While Obama and McCain debate the war in Iraq and the financial meltdown, the role of arts and culture funding has taken center stage in the current Canadian contest spurred by recent federal cuts in arts and culture spending. Others have covered what’s at stake in this debate, but let me simply weigh in with what our ongoing research at the Prosperity Institute tells about the role of arts and culture in the economy.

Our most recent research on both Canada and the United States breaks down the economy into its core occupational sectors – finance, management, technology, arts and culture, health. and education – and attempts to guage the effects of each on regional income. In both the U.S. and Canada, finance, management, and technology have a considerable direct effect on income. And both education and health – which are essential for a high-functioning society – have little if any effect on regional income. They’re necessities or public goods, but they don’t drive regional economic well-being. Arts and culture, however, are very important. In the U.S., arts and culture occupations have a significant effect on regional income, about as strong as finance and management and stronger than science technology. In Canada, arts and culture have a less direct impact on income, but a potent impact on high-technology firms, stronger in fact than the impact of science and technology occupations on those firms.