| 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. |