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FEDERAL EXPENDITURES AND ECONOMIC GROWTH
CONTRIBUTION OF FED ER A L E X P E N D IT U R E S TO
ECONOMIC GROW TH AND S T A B IL IT Y 1
Evsey D. Domar, professor of political economy, the Johns Hopkins
University
I
n t r o d u c t io n
I t is, I believe, a sign of progress that in the past few years we have
become increasingly concerned with economic stability and particu
larly with growth, rather than merely with full employment. ( I t is
interesting to note that the Employment Act of 1946 does not mention
the word “growth.” The nearest it comes to it is in the expression
“maximum production.” ) As goals of economic policy, full employ
ment, and growth are not incompatible, but neither are they identical.
An economy like ours growing at a sufficiently rapid rate (with the
usual qualifications regarding health, leisure, and so forth) will enjoy
full employment without worrying about it, but full employment may
or may not be used efficiently and will not necessarily result in growth.
Growth, with its emphasis on efficiency, good management, techno
logical progress, and, may I add, hard work and thrift, fits much better
with our general attitudes and is the healthier objective of the two.
That growth as such is desirable seems to me obvious. W ith the
present international conflict it is also a condition of survival.
I shall mean by growth the rate of increase of the total output of
goods and services, measured by real national income or product (gross
or net) or some similar series. To achieve a growing national income
two basic conditions must be satisfied: (1) There must be a growing
demand for goods and services which the economy can produce; and
(2) there must also be a growth of productive capacity. These two
conditions are closely interrelated. The first without the second will
initially result in full employment, but eventually—in inflation. The
second without the first—in unemployment and idle capacity which
will undoubtedly inhibit the growth of capacity itself. While eco
nomic stability is essentially concerned with the first condition, or
more correctly with the adjustment of demand to a given level of
capacity, and growth—with the second, it wTould be difficult, in an
economy like ours, to achieve either without the other.
Before proceeding further let me make clear that this paper is solely
concerned with Federal expenditures, and even with only certain kinds
of expenditures, not because I imagine that the change in the volume,
11
am grateful to Donald Bear of Stanford U niversity and to Vladimir Stolkov of the
Johns H opkins U niversity for their help in gathering sta tistica l m aterials for th is paper.
They are not responsible, however, for any of my conclusions and recommendations.
267
268
ECONOMIC GROWTH AND STABIL/ITY
timing, and composition of Federal expenditures is the only, or even
the most important, key to the problem in hand, but simply because
it is the subject of the present hearings. While the committee has
been considering one aspect of Federal policies in its bearing on growth
and stability at a time, we may hope that it will synthesize its findings
someday.
E
conom ic
S ta b il it y
The first aspect of our problem, the adjustment of demand to pro
ductive capacity a t a given point of time—th a t is, economic stabiliza
tion—is a field where it is easy to advise and difficult to act. Eco
nomic discussions of the last two decades have repeatedly emphasized
that Federal expenditures should be curtailed during an inflation and
expanded during a depression, thus preventing the development of
either. This is good advice, so far as it goes. A mild inflation is
not catastrophic and is unlikely to injure growth, but it is hard to
keep an inflation mild. There is also another reason for curtailing
Federal expenditures in prosperous and inflationary times. When
productive capacity is fully utilized, any increase in Federal (or any
other) expenditures must be matched by a more or less equal reduc
tion elsewhere, achieved by taxation or inflation, and is, therefore,
costly. D uring a depression, however, when labor and machinery
are not fully utilized, an increase in Federal expenditures need not
and should not be matched by a corresponding reduction elsewhere
because labor, machinery, and materials do not have to be taken off
other jobs. More than that. The additional stream of Federal (or
other) expenditures will, in turn, give rise to secondary and subse
quent streams and thus increase national income by an amount greater
than the original expenditure (the so-called m ultiplier effect).
While our economy is seldom, if ever, in one of the extreme positions
described here, and while there is quite a difference between the sim
plicity of a textbook demonstration and reality, the essence of the
argument holds. The trouble is not with the argument itself, but
with its practical implementation. I f the early arrival of a depres
sion could be foreseen, some Federal expenditures, such as those on
highwaySj could be postponed. B ut the slack in non-Federal expendi
tures (private, State, and local) m ight not take place fo r years to
come. How long are we to wait? O f course, if a depression does
come, Federal expenditures should be increased. This is also not
easy to do on short notice if the expenditures are to be socially useful,
yet less difficult, it seems to me, than their postponement.
I find it most fortunate th at the stabilization problem will be con
sidered by a special panel, whose members, I trust, will be more in
genious in devising practical suggestions than I am. (The decision
to consider Federal expenditures in isolation from other measures,
such as taxation, is very restrictive in this connection.) Let me
make the optimistic assumption that this problem has been solved in
the sense that demand for goods and services will grow at an appro
priate rate and proceed to the problem of growth of productive
capacity.
T h e G row th
of
P roductive C a pa c ity
The growth of productive capacity is a most complex phenomenon,
and any attempt to classify its ingredients in a simple (or perhaps
ECONOMIC GROWTH AND STABILITY
269
any other) fashion is unsatisfactory. No particular significance
should be attached to the following list. I t is merely used as a point
of departure.
An increase in productive capacity depends on the following fac
tors:
1. An increase in the labor force (more correctly, man-hours
available).
2. An improvement in the health, education, and training of the
labor force.
3. Development of knowledge, including technical knowledge, and
its application.
4. Improved management and administration.
5. Accumulation of capital, and improvement in its quality.
6. More efficient utilization and discovery of new resources.
7. Changes in other economic factors, such as composition of out
put, industrial structure, competition, etc.
8. Changes in more general factors, such as attitudes toward work,
efforts, invention, thrift, risk, and many others which are very im
portant, perhaps more important than the strictly economic ones, but
which I am hardly competent to discuss. I t is not easy to change
them by Federal expenditures, in any case.
There is no simple formula that could tell us which of these com
ponents of growth should be the particular concern of our Federal or
of any national government. No two countries, nor any one country
at different periods of time, would give the same answer. In this
particular case, it seems best to me to follow ;mr traditions and to
modify them when reasons for a change are stro.ig.
Let us start with capital formation. Whether we could profitably
invest a larger fraction of our national income (or product) is a con
troversial subject among economists. Much, of course, depends on
the concomitant growth of the labor force and on technological
progress. W ithout these two, and particularly the latter, the output
contributed by an extra dollar of capital will decline with time. I
doubt if this has been the case in this country, and I believe that we
could invest a higher fraction of our income, provided anti-inflation
ary measures were undertaken at the same time. From this it does
not follow, however, that the Federal Government should participate
in capital formation on a large scale, except in such fields as highways,
where benefits are diffused; atomic energy, where returns are still
uncertain; defense installations, which serve a special purpose; and
other special fields. The bulk of our capital formation can be left in
private hands, stimulated, if necessary, by tax, credit, and other
policies. This has been our tradition, and I do not see good reasons
for changing it at the present time.
Similarly, there is no need for Federal (or any governmental) inter
ference with the growth of our labor force; that is, essentially with
the birthrate—we are doing quite well here on our own—nor with the
length of the workweek. I do not see that the Federal Government
could or should try to change our managerial or administrative meth
ods, except, perhaps, in its own backyard. The Federal Government
does concern itself with questions of competition and monopoly, but
this is hardly a field for Federal expenditures, as distinguished from
other Federal actions, except, possibly, in the allocation of Govern<1 7 7 3 5 — 5 7 --------- 1 !)
270
ECONOMIC GROWTH AND STABILITY
ment contracts. W ith these exclusions, the fields where Federal ex
penditures can and should contribute to growth a re :
1. Education and training.
2. Development of knowledge; i. e., research.
3. Public health.
,,
4. Natural resources.
All these fields are important and deserve Federal attention, but
I shall limit my remarks to the first 2, and particularly to educa
tion, both because of my ignorance of the last 2 and because our
education and research suffer from serious deficiencies.
F ederal E x pe n d it u r e s
and
E d u c a tio n
The committee is undoubtedly fam iliar with the shortage of quali
fied teachers, the overcrowding, and the frequently unsatisfactory
level of instruction in our public schools. I would like to discuss
here another aspect of our educational system: the waste of ability
and talent caused by the failure of a surprisingly large number of
bright high-school graduates to attend college.
In an advanced industrial society like ours, positions of importance
and responsibility in practically every field increasingly require a
college education and, frequently, postgraduate training as well.
When an able person who can benefit from such an education does
not receive it, he hurts both himself and society. I t is not always
easy to identify good college material, but a high score on an intelli
gence test combined with a high performance in high school gives a
strong promise of success. Yet, according to table I, taken from a
study of the Commission on Human Resources and Advanced Training
published in 1954, 38 percent of high-school graduates in the upper
20 percent of their graduating class and with an intelligence score of
145 or over (which is very high, indeed) do not even enter college.2
F o r that matter, even a score of 125 is quite high—the average for
college graduates is 1213—yet, as table I shows, over 40 percent of
this group, who are also in the upper 20 percent of the graduating class,
do not go to college. In the words of Dael Wolfie, the Director of the
Commission:
:
Every year, over 150,000 pupils who could become average
or better members of most of the specialized fields graduate
from high school but do not enter college. Some of these able
students will attain positions of high responsibility; they will ,,.,
contribute as much to society and derive as much personal
satisfaction from their work as they would had they attended ,,,
college. B ut many will not. W ithout college education, .,!
they have little or no opportunity to become teachers, scien
tists, doctors, lawyers, or social scientists. They may become
businessmen, musicians, artists, journalists, or nurses, and
some of them can become engineers while others can work in
a variety of subprofessional fields. But, as a group, they can2 Dael Wolfle, America’s Resources of Specialized T a le n t; the Report of the Commission
on Human Resources and Advanced Training (New York, Harper & Bros., 1954), p. 174.
T his Commission w as appointed by the Conference Board of Associated Research Councils
under a grant from the Rockefeller Foundation.
.
» Ibid., p. 146.
I
271
ECONOMIC GROWTH AND STABILITY
not contribute to society as much without additional education
as they could with it.4
T a b l e I . — Percentage of high school graduates who do not enter college, classified
by intelligence and high school grades 1
A G C T score
135 to 144_____________ ______
125 to 134......... ..............................
115 to 124.............. ........................
105 to 114____________________
95 to 104...........................................
85 to 94______________________
75 to 84 ................... ..................... .
Below 75............. ............. . . . . ..
T o tal__________________
Percent
of all
highschool
gradu
ates
2.1
5.4
12.0
19.2
22.8
19.2
12.0
5.4
2. 1
High-school grades (percentile ran k in graduating class)
1-20
21-40
41-00
I
i
| 61-80
81-100 j Total
52 i
84
88
92
59
03
07
70
72
74
77
81
84
j
i
I
i
■
,
‘
44
50
53
50
58
01
64
67
70
38
43
46
49
52
54
57
60
66
83
74
05 !
56
47 |
70
74
70
79
bi
60
03
65
08
70
74
77
i
j
!
:
;
,
1
:
40
46
52
58
65
71
78
84
91
65
'■ Ibid., p. 174.
The Commission concluded that—
The United States wastes much of its talent. College
graduating classes could be twice as large as they currently
are, and with no loss of quality. The potential supply gets
drained off, in large or small amounts, all the way through
the educational system. Practically all potentially good col
lege students enter, and most of them finish high school, but
after high school the loss is large. Fewer than half of the
upper 25 percent of all high-school graduates ever earn col
lege degrees; only 6 out of 10 of the top 5 percent do. So
ciety fails to secure the full benefit of many of its brightest
youth because they do not secure the education that would
enable them to work at the levels for which they are poten
tially qualified.5
I t is proper to inquire at this point whether the influx of all these
bright young men and women into colleges would create an over
supply of college-trained personnel. Their admission to college need
not necessarily give rise to a sharp increase in the fraction of our pop
ulation going to college, unless this is regarded as desirable in itself.
Every college teacher is aware that a distressingly large fraction of
our present undergraduates are poor college material. Hence, a good
deal of substitution of these poor students by better ones, rather than
a net addition to them, could take place. Secondly, a rapidly grow
ing economy needs talent and ability; in turn, a better utilization of
these rare qualities promotes growth.
‘ Ibid., p. 242.
• Ibid., p. 269.
Sim ilar evidence w as obtained by another study which tried to find the relation between
the intelligence level and occupation. It was found that on the whole people of high
intelligence are concentrated in the professional, managerial, and clerical occupations;
persons of low in telligence do not usually rise to the top, but a large percentage of highly
intelligent persons (w ith scores of 140-149) are found among skilled manual, semiskilled
and even unskilled groups. See C. A. Anderson, J. C. Brown, and M. J. Bowman, In tel
ligence and Occupational Mobility, The Journal of P olitical Economy, vol. LX (June
1952), pp. 218-239. Their conclusion w as t M t “Elim ination of the less in telligen t men
from the topm ost level appears more certain than the rise of brilliant men from low posi
tions to high ones”, p. 221.
272
ECONOMIC GROWTH AND STABILITY
These 40 or so percent of potentially excellent students do not go
to college for two sets of reasons: one is financial, the other—more
general. A study made by Ralph F. Berdie in Minnesota reveals that
only one-half of the upper 10 percent of high-school graduates who
did not intend to go to college said that they would go if funds were
available.6 The other half would not go because of lack of motiva
tion, interest, or other reasons.
A system of Federal scholarships for college and post-graduate
training would help those who do not go to college because of lack
of funds, but no miracles should be expected from it. A large num
ber, perhaps as many as two-thirds of potential recipients would go
to college in any case, though some of them would be enabled to enter
better schools and some parents would be relieved from a heavy bur
den. W hat worries me about a system of Federal scholarships, how
ever, is their probable restriction to some specific fields, such as sci
ences and engineering where a shortage of trained personnel seems to
exist. We certainly need able and well trained scientists and engi
neers, but we also need able doctors, lawyers, businessmen, teachers,
and even economists. We should increase our supply of scientists and
engineers by drawing into college those bright men and women who
stay out of them, rather than by denuding other professions and oc
cupations of their best personnel. The choice of study should be left
to the individual, aided by advice from his relatives and teachers and
not hampered by the promise of a scholarship in one field and its
absence in another.
federal scholarships could help solve but one aspect of the problem.
They would not improve education in our schools, the need for which
is great. To quote again from the Commission’s rep o rt:
Of these possible courses of action, probably the most im
portant in the long run is to improve education at the ele
mentary and secondary levels. In the intermediate run, early
identification of talent plus efforts to improve motivation on
the part of both the pupil and his parents appears to be the
most promising direction of effort. And in the short run,
intensive indoctrination plus financial assistance will have the
earliest payoff.7
;
Such an improvement in our educational system will hardly be
accomplished without Federal help. But before I press this point
further, let us take a look at a few facts.
Taken as a fraction of total'population, enrollment in all our schools
and universities, taken together, has not changed much since 1930. In
elementary and secondary schools this fraction was 23.2 percent in
1930 and 21.7 percent in 1956 (see appendix, tables A I I I - A V ) : in
universities the corresponding figures were 0.9 percent and 1.8 percent,
and total enrollment on all levels was 24.1 percent in 1930 and 23.4
percent in 1956. The proportion of young people enrolled has been
increasing, but the fraction of young people (ages 5-24) in the total
population fell from 38.3 percent in 1930 to 31.7 percent in 1956.
"With the higher birth rates since World W ar I I , the fraction of total
population enrolled is beginning to rise.
. •’ Ralph F. Berdie, After Hi^h School. W hat? {M inneapolis, Minn., U niversity o f Min
n eso ta Press, 195 3 ). The reference is taken from Wolfle, op. cit., p. 165.
1 AVolfle, op. eit., p. 244.
..
.
ECONOMIC GROWTH AND STABILITY
273
The fraction of our gross national product spent on education from
all sources (Federal, State, local, and private) has risen from 3.49 per
cent in 1930 to 3.87 percent in 1954, after a slight dip in 1940 and
1950 to 3.16 and 3.07 percent, respectively. (See appendix, table
AVI.) Expenditures on elementary and secondary education as frac
tions of gross national product have behaved in roughly the same man
ner, while expenditures on higher education have risen faster (from
0.69 percent in 1930 to 0.95 percent in 1954).
Thus neither the fraction of our population enrolled in school nor
that of gross national product devoted to education has shown a
marked change. Rough as these comparisons are, they leave one some
what puzzled regarding the causes of our increasingly acute educa
tional problem. Parr of the latter can be explained by a rise in what
is regarded as good education, but by far more important is the pe
culiar character of education: I t is an industry deriving little benefit
from technological progress, so that real productivity per person
(teacher) engaged has not increased much, if at all, over the centuries.
True, our teachers know more (I trust) than their ancestors, but the
essential method of instruction has not changed considerably since the
days of Socrates: A teacher working directly with a class of students
without much help from mechanical devices was then and still is the
typical method. An attempt to raise the teacher’s productivity by in
creasing the size of class simply reduces the quality of instruction.
I t is most ironical that while education contributes so much to eco
nomic growth—perhaps more than any other activity—it suffers from
the success of its own efforts. In industries subject to particularly
rapid technological progress productivity per worker rises and his
income can be and is raised without difficulty. This brings pressure
on less progressive industries. To keep their workers they also have
to raise wages or reduce the quality of their personnel. Their output
becomes more expensive and/or of lower quality. This is exactly
wrhat has been happening to education.
This is not a temporary situation. The more prosperous we be
come and the faster we grow the more expensive good education will
become, unless some major technological revolution, such as mass use
of television as an instrument of instruction, transforms the education
industry. I t is too early to tell whether such a change will be possible
or desirable. As things stand, it is very unlikely that this country will
have an educational system such as it deserves and badly needs and can
certainly afford without Federal participation on a large scale.
Traditionally, education, particularly on the elementary and sec
ondary level, has been regarded as a local affair. Although part of
this tradition has already been broken by State educational grants to
local governments, which are quite common, further departures from
this or any other tradition require justification.
In ages past when a person was likely to be born, live, and die in
the same community (if such times ever existed in this country) which
was economically more or less self-sufficient, it was natural to think of
education, particularly on the elementary and secondary level, in local
terms. Whatever might have been the case in the past, the geographi
cal mobility of our present population is remarkable: between 1953 and
1956 over 10 million persons per year changed their county of residence.
(See appendix, table A -V II.) Subject to annual variation, the gen
274
ECONOMIC GROWTH AND STABILITY
eral trend has been from the Northeast and South toward the West.
Must the South—our poorest region—provide education for the more
prosperous W est ?
T hat the economic interdependence of all regions of this country is
very great requires no elaboration. A waste of ability and talent in
any one region affects all the rest. The education and training of our
highly mobile labor force is therefore a national problem.
One may still wonder whether a proper educational system could
not be financed by local governments, with State support, particularly
in periods of high prosperity and full employment. W hether a large
increase of educational expenditures from these sources can be under
taken is a moot question. Financial ability is hard to judge. On the
whole, our poorer States, which usually also have poorer schools, are
making at least as great or even a greater educational effort than the
richer ones. Thus in 1954 Mississippi spent 3.06 percent of her per
sonal income on education; Arkansas and South Carolina 2.78 and 3.37
percent, respectively, as compared with 2.08 percent for New York,
1.80 and 2.01 percent for Connecticut and New Jersey. (The highest
ratios were in the W est: in New Mexico, 3.56; Wyoming, 3.44; and
Idaho, 3.39 percent.) (See appendix, table A -IX .) T hat the State
and local governments find it much more difficult to raise funds than
the Federal Government does is well known. The fear of repelling
customers in case of a sales tax, and wealthy individuals in case of an
income tax, is an important factor. Perhaps the unwillingness to tax
is as strong as inability. Be all this as it may, the fact remains that
State and local governments have not met the problem. Nor is a radi
cal improvement to be expected in the near future.
The emphasis placed in this paper on the waste of talent and ability
caused by the failure of potentially bright college students to enroll
should not give the impression that this is the only educational problem
we face. Other problems will, I presume, be discussed by the special
panel. Perhaps I may add here that it is highly desirable to raise the
general level of our college instruction. Our education is becoming
ever longer because so little is accomplished in 4 years of undergrad
uate training; a master’s degree and even a doctorate are increasingly
required. F or that matter, postdoctoral training is becoming more
common. B ut such a reform of college education cannot be under
taken without a major improvement in our elementary and, particu
larly, high-school instruction.
F ederal E
x pe n d it u r e s a n d
R esearc h
Expenditures on research and development from all sources (gov
ernmental, commercial, and nonprofit) have increased markedly over
recent years, rising from some $0.8 billion in 1941 to $4.6 billion in
1953, or as a fraction of gross national product from 0.6 to 1.3 percent.
Between 1941 and 1957 Federal expenditures on research and develop
ment rose from $0.2 billion to $2.6 billion, though as a fraction of
gross national product the latter figure corresponds to only some 0.6
percent. (See appendix, table A -X .) And of course the absolute
figures should be corrected for changes in the price level.
T hat economic growth is based on technological progress and re
search in general is clear beyond doubt. I t is tempting, therefore,
ECONOMIC GROWTH AND STABILITY
275
to argue that Federal expenditures on research should increase. I
take this position, but with the following qualifications: _
1. The social usefulness of research expenditures is limited by the
supply of well-trained research workers, which in turn depends on
our educational system. I f the Federal Government increases its de
mand for them without helping to increase the supply, research
workers will be simply shifted from non-Federal to Federal projects.
In the short run this will accomplish certain specific objectives, par
ticularly connected with national defense. Its long-run effects may
be less desirable.
2. By far the largest part of Federal research expenditures—84
percent in 1956—is related to national security. (See appendix, table
A -X I.) While some of the results of these expenditures will find
peacetime uses, I cannot help wondering whether it is healthy in the
long run that only 16 percent of them are directed to nondefense
purposes.
3. Even more important is the estimate that over 90 percent of
Federal research obligations are for applied research. (See appendix,
table A -X II.) Granted that the distinction between basic and ap
plied research is vague and that the estimate is not precise, it still
remains true that the Federal Government is little concerned with
basic research. I t may even be impeding it by encouraging scientists
to leave basic research where material gains, if any, are small and
move to applied projects which can be easily financed. And yet basic
research is the foundation on which all other research is built; its
benefits are widely diffused and accrue to the whole society rather
than to its direct sponsors and originators. I t is difficult to find a
field more worthy of Federal support.
A p p e n d ix
This statement was made by Alfred Marshall, the great English
economist, near the turn of the century. While there is a vast differ
ence between the present American conditions and those in the England
of his time, his statement is still of interest.
The laws which govern the birth of genius are inscrutable.
I t is probable that the percentage of children of the working
classes who are endowed with natural abilities of the highest
order is not so great as th at of the children of people who
have attained or have inherited a higher position in society.
But since the manual labor classes are 4 or 5 times as numer
ous as all other classes put together, it is not unlikely that
more than half of the best natural genius that is born into the
country belongs to them ; and of this a great part is fruitless
from want of opportunity. There is no extravagance more
prejudicial to the growth of national wealth than that waste
ful negligence which allows genius that happens to be born
of lowly parentage to expend itself in lowly work. No change
would conduce so much to a rapid increase of material wealth
as an improvement in our schools, and especially those of the
middle grades, provided it be combined with an extensive
system of scholarships, which will enable the clever son of a
workingman to rise gradually from school to school till he
276
ECONOMIC GROWTH AND STABILITY
has the best theoretical and practical education which the
age can give.
To the abilities of children of the wroking classes may be
ascribed the greater p art of the success of the free towns in
the Middle Ages and of Scotland in recent times. Even
within England itself there is a lesson of the same kind to be
learned; progress is most rapid in those parts of the country
in which the greatest proportion of the leaders of industry
are the sons of workingmen. F or instance, the beginning of
the manufacturing era found social distinctions more closely
marked and more firmly established in the south than in the
north of England. In the south something of a spirit of caste
has held back the workingmen and the sons of workingmen
from rising to posts of command; and the old established
families have been wanting in th at elasticity and freshness of
mind which no social advantages can supply, and which comes
only from natural gifts. Tins spirit of caste, and this de
ficiency of new blood among the leaders of industry, have
mutually sustained one another; and there are not a few
towns in the south of England whose decadence within living
memory can be traced in a great measure to this cause.8
T a b le
A-I. — Estimated distribution of college graduates classified by occupation
of father
Father’s occupation
Skilled, unskilled, factory, etc...................... ...
Percentage
Distribution of each group
of 1,000
graduating
children
from college
65
128
158
162
487
1, 000
43
19
15
6
8
Number and percentage
among college graduates
Number
Percent
28
24
24
10
39
22
19
8
31
125
100
19
Source: The distribution of children was taken from Bureau of the Census report p. 20, No. 32, Dec. 4,
1950, Children and Youth: 1950, which gives the distribution of children under the age of 18 by occupation
of the employed head of the nousehold. The other figures are quite tentative Commission estimates.
Dael Wolfle, America’s Resources of Specialized Talent, p. 162.
T a b le
A -II .—-Estimated educational attainment of boys and girls with AGCT
scores of ISO or higher 1
Both sexes
Annual
number
152.000
148.000
80,000
70,000
2, 600
Percent
100.0
97.0
53.0
46.0
1.7
1All numbers are rounded, and are based upon an age group of 2,200,000 approximately the current size;
percentage figures are of all (boys and girls, or both) in age firoup and with AGCT scores of 130 or higher.
Source: Commission estimates.
Dael Wolfie, America’s Resources of Specialized Talent, p. 183.
8 A lfred M a rsh all, P rin c ip les of E conom ics (London, M acm illan & Co., 1890), 1 st edition,
pp. 270-271.
277
ECONOMIC GROWTH AND STABILITY
Table A -III.—Population, labor force , and school enrollment
Year
Total con
tinental
population,
including
Armed
Forces
Labor force
(including
military)
Total en
rollment
in schools
(all levels)
Enrollment
in elemen
tary and
secondary
education
Enrollment
in higher
education
0)
(2)
(3)
(4)
(5)
(6)
1890............................................
1900_______ _________________
1910............................................. .
1920......... . ....................................
1930_._____ ________________
1940.......................... -...... ........ .
1950________________________
1952....................... ........................
1954................................... .............
1955............... ............................
1956___ ________________ ___ _
62, 947, 714
76, 085, 794
92,027,874
105,827,858
122,864, 499
131, 788, 208
151, 683, 000
157, 028, 000
162, 409, 000
165, 248, 000
167,181, 000
i 13, 980, 756
17,198, 841
19,999,148
24,061, 778
29,652,377
29,751,203
31,319,271
32,856,348
35,911,050
137,811,547
1 39,181, 765
1 13,824,000
21,814,412
27,323, 055
35,749,068
41,016,851
50,080,000
56,030,000
64, 599, 000
66,426,000
67,818, 000
69, 538, 000
69, 885,000
As percent of population
Year
(7)
1890...____ ______
1900.............. .............
1910...........................
1920................... ........
1930______________
1940......... ........ ........1950...... ....................
1952______________
1954______________
1956...........................
As percent of labor force
Total
enroll
ment as
percent
of popu
lation
(4-4-2)
Elemen
tary and
second
ary en
rollment
as percent
of popu
lation
(54-2)
Enroll
ment in
higher
educa
tion as
percent
of popu
lation
(6*5-2)
Total
enroll
ment as
percent
of labor
force
(4-5-3)
(8)
(9)
(10)
(ID
(12)
22. 21
22. 60
21.73
22. 74
24.13
22. 58
20. 65
20. 92
22.11
22. 88
23. 44
21.96
22. 29
21.35
22.17
23. 24
21.44
18. 89
19. 46
20. 56
21.24
21.67
64. 09
62. 95
55.94
58. 66
59. 21
53.10
48. 48
49. 46
52. 95
54.38
56.09
63. 37
62. 08
54.95
57. 21
57.01
50. 43
44. 37
46. 00
49. 24
50. 46
51. 87
0. 25
.31
.39
.56
.90
1.13
1.75
1.47
1. 55
1.65
1.76
16,961,249
19,643,933
23,463,898
28,551,640
28, 257,000
28,660,250
30, 554,464
33,396,338
1 35,090,618
1 36, 234, 780
As percent of total
enrollment
Enroll Elemen
Elemen ment in tary and
tary and higher
second
second
educa
ary en
ary as
tion as rollment
percent percent as percent
of labor of labor of total
force
force
enroll
(5-5-3)
ment
(6-5-3)
(5-4)
(13)
0.72
.87
.99
1.46
2.20
2. 67
4.12
3. 47
3.71
3.91
4. 22
156, 756
237,592
355. 215
597,880
1,100,737
1,494,203
2,659,021
2,301, 884
2,514,712
2,720,929
2,946,985
(14)
98. 88
98.62
98. 22
97. 52
96.29
94. 98
91.51
92.99
93.00
92. 80
92. 48
Enroll
ment in
higher
educa
tion as
percent of
total enrollmet
(6-4-4)
(15-)
l.U
1.38
1.78
2.48
3.71
5.02
8.49
7. 01
7.00
7. 20
7. 52
5 Denotes estimation on basis of subsequent (or preceding) proportions of private enrollment to total
enrollment in elementary and secondary schools. Consequently, the total enrollment in elementary and
secondary schools (and in ull levels) is, in part, an estimation. '
Sources for T able A -III
Col. 2:1890 figure from Stat. Abst. 1956, p. 5, table No. 1; figures for 1900-1940 computed from Hist. Stat.,
p. 25, series B, 2, and 3; figures for 1950-5(5 from Stat. Abst., p. 5, table No. 2 (1956 figure is for December).
Col. 3: Figures for 1890-1930 are based on “ gainful worker” concept. From 1940 on the labor force con
cept is used. Difference is mainly that former excluded new workers not yet employed for 1st time,
whereas latter includes them. Figures for 1890-1920 from Hist. Stat., p. 64, series D, 32, and cover gainfully
occupied as of age 16 and over. Figures for 1930-55 from Stat. Abst. 1956, p. 197, table No. 235 and include
those gainfully occupied or in labor force (whichever is appropriate) of age 14 and over. Figure for 1956
(December) comes from Monthly Labor Review, April 1957, p. 506, table A-l.
Cols. 4, 5, and 6: Figure for 1890 enrollment in elementary and secondary schools is estimated on basis of
1890 enrollment of 12,723,000 in public elementary and secondary schools (Biennial Survey of Education,
1950-52, ch. I, p. 18, table Mo. 11) and distribution between public and private enrollment in elementary and
secondary schools in 1900 (ibid., ch. I, p. 7, table No. 4). Figure for 1890 enrollment in higher education
from Biennial Survey, 1950-52, ch. I. p. 41, table No. 34. Figures for 1900-1952 from Biennial Survey,
1950-54, oil. I, p. 7, table No. 4. Figures for 1954 from Biennial Survey, 1952-54, ch. I, p. 7, table No. 4.
Figures for 1955 and 1956 enrollment in elementary and secondary schools are estimated on basis of 1955
and 1956 enrollment in public elementary and secondary schools (30,532,166 in 1955 and 31,527,695 in 1956)
(Office of Education, supplement to circular No. 490, p. 1, table No. 1) and on basis of 1954 enrollment in
private elementary and secondary schools (Biennial Survey, 1952-54, p. 7, table No. 4) as a proportion of
total enrollment. Figures for 1955 and 1956 enrollment in higher education from Oflice of Education,
Circular Series, No. 400 (p. 7) and No. 496 (p. 2).
278
ECONOMIC GROWTH AND STABILITY
T able
A-IV.— Total population and school-age population
Population
Total conti
of ages 5 to
nental United
States popu Population Population Population 24 as per
lation (in ages 5 to 24 ages 5 to 17 ages 18 to 24 cent of total
cluding
population
Armed
(3-2)
Forces)
Year
(1)
(2)
(3)
(4)
(5)
1900...................
1910......... -........
1920_..............
1930............. .
1940____ _____
1950___ _____
1955___ _____
76,085,794
92,027,874
105,827,858
122,864,499
131,788,208
151.683.000
165.248.000
31,845,462
36,988,359
40,746,789
47,034,979
46,351,915
46, 519,445
52,440,000
21.538.024
24,239,948
27,728,788
31,571,322
29,745,246
30.735.025
37,334,000
10,307,438
12,748,411
13,018,001
15,463,657
16,606,669
15,784,420
15,106,000
Population
of ages 5 to[
17 as per-t
cent of total
population
(4-2)
Population
ofages 17 to
24 as per
cent oftotal
population
(5-2)
(7)
(8)
(6)
41.85
40.19
38.50
38.28
35.17
30.67
31.73
28.31
26.34
26.20
25.70
22.57
20. 26
22.59
13.55
13.85
12.30
12. 59
12.60
10.41
9.14
Col. 2: Figures for 1900-1950 from table A -III, col. 2.
Col. 3: Figures for 1900-1950 computed from 1950 Census, Special Report P -B l, p. 93, table No. 39. Fig'
ure for 1955 computed from Current Population Reports, Series P-25, No. 121, p. 1.
Col 4: Figure for 1900 computed from 1900 Census of Population, vol. II, pt. II, p. xxxvi, table X IV .
Figure for 1910-50 computed from 1950 Census, Special Report P -B l, p. 95, table No. 43. Figure for 1955
computed from Current Population Reports, Series P-25, No. 121, p. 1.
Col. 5: Figure for 1900 computed from 1900 Census of Population vol. II, pt. II, p. xxxvi, table XVI.
Figures for 1910-50 computed from 1950 Census, Special Report P -B l, p. 95, table No. 43. Figure for 1955
from Current Population Reports, Series P-25, No. 121, p. 1.
Cols. 6, 7, Mid 8: Computed from cols. 3 and 2, cols, 4 and 2, and cols. 5 and 2, respectively.
T able
A-V.— School-age population and educational enrollment
Year
Population
of ages 5
to 24
Total enroll
ment in
education
Population
of ages 5
to 17
Total enroll
ment in ele
mentary and
secondary
schools
Population
of ages 18
to 24
Total en
rollment
in higher
education
(1)
(2)
(3)
(4)
(5)
(6)
(7)
1900...........................
1910...........................
1920...........................
1930...........................
1940______ _______
1950.......................
1955......... .............. .
31, 845, 462
36,988,359
40,746,789
47, 034,979
46,351,915
46, 519,445
52, 440,000
17,198,841
19, 999,148
24, 061, 778
29, 652, 377
29, 751, 203
31,319,271
i 37,811,547
21, 538,024
24,239,948
27,728, 788
31,571,322
29, 745, 246
30, 735,025
37,334,000
Year
(1)
1900................................................... .............................................
1910................. ........................................... ....................................
1920.....................- ..................................... ....................................
1930.......... .................................................. ....................................
1940....................... - ........... .......................... ..................... ..........
1950............... ..................................................... ...........................
1955____________________ ____— ........ .................................
16,961, 249
19,643,933
23,463,898
28, 551, 640
28, 257, 000
28, 660, 250
»35,090,618
10,307, 438
12, 748,411
13,018, 001
15.463, 657
16, 606, 669
15, 784, 420
15,106,000
237, 592
355, 215
597,880
1,100, 737
1,494, 203
2, 659,021
2,720,929
Total enroll Total enroll
Total enroll
m ent in
m ent in
m ent in
elementary
higher edu
education
cation as
and second
as percent of ary schools
percent of
population as percent of population
population
of ages
of ages
5 to 24
of ages
18 to 24
(3-2)
5 to 17
(7-6)
(5-4)
(8)
54.01
54.07
59.05
63.04
64.19
67.33
72.10
(9)
78. 75
81.04
84.62
90.44
95.00
93.25
93.99
(10)
2.31
2.79
4.59
7.12
9.00
16.85
18.01
i Denotes estimation. (See table A-III.)
Cols. 2, 4, and 6: See table A-IV, cols. 2, 3, and 4.
Cols. 3, 5, and 7: See table A -III, cols. 4, 5, and 6.
N o t e .— The enrollment data include total enrollment in the particular level of education under con
sideration and consequently are not limited solely to enrollments from the age group with which it is com
pared. Enrollments by age group do not exist for some years- hence, it seems better to retain a consistent
measure for enrollment figures.
279
ECONOMIC GROWTH AND STABILITY
T able
A-V I .— Gross national product and educational expenditure
[All figures in thousands of dollars]
Year
Gross
national
product
(Depart
ment of
Commerce)
Gross
national
product
(Painter)
U)
(2)
(3)
1900. . .
1910.......
1920____
1930
1940
1950. .
1952____
1954...
1955____
1956.......
91,105,000
100,618,000
285.067.000
346.095.000
360.500.000
391.700.000
414.700.000
Year
Total
Expendi Expendi
ture on
ture on Expendi Expendi expendi
expendi
ture on
public
private
ture on
ture on
ture on
education
elemen
elemen
elemen
public
private
(including tary and tary and
higher
higher
tary and
secondary secondary education education secondary
capital
outlay)
schools
schools (including (including schools
capital (including
(5+6+7+8) (including (including capital
capital
capital
capital
outlay)
outlay)
outlay)
outlay)
outlay)
(5+6)
(4)
1287, 751
1 571,688
86,600,000 i 1,382,658
88,200,000
3,182,316
97,100,000
3,176,804
8,743,885
10,696,434
13,949,876
45,786
91,896
216,366
632,249
605,755
2,123,275
2,324,527
3,413,668
1955.
See footnote at end of tables.
(6)
(7)
214,965
426,250
1,036,151
2,316,790
2,344,049
5,837,643
7,344,237
9,172,129
i 27,000
53,542
i 130,141
233,277
227,000
782,967
1,027,670
1,364,079
i 24,463
i 49,100
115,597
288,909
332,592
1,174,125
1,313,084
1,911,750
(8)
(9)
121,323
1241,965
i 42,796
1 479,792
100,769 11,166,292
343,340
2,550,067
273,163 2,571,049
949,150
6,620,610
1,011,443
8,371,907
1,501,918 10,536,208
Total expend Total expend Total expend Total State Total Federal
iture on
iture on
iture on
and local
expenditure
higher edu public edu private edu expenditure on education
cation
cation
cation
on education (including
(including
(including
(including
(including
capital
capital
capital
capital
capital
outlay and
outlay) (7+8) outlay) (5+7) outlay) (6+8)
grant to
outlay)
States)
( 10)
1900.
1910.
1920.
1930.
1940.
1950.
1952.
1954.
(5)
( 11)
i 239,428
i 475,350
1,151,748
2,605,699
2,676,641
7,011,768
8,657,321
11,083,879
( 12)
i 48,323
i 96,338
230,910
576,617
500,163
1, 732,117
2,039,113
2,865,997
(13)
255.000
577.000
1.705.000
2.311.000
2.638.000
7.177.000
8.318.000
10.557.000
11.907.000
(14)
174,930
3,618,900
1, 561, 574
280
ECONOMIC GROWTH AND STABILITY
T able A -V I .— Qross national product and educational expenditure^-Gontimxed
EDUCATIONAL EXPENDITURES AS PERCENT OF GROSS NATIONAL PRODUCT
[A ll figures in th o u sa n d s of d o llars]
Year
Total edu
cational ex
penditure
(4-2)
Total ex
penditure
on elemen
tary and
secondary
education
(9-2)
Total ex
penditure
on higher
education
(10-5-2)
Total ex
penditure
on public
education
(all levels)
(11+2)
Total ex
penditure
on private
education
(all levels)
(12-4-2)
State and
local gov
ernment ex
penditure
on educa
tion
(13-5-2)
(15)
(16)
(17)
(18)
(19)
(20)
(21)
1900___ ________
1910.......................
1920.— ......... ........
1930____________
1940— ..................1950.......... - ...........
1952....................
1954........................
1955_...............
1956..._________
3.49
3.16
3.07
3.09
2 3.87
2.80
2.56
2.32
2.42
2.92
0.69
.60
.74
.67
.95
2.86
2.66
2.46
2.50
3.07
0.63
.50
.61
.59
.80
i
:
2; 54
2.62
2. $2
2.40
2.93
3.04
1 Federal grants to States and local governments for education included in expenditures of col. 13 and
ncluded in Federal figure in col. 14; then adding cols 13 and 14 involves double counting.
2 Denotes estimation due to the need to estimate expenditure on private elementary and secondary schools
in 1954.
S ources fo r T a ble A -V I
,
. Col. 2. Figures for 1930-52 from National Income, 1954, supplement, pp. 162-163, table No. 2. Figures
‘for 1954 from Business Statistics, 1955, supplement, p. 3. Figures for 1955-56 from Survey of Current Busi
ness, July 1957, pp. 30-31, table No. 49.
Col. 3. Figures for entire column from Painter, Federa.1 Reserve Bulletin, September 1945, p. 873.
Col. 5. Figures for 1900-1952 from Biennial Survey 1950-52, ch. 1, p. 18, table No. 11. Figure for 1954 from
Trends in School Finance, p. 49, table No. 42.
Col'. 6. Figures for 1910, 1930-52 from Statistical Abstract, 1956, p. 124, table No. 146. Figures for 1900,
1920, and 1954 estimated on basis of preceding (or subsequent) proportions of public and private expenditure
of total elementary and secondary expenditure.
Col. 7. Figures for 1920-52 from Statistical Abstract, 1956, p. 124, table No. 146. Figures for 1900, 1910
estimated on basis of total expenditure on higher education given in same table. Figure for 1954 from
Biennial Survey 1952-54, ch. 4,*pt. II. pp. 106,121, tables Nos. 5, 7.
Col. 8. Same as col. 7 for years 1900-1952. Figures for 1954 from Biennial Survey 1952-54, pp. 108, 122,
tables Nos. 5, 7.
Col. 13. 1900,1910, 1920,1930 figures are actually for years 1902,1913,1922, 1932, respectively. All figures
come from Historical Statistics on State and Local Government Finance 1902-53, p. 17, table I, except for
1954 and 1955 figures, which come from Summary of Government Finances in 1955, p. 26, table No. 8.:
Col. 14. 1955 figure from Federal Funds for Education, 1954-55, 1955-56, p. 24, table No. 7. 1950 figure
from Federal Funds for Education, 1950-51, 1951-52, p. 5, table No. 2. 1940 figure from Federal Funds for
Education, 1938-39, 1939-40, p. 27, table No. 5, with $21,358,000 added for expenditure not attributable to
any given State—that figure being the one for 1942.
T able
A.-VII.— Average annual number of migrants, by region of residence at
beginning and end of year: April 1953 to March 1956
Region of residence at end of
year
,
. . ,
Northeast. ____ ____________
North Central- —......... ........ ........
South_____________________ _
West_______________ _______
Total migrants from a county in.
Region of residence at beginning of year
Northeast
1.424.000
105.000
198.000
115.000
1.842.000
North
Central
71,000 :
2.051.000
342, 000
238,000
2.702.000
South
West
270,000
487,000
2, 726,000
334, 000
3,817,000
57,000
186,000
271,000
1.558.000
2.072.000
Total mi
grants into a
county of—
1,822,000
2.829.000
3.538.000
2.245.000
10,434,000
Source: Current Population Reports; series P-20, No. 73, p. 18, table No. 11.
From the above information we can compute average annual net migration of each region by subtract
ing the appropriate column sum from the appropriate row sum.
T able
A -V III .— Average annual net migration, by regions, 1958-56
R egion :
N e t m igratio n
Northeast__________________________________________________
—20,000
North Central______________________________________________
127, 000
South______________________________________________________ —279, 000
West_______________________________________________________
173, 000
S ource : C alculated from ta b le A -V II.
ECONOMIC GROWTH AND STABILITY
281
A -IX. — Current expenditure on public elementary and secondary schools:
and personal income, 1954, by States
T a b le
[All in thousands of dollars except col. No. 5]
.
State
Expenditure
(current^ on
public ele
mentary and
secondary,
schools, 1954
Personal
income,
1954
Expenditure
on schools
as percent
of personal
income,
1954
Current ex
penditure
per pupil
in average
daily at
tendance
in public
secondary
and ele
mentary
schools, 195*
United
States
average—
$264.76
(1)
(2)
(3)
(4;
(5)
Northeast:
Connecticut...................................................
M a in e .___ _______ _ ______ ______
Massachusetts..............................................
New Hampshire____ _________ . ___ .
New Jersey........... .......................................
New York ............ .............................. . Pennsylvania............................. ...................
Rhode Island..................................................
Vermont________________ ____________
North Central:
Illinois .......................-................................
Indiana... . ....... .......................... ...............
Iowa._____ ________________________
Michigan_____ _ ________ ..____ _____
Minnesota... ....... .. ..........
Missouri.................................. ............ . ..
Nebraska. .......................... ...........................
North Dakota................................................
Ohio-.. ............................. ................. ......
South Dakota_____________ __________
Wisconsin.....................................................
South:
Alabama................................ ........... .............
Arkansas..................... ........... ................. .
Delaware.........................................................
Florida............................................................
Georgia............................................................
Kentucky________ ___ _ _________ ..
Louisiana............................................ ...........
M aryland....... ............. ........... ...................
Mississippi ... ................................... ...... .
North Carolina___ ________ . ________
Oklahoma ______________ _____ _______
South Carolina________ ______________
Tennessee.................. ...... ... . __________
Texas. ,. . ______________________ ____
Virginia..... ..................................................
West Virginia.................................................
West:
Arizona..........................................................
California.-........................................
Colorado................... _ ..........
. . ..
Idaho................................... ............ .............
Montana............. ......... .................................
Nevada.........................................................
New Mexico ............ ...............................
Oregon.............................. .. ......................
Utah.......... ................ . . _ _
Washington........ ....... . ............ ..........
Wyoming....... .......................... . .
.
District of Columbia____ ________
..
_
$92, 755
30,872
189, 814
19.025
233,639
709,174
460, 628
25, 608
14,542
$5,156,000
1,304,000
9,448,000
894,000
11, 619,000
34,175,000
19,646,000
1, 522,000
536,000
1.80
2. 37
2.01
2.13
2.01
2.08
2.34
1.68
2. 71
$296.80
199.33
298.39
256.38333.31
361.99'
299.31
268.05
245.31.
383,164
192,114
127,059
94.014
325, 497
143, 829
139,481
59,027
28,924
338, 214
31,930
147,615
19, 786,000
7,619,000
4.449,000
3. 410. O.Ki
14.172,000
5,169, 000
7, 066, 000
2, 236,000
760, 000
17, 221,000
901,000
6, 212, 000
1.94
2.52
2. 86
2. 70
2.30
2. 78
1.97
2.64
3. 81
1.96
3.54
2. 38
318.81
279.57
273.91
263. 79*
282.82
286.59*
232.79262.45.
262.40
253.88
274. 91
293.3ft
92, 895
49, 598
16, 597
123,843
125,198
78, 332
120, 523
103,849
55, 444
154, 700
96, 969
80, 527
100, 402
346. 615
118,701
76, 244
3, 239, 000
1, 781, 000
891, 000
5, 342, 000
4, 418,000
3, 594, 000
3, 742, 000
5, 079,000
1, 811,000
4, 959, 000
3,159, 000
2,391,000
4, 038.000
13,300.000
5, 193. 000
2,419, 000
2.87
2. 78
1.86
2. 32
2. 83
2.18
3. 22
2.04
3.06
3.12
3.07
3. 37
2.64
2. 61
2.29
3.15
150.8S
139.19
325. 42
228.74
177. 41
153.17
246.65
268.47
122. 6ft
176. 97
223. 87
176.34
166.36*
249.22
192.56186.09-
45,990
727, 557
69,210
29, 229
34, 989
10,482
38. 367
91,236
34, 723
129,610
18. 434'
27, 736
1, 486, 000
27,148,000
2, 519,000
861,000
1, 074. 000
506,000
1,077,000
2, 903,000
1,146,000
4. 963. 000
536. 000
1,871,000
3.09
2.68
2. 75
3.39
3. 26
2.07
3. 56
3.14
3.03
2.61
3. 44
1.48
281.6£
314. 51
279. 76
237. 81
327. 99
294.12
264. 71
336. 72
208.18
305. 42
329.86>
302.10
Col. 2: Biennial Survey of Education, 1953-54, ch. 2, pp. 70-77, table No. 26.
Col. 3: Personal Income by States since 1929, supplement to Survey of Current Business, 1953, pp. 1
table No. 1.
Col. 4: Computed from cols. 2 and 3.
Col. 5: Biennial Survey of Education, 1953-54, pp. 102-103. table No. 39.
282
ECONOMIC GROWTH AND STABILITY
T a b l e A - X .— Expenditures for research and gross national product
fAll figures in thousands of'dollars]
Year
Gross
national
product
Total ex
penditures
for research
and devel
opment
(4-5-5+6)
Federal ex
penditures
on research
and devel
opment 12
(1)
(2)
(3)
(4)
1937,................................. - ...........
1938........- ................................... .
1939........................................ ........
1940................................. - .............
1941........... ...................................
1942 _______________________
1943_________ ______________
1944....................................... ........
1945 __________ ____________
1946_________ ______________
1947................... ............................
1948______ _______ _________
1949________________________
1950.................................................
1951..................... ...........................
1952...............................................
1953.................................................
1954.................. ..............................
1955..................... ...........................
1956____________ ___________
1957............................ ....................
90.780.000
85.227.000
91.095.000
100,618,000
125.822.000
159.133.000
192, 513,000
211.393.000
213.558.000
209, 246, 000
232, 228, 000
257.325.000
257.301.000
285.067.000
328, 232,000
345.445.000
363.218.000
361.167.000
391.692.000
414.686.000
(5)
124.000
108.000
727,900
860,300
1,032,400
1,817,200
2,040,700
1.787.800
1,999,900
2.074.800
2.142.000
2.342.800
2,680, 500
3,326, 200
4.649.000
Private com Private non
mercial ex
profit ex
penditures
penditures
on research
on research
and devel
and devel
opment
opment i
74,100
197.900
280,300
602,400
1.377.200
1, 590,700
917.800
899.900
854.800
1,082,000
1,082,800
1,300, 500
1.816.200
2,099,000
2,084, 200
2,133,400
2, 282,000
2,560,800
(6)
198,680
280,132
510.000
560.000
410.000
420.000
430.000
840.000
1.050.000
1.150.000
990.000
1.180.000
1.300.000
1.430.000
2.370.000
20,000
20,000
20,000
20,000
20,000
30.000
50.000
70.000
70.000
80.000
80,000
80,000
180,000
[Percent]
Year
( 1)
1937..
1938..
1939..
1940..
1941.,
1942.,
1943..
1944..
1945.,
1946.,
1947..
1948.,
1949..
1950.,
1951.,
1952..
1953..
1954.,
1955.,
1956.,
1957.
Total
Federal
Private
Federal
Nonprofit
expenditures expenditures commercial expenditures expenditures
on research expenditures on research
on research
on research
and devel
and devel
on research
and devel
and devel
opment as
opment as
and devel
opment as
opment as
percent of
percent of
opment as
percent of
percent of
gross
gross
percent of
gross
total expend
national
national
gross
national
iture on
product
product
national
product
research and
(3-2)
(4-2)
product
( 6 - 2)
development
(5-2)
(4-3)
(7)
(8)
(9)
0.14
.13
0.58
.54
.54
(10)
0.23
.28
.41
.35
.21
.20
.85
.86
.81
.83
.82
.82
.96
1.28
(ID
.20
.40
.45
.45
.38
.41
.40
.41
.65
0.02
.01
.01
.01
.01
.01
.02
.03
.03
.03
.02
.02
.05
27.19
32.58
58.35
75.79
77.95
51.34
45.00
41.20
50.51
46.22
48.52
54.60
45.15
283
ECONOMIC GROWTH AND STABILITY
S o u r c e s t o T a b l e A -X
.
Col. 2: Figures for 1936-56 from Survey of C u rren t Business, Ju ly 1957, pp. 8-9, table N o. 2.
Col. 3: C alculated from cols. 4, 5, an d 6.
Col. 4: Figures for 1937-38 from Research—A N ational Resource, vol. 1, p. 66, table N o. 1.
Figures for 1940-57 from Federal F u n d s for Science, V, pp. 46-47, table No. 10.
T h e 1956 a n d 1957 figures are estimates.
Col. 5: Figures for 1938 and 1940 are estim ated from inform ation given in Research—N ational Resource,
vol. II, p. 173. On th e basis of th e cost of research as $4,000 per m an-year of research personnel, together
w ith th a t in 1940 there were 70,033 research workers in A merican industry (41 percent more th a n in 1938),
th e figures for 1938 an d 1940 can be derived. I t is assumed th a t G overnm ent expenditures in 1938 an d 1940
for research was entirely performed by a G overnm ent agency.
Figures for 1941-52 from D ep artm en t of Defense, G row th of Scientific Research and D evelopm ent, p. 10,
table No. 1. These figures apply only to industrial research in the natu ral sciences (including medicine)
a n d engineering. H ow ever, because p riv ate in d u stry ’s research in the social scicnces is probably quite
lim ited, expenditure for research and developm ent in th e n atu ral sciences and engineering seems adequate.
I n view of th e fact th a t th e source m akes no m ention as to how the d a ta were compiled, w hether or n o t
item s such as capital outlay, etc., were included, it seems th a t n o t too m uch confidence can be placed in the
data. Such suspicion is reinforced by the fact th a t N S F d a ta for 1953 show an alm ost $1,000,000,000 increase
in industrial research and developm ent expenditures over th e 1952 figure given b y D epartm ent of Defense.
Figure for 1953 from Reviews of D ata on Research an d D evelopm ent, N o. 1, p. 2, table No. 1. T his
figure is also for research in n a tu ra l sciences alone.
Col. 6: Figures for 1941-52 from D ep artm en t of Defense, G row th of Scientific Research and D evelopm ent,
p. 10y table N o. 1. Same comment here as to reliability of th e estim ate as expressed above u nder col. 5.
Figure for ]953 from Review of D a ta on Research and D evelopm ent, No. 1, p. 2, table No. 1.
All figures in col. 6, as in col. 5, refer only to expenditures for research and developm ent in the n atu ral
sciences an d engineering. T h e exclusion of the social sciences is probably more serious in the case of the
nonprofit in stitu tio n th a n w ith private industry.
Cols. 7, 8, 9, 10, an d 11: C alculated from cols. 2 and 3, 2 and 4, 2 and 5,2 and 6, and 3 and 4, respectivelyN otes to T able A -X
1 Cols. 4, 5, an d 6 refer to sources of funds for research and development. T he actual performance of the
research m ay, in the case of G overnm ent funds, be done, say, by a private commercial enterprise.
2 In col. 4 the figures for 1956 an d 1957 are estimates, all other figures are actual expenditures, not obliga
tions, for fiscal, ra th e r th a n calendar, years. Such figures exclude developm ent expenditures from D epart
m en t of Defense procurem ent funds and the pay of m ilitary personnel engaged in research a nd developm ent.
T he m agnitude of these la tte r elem ents was, in 1955, $635,000,000 for research and developm ent from D e
p artm en t of Defense procurem ent funds, an d $157,000,000 of pay of m ilitary personnel engaged in research
and developm ent. (Source: Federal F u n d s for Science, V, for fiscal 1955, 1956, and 1957, p. 4.) I t is the
exclusion of these 2 categories of expenditures which probably accounts for the generally higher Federal
expenditure figures given in D ep artm en t of Defense publication, T he G row th of Scientific Research and
D evelopm ent. N either of the 2 sources include routine statistical collection and publication in the defini
tion of research an d developm ent.
T he W orld W ar I I expenditure on research and developm ent b y Federal G overnm ent includes expendi
ture for construction of production facilities (Oak Ridge, Los Alamos) for the atom ic bom b. To this extent,
Federal research and developm ent expenditure is overstated for W orld W ar II.
[ G e n er a l N ote .—All d ata, insofar as can be determ ined, include expenditures for research and develop
m ent p lan t and equipm ent.
t Since expenditures on research an d developm ent cannot be defined precisely, a good deal of variation
exists in d a ta derived from different sources.
T a b le A - X I .— Federal research and development expenditure, by function,
195S-56 1
{All figures in thousands of dollarsl
Fiscal year
N ational
security
(1)
(2)
1953............. .......................
1954....... .............................
1955___________ ______ _
1956__________________
1,830,920
1,804,310
1, 745, 672
1,862,902
In tern a
V e teran s’
tional
services affairs and
finance
(3)
4,600
5,130
5,312
5,870
(4)
1,792
1,143
1,144
1,421
Total Fed
eral research
All other 0 and develop
m ent ex
penditures
(cols. 2,3, 4, 5)
(5)
281,572
291, 886
331, 879
358,901
(6)
2,118,884
2,102,469
2,084,007
2, 229,094
All other research
and developm ent
expenditures as
percent of total
Federal research
and developm ent
expenditures
(cols. 5, 6)
(7)
13. 29
13.88
15.93
16.10
1 Federal research and developm ent expenditure here includes capital outlay and apparently norm al
statistical collection.
2 T he “ All other” includes a m u ltitu d e of functions which are given separately in the source.
I t encom
passes: Social security, welfare, and health; housing and com m unity developm ent; education an d g vieral
research; agriculture and agricultural resources; n atu ral resources; transportation and com m unication;
finance, commerce, and industry; labor and manpower; and general government.
Sources: Cols. 2 and 5: Figures for 1953 from N S F , Federal F unds for Science, II I, pp. 28-30, table No. 3.
Figures for 1954-56 from N S F , Federal F unds for Science, IV , pp. 24-26, table No. 3. 1955 and 1956 figures
are estimates. Cols. 6 and 7: C alculated as shown on table.
284
ECONOMIC GROWTH AND STABILITY
T able A-X IL — Basic and applied research and development in Federal
obligations, 1958-57
Fiscal year
T otal current Federal obli Federal obli Federal obli Federal obli
Federal obli
gation for
gation for
gation for
gation for
gation for
basic re
applied re
basic re
applied re
research and
search and
search and
search and
search and
develop
develop
develop
develop
develop
m ent
m en t
m ent
m ent
m ent
T h ou san d s
1953........... .............. .....................
1954...... ......................... .................
1955........................................ ........
1956................................................
1957....................... - .......................
$1,919.500
1, 744,000
1,887,500
2,205,205
2,382,400
T h ou san d s
$116,000
116,000
130,100
162,100
215,100
T h ou san d s
$1,803,500
1,628,000
1,757,400
2,043,100
2,167,300
P ercen t
6.0
6.7
6.9
7.4
9.0
P ercen t
94.0
93. a
93.1
92.6
91.0
N ote.—All of the figures in this table are Federal Government obligations, as distinct from expendi
tures; hence these data are not exactly comparable with those presented in other tables.
Sources: Figures for 1953 from Federal F u n d s for Science, II I, p. 9; 1954 from Federal F unds for Science*
IV , p. 9; 1955-57 from Federal F u n d s for Science, V, p. 11. Figures for 1956 and 1957 are budget estimates*
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