The Impact of NSF Support For Basic Research in Economics

This paper studies an unusually rich data set of all the 1473 applications to the NSF in economics during 1985-1990. This dataset is unusual in that one can observe the characteristics of the scientists whose application was accepted (414 applications in our sample) as well as of those whose applications were rejected. We estimate the effect of an NSF grants on the research output (quality-adjusted publications) of individual researchers. Estimates indicate that NSF funding has only a modest effect on scientific publication output, with the possible exception of junior scholars. We also analyse some related issues, such as the factors that affect the NSF selection process and the decision about the size of the grants.