The economic impact of universities: evidence from across the globe

Valero, Anna and Van Reenen, John ORCID: 0000-0001-9153-2907 (2016) The economic impact of universities: evidence from across the globe. CEP Discussion Paper (1444). London School of Economics and Political Science. Centre for Economic Performance, London, UK.

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Abstract

We develop a new dataset using UNESCO source materials on the location of nearly 15,000 universities in about 1,500 regions across 78 countries, some dating back to the 11th Century. We estimate fixed effects models at the sub-national level between 1950 and 2010 and find that increases in the number of universities are positively associated with future growth of GDP per capita (and this relationship is robust to controlling for a host of observables, as well as unobserved regional trends). Our estimates imply that doubling the number of universities per capita is associated with 4% higher future GDP per capita. Furthermore, there appear to be positive spillover effects from universities to geographically close neighbouring regions. We show that the relationship between growth and universities is not simply driven by the direct expenditures of the university, its staff and students. Part of the effect of universities on growth is mediated through an increased supply of human capital and greater innovation (although the magnitudes are not large). We find that within countries, higher historical university presence is associated with stronger pro-democratic attitudes.

Item Type:	Monograph (Discussion Paper)
Official URL:	http://cep.lse.ac.uk/
Additional Information:	© 2016 The Authors
Divisions:	Centre for Economic Performance
Subjects:	L Education > LB Theory and practice of education > LB2300 Higher Education
JEL classification:	I - Health, Education, and Welfare > I2 - Education > I23 - Higher Education Research Institutions J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J24 - Human Capital; Skills; Occupational Choice; Labor Productivity O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O10 - General O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O31 - Innovation and Invention: Processes and Incentives
Date Deposited:	09 Sep 2016 14:36
Last Modified:	11 Dec 2024 19:22
Funders:	Economic and Social Research Council, Economic and Social Research Council
URI:	http://eprints.lse.ac.uk/id/eprint/67680

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