College Spending Results Questioned

More money doesn't yield better results

In praising Gov. Rick Snyder's proposed $80 million increase in aid to public universities, University of Michigan President Mary Sue Coleman said: "States that do not invest in higher education will not win in the 21st century" and spending more "is investing in job growth."

There is little evidence to back up these statements.

No matter how you look at the data, states that spend more on higher education do not have more college graduates or better economic results. Comparing states by graduate population and economic growth yields no correlation. Additionally, a 2007 study by Richard Vedder, a professor at Ohio University and an adjunct scholar with the Mackinac Center for Public Policy, found there is a negative association with spending on higher education and economic growth.

This suggests that the nearly $1.5 billion Michigan spends every year on public universities, which would cover the amount Gov. Snyder wants to increase road funding, is being poorly spent. The massive increase in total public spending on higher education nationwide has left us with a system where the poor are even less likely to obtain a degree and have a student dropout rate near 50 percent. For those who do graduate, their degrees are often in areas unlikely to be used in the workplace.

College graduates are mobile and they will go where there are jobs. But the state should look for ways to attract all people by using the money spent on higher education in ways that will attract more jobs.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.