Why Government-Provided Data May Actually Be Bad For The Economy

Today’s StocksMoneyMarketsWhy Government-Provided Data May Actually Be Bad For The EconomyByJames Broughel,Contributor.Forbes contributors publish independent expert analyses and insights. James Broughel is an economist focused on the economics of regulation.Follow AuthorJun 15, 2026, 06:22am EDTThe new data age has made academic social science cheaper to produce. The downside is talented people are diverted from work that the market values more.gettyGovernment data are usually described as a public good. A dataset collected once can be used by many researchers for many projects. Making data available lowers the cost of research and can also make government policy more transparent. But that argument misses what cheap data does to career incentives. When government supplies the raw material for publishable research, academia starts to look more attractive to people who might otherwise take their skills elsewhere.A useful dataset can do more than answer a clever research question; it can make an academic career more viable. The right data might give a dissertation enough traction to become a whole sequence of papers, and for a young researcher with strong quantitative skills, that can make academia look safer than a job on a product team. In those cases, taxpayers have done more than pay for data collection. They have helped tilt a career choice toward academia.Government data can become a public bad at the margin. It lowers the private cost of academic production while the social value of the marginal paper is often trivial. The worker who might have built software, improved logistics, or evaluated private investments instead produces another study designed for referees. While that may look like knowledge creation, much of the time it moves talent into a market that rewards citations and prestige instead of profit and customers.Incentives MatterThe scale of the data subsidy is no longer small. Data.gov reports 361,525 datasets in its catalog. IPUMS reports 2.6 billio...