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The Effect of Postsecondary Educational Institutions on Local Economies: A Bird's-Eye View

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Listed:
  • Lehnert, Patrick

    (University of Zurich)

  • Dell, Madison

    (Stanford University)

  • Backes-Gellner, Uschi

    (University of Zurich)

  • Bettinger, Eric

    (Stanford University)

Abstract

Despite worldwide expansion of higher education, the impact of higher education institutions on local economic activity is still poorly understood. We analyze the local economic effects of branch campus openings in Tennessee and Texas, two states representative of the underlying U.S. enrollment patterns. To overcome the lack of adequate data, we use a novel proxy for regional economic activity based on daytime satellite imagery. Applying different panel methods—traditional difference-in-differences (DD), heterogeneity-robust DD, and instrumental variables—we find positive effects. Independent data show an increase in college graduates and employment in the sectors aligned with programs offered at branch campuses.

Suggested Citation

  • Lehnert, Patrick & Dell, Madison & Backes-Gellner, Uschi & Bettinger, Eric, 2024. "The Effect of Postsecondary Educational Institutions on Local Economies: A Bird's-Eye View," IZA Discussion Papers 17059, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp17059
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    References listed on IDEAS

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    More about this item

    Keywords

    postsecondary education; regional economic development; higher education; social returns to education;
    All these keywords.

    JEL classification:

    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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