The Economic Impact of Universities: Evidence from Across the Globe
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 neighboring 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.
We would like to thank Andrei Shleifer, Henry Overman and Andy Feng and participants at seminars at the CEP, LSE and Treasury for helpful comments. Nicola Gennaioli, Rafael La Porta and Florencio Lopez De Silanes were kind enough to make their regional data available to us. This project has received funding from the European Research Council (ERC) under the European Union's Horizon 2020 research and innovation programme (Grant Agreement Number 670862). The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Anna Valero & John Van Reenen, 2018. "The Economic Impact of Universities: Evidence from Across the Globe," Economics of Education Review, . citation courtesy of