez, L., Patricia, E. and Thomas Fullerton, T. (2006). Econometric Evidence Regarding Education and Border Income Performance. Mountain Plains Journal of Business and Economics, 7, 11 - 24.

Andres, L. and Looker, D. E. (2001). Rurality and Capital: Educational Expectations and Attainments of Rural, Urban/Rural, and Metropolitan Youth. Canadian Journal of Higher Educational, 31 (2), 1 - 46.

Arellano, M. and Bond, S. (1991). Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations. Review of Economic Studies, 58 (2), 277 - 297.

Arellano M., Bover, O. (1995). Another Look at the Instrumental Variable Estimation of Error-Components Models. Journal of Econometrics, 68 (1), 29 - 51.

Arrow, K. J. (1962). Economic Welfare and the Allocation of Resources for Invention. NBER, Princeton University Press, 609 - 626.

Barro, R. J. (1991). Economic Growth in a Cross Section of Countries. The Quarterly Journal of Economics, 106 (2), 407 - 443.

Barro, R. J. (2001). Human Capital and Growth. The American Economic Review, 91 (2), 12 - 17.

Bils, M. and Klenow, P. J. (2000). Does Schooling Cause Growth?, The American Economic Review, 90 (5), 1160 - 1183.

Blöndal, S., Field, S. and Girouard, N. (2002). Investment in Human Capital Through Upper-Secondary and Tertiary Education. OECD Economic Studies, 34, 1 - 49.

Blundell, R. and Bond, S. (1998). Initial Conditions and Moment Restrictions in Dynamic Panel Data Models. Journal of Econometrics, 87 (1), 115 - 143.

Bronzini, R. and Piselli, P. (2009). Determinants of Long Run Regional Productivity with Geographical Spillovers: The Role of R&D, Human Capital and Public Infrastructure. Regional Science and Urban Economics, 39 (2), 187 - 199.

De Young, A. J. (1985). Economic Development and Educational Status in Appalachian Kentucky. Comparative Education Review, 29 (1), 47 - 67.

Dodge, E. R. (2003). A Circle of Prosperity: Educational Performance and Per-Capita Income in Central Indiana Counties. 2003 Proceedings of the Midwest Business Economics Association, 134 - 138.

Domazlicky, B. R., Benne, A., McMahon, M., Myers, C. and Skinner, B. (1996). Measuring the Cost of High School Noncompletion in Southeast Missouri. Journal of Economics, 22 (1), 81 - 86.

Freeman, R. B. (2005). Does Globalization of the Scientific/Engineering Workforce Threaten U.S. Economic Leadership?. NBER Working Paper No. 11457.

Fullerton, T. M. Jr. (2001). Educational Attainment and Border Income Performance. Federal Reserve Bank of Dallas Economic and Financial Review, 3rd Quarter, 2 - 10.

Fullerton, T. M. Jr., González Monzón, A. and Walke A. G. (2013). Physical Infrastructure and Economic Growth in El Paso, 1976 - 2009. Economic Development Quarterly, 27 (4), 363 - 373.

Fullerton, T. M. Jr., Morales, C. R. and Walke A. G. (2014). The Effects of Education, Infrastructure, and Demographics on Regional Income Performance in Missouri. Regional & Sectoral Economic Studies 14 (1), 5 - 25.

Furman, J. L., Porter, M. E. and Stern, S. (2002). The Determinants of National Innovative Capacity. Research Policy, 31, 899 – 933.

Garofalo, G. A. and Yamarik, S. (2002). Regional Convergence: Evidence from a New State-by-State Capital Stock Series. The Review of Economics and Statistics, 84, (2), 316 - 323.

Giovanni, P., Shih, K. and Sparber, C. (2013). STEM Workers, H1B Visas and Productivity in US Cities. Working Paper.

Gottlieb, P. D. and Fogarty, M. (2003). Educational Attainment and metropolitan Growth. Economic Development Quarterly, 17 (4), 325 - 336.

Grossman, G. M. and Helpman, E. (1991). Innovation and Growth in the Global Economy. Cambridge: MIT Press.

Jones, C. I. (1995). Time Series Tests of Endogenous Growth Models. The Quarterly Journal of Economics, 110 (2), 495 - 525.

Lucas, R. E. Jr. (1988). On the Mechanics of Economic Development. Journal of Monetary Economics, 22, 3 - 42. North-Holland.

Murphy, K. M., Shleifer, A. and Vishny, R. W. (1991). The Allocation of Talent: Implications for Growth. The Quarterly Journal of Economics, 106 (2), 503 - 530.

Roodman, D. (2009). How to do xtabond2: An Introduction to Difference and System GMM in Stata. The Stata Journal, 9 (1), 86 - 136.

Romer, P. M. (1986). Increasing Returns and Long-Run Growth. The Journal of Political Economy, 94 (5), 1002 - 1037.

Romer, P. M. (1990). Endogenous Technological Change. The Journal of Political Economy, 98 (5), The Problem of Development: A Conference of the Institute for the Study of Free Enterprise Systems, S71 - S102.

Sloboda, B. W. (1999). Measuring the Costs of High School Dropouts on the Region of Southern Illinois. Journal of Economics, 25 (2), 89 - 101.

Sylwester, K. (2001). R&D and Economic Growth. Knowledge. Technology & Policy, 13 (4), 71 - 84.

Thompson, M. A. (1998). Assessing the Economic Cost of High School Noncompletion. Journal of Economics and Finance, 22 (2-3) 109 - 117.

Trostel, P., Walker, I. and Woolley, P. (2002). Estimates of the Economic Return to Schooling for 28 Countries. Labour Economics, 9, 1 - 16.