This paper uses institutionally based data to estimate how universities would respond to increased federal support for graduate students. It demonstrates that doctorate-producing universities do respond to changes in the number of full-time science and engineering students supported on external funds by altering the number of students that they support on institutional funds. Institutional adjustment to changes in external support levels appears to be quite rapid. However, in the aggregate, the magnitude of these responses is quite small.
Originally published in: The Review of Economics and Statistics, v. 75, no. 4, Nov. 1993, pp. 671-682.
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