tailieunhanh - THE ROLE OF HIGHER EDUCATION TO ECONOMIC DEVELOPMENT

Raising revenue amid the recent budget crisis State government tax revenues across the country declined dramatically following the Great Recession: between the middle of 2008 and 2009, real tax collections fell 18 percent. Declining revenues and increasing demands on public services combined to create extremely large budget gaps. With a very slow economic recovery, state budget gaps have persisted. The projected gap in Rhode Island is an estimated $117 million for 2013; for all states it is $47 billion. . | 82 VADYBA MANAGEMENT. 2006 m. Nr. 2 11 THE ROLE OF HIGHER EDUCATION TO ECONOMIC DEVELOPMENT Irena Macerinskiene Birute Vaiksnoraite During the second half of the last century the question of educational expansion attracted much attention and the debate revolved mostly around the evaluation of its socio-economic benefits and costs. Nowadays in the context of the European higher education policy the knowledge economy discourse expressed in the EU Lisbon Agenda rendered higher education increasingly important for the development of nation s economies through their central tasks of generation application and dissemination of knowledge and training high skilled labour force. In this paper we have analysed the role of higher education to economic development by highlighting private and societal benefits of university education as well as trying to look at possible negative effects that higher education expansion might have. In addition we made an overview of empirical studies providing us with the evidence from cross-country analyses whether higher education promotes economic growth at macroeconomic level. Most empirical studies show that there exist only weak and elusive connections between education and economic development. Key words economic development higher education private and societal benefits of higher education human capital Introduction Concern about expansion of higher education in Western Europe and North America is not a recent phenomenon. Major changes took place in the 19th century that prepared the way for increased participation Curtis and Boultwood 1966 and with the acceleration of the process since the end of the Second World War higher education has become de facto part of the national system of education in most European countries. Since the 1960s human capital theorists have presented education as one of the most productive means of growth investment. Acquiring a university degree is a form of human capital investment. Nowadays in the context of

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