Impact of science and engineering graduates on key economic indicators

There are clear trends in the USA with regard to a stagnant growth in science and engineering, particularly engineering, and in greater contrast when considered per capita. Meanwhile certain Asian counties, such as China and Taiwan, have experienced growth in science and engineering graduates beyond mere population growth. This has caught the eye of alarmists and so discussions have ensued over offshoring, national security, economic loss and future impact in the United States. Alarmists and proponents of policies promoting more science, engineering and math have pointed out the trends in overseas growth and US offshoring with a flurry of statistics and data. The more conservative or reserved in the discussion believe the numbers reported by China, India and others are either exaggerated or not directly comparable. The work presented herein does not settle that debate but does examine whether a statistical or econometric link exists between graduates in engineering and economic growth, such as GDP or national income. This work also found a relation via elasticity between the number of science and engineering graduates and GDP, as well as a link to patents. The initial modeling focused solely on the USA and showed a statistically significant impact on the economy from science and engineering graduates. Type 1 modeling resulted in an average elasticity of 0.116 and Type 2 an average of 0.264 between GDP and science and engineering graduates. This does seem to be of import for those concerned over relatively stagnant engineering growth that dampens science and engineering growth of graduates over the past couple of decades. A large portion of the many variants in the models that were regressed showed a maximum impact occurred approximately 3.5 years to 4 years after graduation. The panel models were run for all countries available and for OECD, which showed a maximum impact further away from graduation. In the all-countries case, it appears to be centered near year 7. The elasticities of these various models were lower than the USA-Only modeling, where Type 1 models averaged 0.04 and Type 2, 0.06 respectively, for the data set containing all available countries. The statistical evidence was less robust for the all-countries regressions but indicates that the USA is able to get more on average from science and engineering and at a quicker pace than other countries. However, previous studies of individual countries such as that by Lin (2004) showed that Taiwanese science and engineering graduates had a larger impact than the one found herein for the USA. Also, regression analysis done with just Chinese data showed that the maximum impact gained from science and engineering graduates in China was slightly quicker than the USA. As such, it is likely that the lag between impact and the magnitude of that impact varies greatly among countries and the USA results are not at extremes for either magnitude or lag. The results could be seen as an affirmation for the alarmists that wish to use public policy, social influences, media, etc to generate a greater interest in science and engineering among the youth of the nation. However, determining how much interest, how many science and engineering graduates are truly needed and similar assessments would require a study of markets, both domestic and international, and demand for such as unbridled growth in any discipline will reach points of ineffectiveness or even become a detriment. As such, it would have to be combined with strategic planning and initiatives so that science and engineering graduates have a place to produce within industry