Should the government stimulate enrolment in science and engineering studies?

Abstract

In many countries there is a deep concern about shortages of Science and Engineering workers (S&E). This article focuses on the effectiveness of policies aimed at stimulating the supply of S&E workers in the Netherlands. Despite the ‘common wisdom’ of severe and increasing shortages, we do not find evidence for a tight labour market of S&E workers. Instead, the data suggest that S&E workers have become less scarce since 1996. Stimulating enrolment in S&E studies may not be an effective policy for increasing R&D activity in the Netherlands because the majority of Dutch S&E freshmen do not end up working in R&D. They drop out during their S&E study or choose other jobs. In addition, the internationalization of the market for S&E workers tends to counter the effects of supply-side policies because the growing supply of foreign S&E graduates puts downward pressure on wages. As a result, demand-side policies may be more effective because they are directly targeted at fostering R&D.

Acknowledgements

We gratefully acknowledge comments from Free Huizinga, Hessel Oosterbeek, Marc Pomp, Maarten Cornet and Rob Euwals and participants at seminars at CPB and the Ministry of Finance.

Notes

¹S&E fields of study include life sciences, physical sciences, mathematics and statistics, computing and engineering.

²For 1996 and later years, we made a distinction between fields of S&E studies. For all fields of S&E education, the relative wage position has deteriorated since 1996 (not shown in table).