Higher Education Teaching and Training System and Economic Performance: An Empirical Investigation

Overview & Synopsis

This paper investigates the impact of higher education characteristics on economic performance. Despite a relatively plethoric literature, there is still a clear lack of understanding of the interaction of teaching and training with knowledge, innovation and economic performance; the heterogeneity across levels of economic development; and the mediating role of innovation and knowledge. The existing literature on higher education policy, economics and innovation helps us identify four key higher education characteristics relating to size, funding, subsidies and mismatching. Cross-country education, patents and publications data are used to estimate the direct and indirect effects of the four higher education characteristics on economic performance. We draw a number of conclusions, including the desirability of subsidies and greater access to higher education, and the non-desirability of the 'Ivory Tower' system. We also find a significant difference in the interaction of higher education characteristics with economic performance across levels of economic development.