Michael Pravica, a UNLV physics professor attacked my Sunday column in the Las Vegas Review Journal on the relationship between higher education and economic growth and unemployment. Of course Pravica fails to address almost every point I raised.
My favorite line from his letter in the Las Vegas Review Journal,
California is in deep crisis not because of its great universities but because of corporate mismanagement and outright theft from its citizens by companies such as Enron. Despite this, California is still doing far better than Nevada economically.First, I never said California is in a crisis because of the universities, I said California is in a crisis despite their great universities. Second, its laughable to suggest that Enron, which collapsed in 2001, is the culprit of California's economic woes. Third, the theft is being done by California's own government and public employees. Finally, goodness gracious Pravica, you're a professor you should know better than assume that because one state is doing better than another the difference in results must be the difference in inputs (in this case higher education). Heck, its even likely that the difference between California and Nevada isn't even statistically significant. Besides, it is only RECENTLY that California has done better than Nevada...
It's for you Michael
Next, Pravica focuses on my comment that a top university has little impact on unemployment rates. There are 100 of them in 32 states, sure it is a small sample size, but why, oh why, Pravica did you ignore my regressions on college attainment rates within states? See this blog post for more information. So why did I look at just the Top 100 universities for that first analysis? Well, its simple, UNLV and UNR keep trying to be one and keep claiming that if they can be a top university they can help grow our economy.
Pravica's response did raise one good question - what is the relationship between higher education spending and college attainment, unemployment and economic growth. I decided to check this out. Remember these are very simple regressions and should not be taken as the final answer on the relationship between higher education and the economy. However, it should raise your eyebrow because I failed to find any of the relationships higher education officials claim exist.
I'm looking at higher education per-pupil spending (page 29) on education and research ONLY by state and college attainment rates by state. The higher education spending data is from 2006 and looks ONLY at spending related to education and research and so excludes athletics, plant operations, debt repayment and capital projects. This should bias the results in favor of Pravica and all others who think more spending is related to better outcomes.
State per-pupil spending and college attainment rates 2007: R Square 0.007757 | Adjusted R Square -0.01291 | P-value 0.543056 | t Stat 0.612564 |Coefficients 0.000142
State per-pupil spending and college attainment rates 2008: R Square 0.013684 | Adjusted R Square -0.00686 | P-value 0.4185 | t Stat 0.816056 | Coefficients 0.000191
As I suspected more state spending on education and research in higher education is NOT correlated with more college graduates within a state.
I'm going to look at the same 2006 state per-pupil spending on education and research in higher education and compare it to the GDP growth between 2007 and 2009 (2009 is latest data available).
State per-pupil spending and GDP growth 2007-2009: R Square 0.007759737 | Adjusted R Square -0.012911935 | P-value 0.542978074 | t Stat -0.612682824 | Coefficients -1.25714E-06
You don't need to know how to read a regression to know what is going on. In fact, you may have figured it out by the appearance of Chuck Norris on my blog again. Yup, the relationship is random. It is also incredibly weak to the point of state spending on higher education being a useless predictor of economic performance. Interestingly though, the coefficient was negative which means the very weak random likely non-existent relationship we see results in lower economic growth the more state's spend on education.
For giggles I looked at total spending (State spending + student tuition) and GDP growth from 2007-2009. The relationship becomes stronger and less random (but not enough to say a relationship exists) and the coefficient remains negative.
State and pupil tuition spending and GDP growth 2007-2009: R Square 0.035786 | Adjusted R Square 0.015698 | P-value 0.188265 | t Stat -1.33472 | Coefficients -2.4E-06
I'm going to examine both state and total spending on education and research and compare it to unemployment rates from Dec 2010. I know its not the annual average, but these numbers are fairly close to the annual average. Plus I'm hungry and I couldn't come up with a usable database without having to create my own. I'll return to this later, likely still justified by my original findings.
State spending and December 2010 unemployment: R Square 0.014889 | Adjusted R Square -0.00563 | P-value 0.398591 | t Stat 0.851735 | Coefficients 9.32E-05
Total spending (state + tuition) and December 2010 unemployment: R Square 0.043793 | Adjusted R Square 0.023872 | P-value 0.144698 | t Stat 1.48267 | Coefficients 0.000144
Again, nothing is going on here. The relationships are very weak and likely random. The relationship does strengthen when you throw in student tuition with the state funding, but it is still not statistically significant. Results were pretty much the same for 2009 unemployment.
One very interesting regression did stand out however. The more tuition money was paid toward education and research the more college graduates there were in a state. The coefficient suggests that for every $1,286 tuition increases we see a 1 point gain in college attainment rates.
Tuition spending on education and research and college attainment in 2008: R Square 0.170988 | Adjusted R Square 0.153717 | P-value 0.002837 | t Stat 3.146468 | Coefficients 0.000802