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.
Authors
Patrick Lehnert, Madison Dell, Uschi Backes-Gellner, Eric Bettinger
- Acknowledgements & Disclosure
- We thank Simon Janssen, Mark Long, Guido Neidhöfer and Niels Westergård-Nielsen for important feedback. We also appreciate feedback provided by participants of Hoover Institution’s Economic Policy Working Group seminar at Stanford University, the Leading House VPET-ECON’s Friday Lunch Talk seminar at the University of Zurich, the Regional Disparities & Economic Policy seminar at the University of Duisburg-Essen, the Colloquium on Personnel Economics at Aarhus University, the First International Leading House Conference on the “Economics of Vocational Education and Training” at the University of Zurich, the DRUID Conference at the NOVA School of Business in Lisbon, the SASE Annual Conference in Rio de Janeiro, and the Leuven Economics of Education Research Conference at KU Leuven. Ryan Brennan, Hannie Chen, Andrew Conkey, Minha Khan, Anushka Rawat, and Cecilia Xia provided excellent research assistance for this project. Patrick Lehnert acknowledges funding from the Swiss State Secretariat for Education, Research and Innovation (SERI) through its Leading House VPET-ECON (contract number 1315002234). Madison Dell acknowledges that the views expressed in this paper are those of the authors and do not necessarily reflect the views of TBR–The College System of Tennessee. Uschi Backes-Gellner thanks Stanford’s Graduate School of Education for their generous hospitality during her research stay. All remaining errors or omissions are our own. Authorship is approximately equal across the four authors. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
- DOI
- https://doi.org/10.3386/w32679
- Pages
- 48
- Published in
- United States of America
Table of Contents
- Introduction 3
- Institutional Background and Setting 9
- Data 10
- Construction of Proxy for Local Economic Activity 11
- Definition of Catchment Areas 13
- Methods 14
- Results 21
- Robustness Checks 24
- Alternative Specifications 25
- Changes in Treatment Radius 25
- Changes in the Definition of Treatment or Control Group: Donut Estimations 27
- Effect Heterogeneity 29
- Two-Year Vs. Four-Year Branch Campuses 29
- Timing of the Effects 30
- Potential Mechanisms 33
- Conclusion 34
- Appendix 38
- References 44
