Teaching and Research in Higher Education:

The Pope Center has a discussion among four economists on the question of whether teaching and research are substitutes, complements, or independent goods. Perhaps the most interesting entry is James Gwartney's. I hadn't thought of the issue this way before:

In my judgment, yes, there is a problem of balance between research and teaching in American colleges and universities. Most of the problem comes from the fact that government subsidies have undermined market forces.

By and large, the government subsidizes colleges, not students. Federal and state financial support, although based on the enrollment of each student, goes to the university, and the university administration allocates it. If the government actually subsidized students, the payoff from undergraduate teaching would be higher, because students would seek to spend their subsidy dollars at schools emphasizing undergraduate education and not at schools emphasizing research. It would also lead to more of the specialization that Dirk mentions, which makes a lot of sense.

In other words, the current public university system makes it very difficult for students to cast dollar votes for excellence in teaching.

If students go to a private school, they lose most of the government subsidy to higher education. And because of the expanding state support, it is now very difficult for private liberal arts schools to compete. These are the schools that have historically stressed the importance of quality teaching and interaction between students and teachers. I went to one of those schools in the early 1960s and got a good education despite my immaturity and my focus on other things. Today, there are fewer of those colleges, and the ones that still exist find it very difficult to attract faculty from the highly subsidized state schools. As a result, they are not nearly as attractive an option for students as they were 50 years ago.

I do think that research helps one become a better teacher, particularly at the graduate level. But the marginal payoff of research is low for most faculty members. The creative energies of those who are interested in tenure and larger raises are directed toward knocking out more articles, even if few read them. Would this be the case if the government subsidies followed the student and students were free to choose among colleges? I don't think so. Student dollars would go more toward good teaching and less toward esoteric research.