Working Paper: NBER ID: w14974
Authors: Dahlia K. Remler; Elda Pema
Abstract: Higher education institutions and disciplines that traditionally did little research now reward faculty largely based on research, both funded and unfunded. Some worry that faculty devoting more time to research harms teaching and thus harms students' human capital accumulation. The economics literature has largely ignored the reasons for and desirability of this trend. We summarize, review, and extend existing economic theories of higher education to explain why incentives for unfunded research have increased. One theory is that researchers more effectively teach higher order skills and therefore increase student human capital more than non-researchers. In contrast, according to signaling theory, education is not intrinsically productive but only a signal that separates high- and low-ability workers. We extend this theory by hypothesizing that researchers make higher education more costly for low-ability students than do non-research faculty, achieving the separation more efficiently. We describe other theories, including research quality as a proxy for hard-to-measure teaching quality and barriers to entry. Virtually no evidence exists to test these theories or establish their relative magnitudes. Research is needed, particularly to address what employers seek from higher education graduates and to assess the validity of current measures of teaching quality.
Keywords: Higher Education; Research Incentives; Teaching Quality
JEL Codes: I21; I23; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| faculty research (D29) | teaching quality (A21) |
| faculty research (D29) | higher-order skills (J24) |
| research activity (C90) | improved teaching outcomes (A21) |
| research faculty (I23) | increase cost of education for low-ability students (I24) |
| research serves as a signal of quality (L15) | labor market outcomes for graduates (J49) |