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Should the Government Subsidize Supply or Demand in the Market for Scientists and Engineers?

May 2000
Working Paper
99-020
By  Paul Romer
This paper suggests that innovation policy in the United States has erred by subsidizing the private sector demand for scientists and engineers without asking whether the educational system provides the supply response necessary for these subsidies to work. It suggests that the existing institutional arrangements in higher education limit this supply response. To illustrate the path not taken, the paper considers specific programs that could increase the number of scientists and engineers available to the private sector.