The Economics of Scientific Progress
Paper Session
Sunday, Jan. 3, 2027 8:00 AM - 10:00 AM (EST)
- Chair: Gabriel Chodorow-Reich, Harvard University
Retreating from Science: The Long-Run Effects of the 1970s U.S. Military Disinvestment from Research
Abstract
Between 1945 and 1970, the U.S. Department of Defense was one of the country’s largest funders of university research, and the most important in the physical sciences and engineering. During the 1970s, a confluence of political pressures led to this funding being drastically curtailed in scale and scope, declining nearly two-thirds by the mid-1970s and never recovering. We show that these cuts were felt widely across the U.S. research system, with large resultant declines in university scientists, PhD production, and research output. Early career scientists who were DoD-funded in 1970 were more likely than others to leave university employment, with many transitioning to industry. In the aggregate, this appears to have reduced science-based innovation in related technologies and compressed---but not eliminated---U.S. leadership in global science in previously DoD-driven fields. Ongoing analysis evaluates how these changes affected the scientific workforce underpinning the U.S. defense industrial base.Health Care Funding Productivity
Abstract
We estimate productivity of private and public research funding.Scientific Openness and the Geography of University Spillovers
Abstract
Public investment in science is traditionally justified through broad social returns from open knowledge production. Yet policymakers also care where those returns accrue, especially amid concerns about foreign free riding and national security. We examine this tension using novel data for ten U.S. research universities linking academic outputs to downstream scientific use and commercial outcomes, including patent licensees and startups, with geographic information on users. Tracking the same ideas across paper-to-paper, paper-to-patent, patent-to-licensee, and patent-to-startup spillovers, we compare their spatial reach. Spillovers become increasingly local as ideas approach commercialization: science-to-science spillovers are relatively global, while market-oriented spillovers are disproportionately captured within the United States and the university’s state. The results suggest that open science simultaneously generates broad knowledge diffusion while producing concentrated local economic returns through commercialization channels.JEL Classifications
- O3 - Innovation; Research and Development; Technological Change; Intellectual Property Rights
- O4 - Economic Growth and Aggregate Productivity