Rising bio-medical graduate debt: brain drain from pure to applied research and economic impact
What is it about?
Advanced economies rely on technological progress to ensure a high standard of living. Researchers’ ideas and activities drive technological progress. The bio-medical sciences sector now contributes significantly to economic growth worldwide. However, education costs and thus student indebtedness are rising, particularly in the United States. This study examines two related economic issues: how the career choice of bio-medical research professionals is impacted by the student loans they take and how this choice, limited in this study to a choice between academic or non-profit (curiosity-driven) research and private-sector or for-profit (practical-driven) research, affects the prosperity of advanced economies.
Why is it important?
The study suggests that the increased indebtedness of biomedical researchers strongly incentivizes their pursuit of more lucrative research opportunities at for-profit, private-sector institutions and that the subsequent decrease in curiosity-driven research reduces the rate of technological and scientific progress. This brain drain would also result in less productive researchers. This study is the first to theoretically analyze how student loan indebtedness affects economic growth. By highlighting that the rising indebtedness could affect R&D activities, this study reveals the potential negative impact on the entire economy.