The Economic Impact of Colleges and Universities
AbstractThis essay describes methodological approaches and pitfalls common to studies of the economic impact of colleges and universities. Such studies often claim local benefits that imply annualized rates of return on local investment exceeding 100 percent. We address problems in these studies pertaining to the specification of the counterfactual, the definition of the local area, the identification of "new" expenditures, the tendency to double count economic impacts, the role of local taxes, and the omission of local spillover benefits from enhanced human capital created by higher education, and offer several suggestions for improvement. If these economic impact studies were conducted at the level of accuracy most institutions require of faculty research, their claims of local economic benefits would not be so preposterous, and, as a result, trust in and respect for higher education officials would be enhanced.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Vanderbilt University Department of Economics in its series Vanderbilt University Department of Economics Working Papers with number 0612.
Date of creation: May 2006
Date of revision:
Contact details of provider:
Web page: http://www.vanderbilt.edu/econ/wparchive/index.html
Colleges; universities; local economic impact; economic impact study;
Other versions of this item:
- I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-06-10 (All new papers)
- NEP-EDU-2006-06-10 (Education)
- NEP-GEO-2006-06-10 (Economic Geography)
- NEP-SOG-2006-06-10 (Sociology of Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Moretti, Enrico, 2004.
"Estimating the social return to higher education: evidence from longitudinal and repeated cross-sectional data,"
Journal of Econometrics,
Elsevier, vol. 121(1-2), pages 175-212.
- Enrico Moretti, 2002. "Estimating the Social Return to Higher Education: Evidence From Longitudinal and Repeated Cross-Sectional Data," NBER Working Papers 9108, National Bureau of Economic Research, Inc.
- Bound, John & Groen, Jeffrey & Kezdi, G.Gabor & Turner, Sarah, 2004. "Trade in university training: cross-state variation in the production and stock of college-educated labor," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 143-173.
- Milligan, Kevin & Moretti, Enrico & Oreopoulos, Philip, 2004. "Does education improve citizenship? Evidence from the United States and the United Kingdom," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1667-1695, August.
- Edward L. Glaeser & Jose A. Scheinkman & Andrei Shleifer, 1995.
"Economic Growth in a Cross-Section of Cities,"
NBER Working Papers
5013, National Bureau of Economic Research, Inc.
- Glaeser, E.L. & Scheinkman, J.A., 1993. "Economic Growth in a Cross-Section of Cities," Harvard Institute of Economic Research Working Papers 1645, Harvard - Institute of Economic Research.
- Daron Acemoglu & Joshua Angrist, 1999.
"How Large are the Social Returns to Education? Evidence from Compulsory Schooling Laws,"
NBER Working Papers
7444, National Bureau of Economic Research, Inc.
- Daron Acemoglu & Joshua Angrist, 1999. "How Large are the Social Returns to Education? Evidence from Compulsory Schooling Laws," Working papers 99-30, Massachusetts Institute of Technology (MIT), Department of Economics.
- Janet Currie & Enrico Moretti, 2003. "Mother'S Education And The Intergenerational Transmission Of Human Capital: Evidence From College Openings," The Quarterly Journal of Economics, MIT Press, vol. 118(4), pages 1495-1532, November.
- Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
- Groen, J.A.Jeffrey A., 2004. "The effect of college location on migration of college-educated labor," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 125-142.
- Lange, Fabian & Topel, Robert, 2006. "The Social Value of Education and Human Capital," Handbook of the Economics of Education, Elsevier.
- Lance Lochner & Enrico Moretti, 2004.
"The Effect of Education on Crime: Evidence from Prison Inmates, Arrests, and Self-Reports,"
American Economic Review,
American Economic Association, vol. 94(1), pages 155-189, March.
- Lance Lochner & Enrico Moretti, 2001. "The Effect of Education on Crime: Evidence from Prison Inmates, Arrests, and Self-Reports," NBER Working Papers 8605, National Bureau of Economic Research, Inc.
- Smith, Adam, 1776. "An Inquiry into the Nature and Causes of the Wealth of Nations," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number smith1776.
- Getz, Malcom & Huang, Yuh-ching, 1978. "Consumer Revealed Preference for Environmental Goods," The Review of Economics and Statistics, MIT Press, vol. 60(3), pages 449-58, August.
- repec:fth:stanho:e-95-4 is not listed on IDEAS
- Bernard F. Lentz & David N. Laband, 2008. "The Impact of College Athletics on Employment in the Restaurant and Accommodations Industries," Working Papers 0803, International Association of Sports Economists & North American Association of Sports Economists.
- Eduardo Ferreira Vinhais, Henrique & Guilhoto, Joaquim José Martins, 2012. "Economic impact of the expansion of federal universities in Brazil," MPRA Paper 53998, University Library of Munich, Germany.
- Kristinn Hermannsson & Katerina Lisenkova & Peter McGregor & Kim Swales, 2010. "â€œPolicy Scepticismâ€ and the Impact of Welsh Higher Education Institutions (HEIs) on their Host Region: Accounting for Regional Budget Constraints," Working Papers 1022, University of Strathclyde Business School, Department of Economics.
- Jose M. Pastor & Juan Fernández de Guevara & Francisco Pérez, 2010. "Measuring the local economic impact of universities: an approach that considers uncertainty," Investigaciones de Economía de la Educación volume 5, in: María Jesús Mancebón-Torrubia & Domingo P. Ximénez-de-Embún & José María Gómez-Sancho & Greg (ed.), Investigaciones de Economía de la Educación 5, edition 1, volume 5, chapter 54, pages 1061-1090 Asociación de Economía de la Educación.
- José António Pacheco Sequeira & Aurora A. C. Teixeira, 2011. "Assessing the influence and impact of R&D institutions by mapping international scientific networks: the case of INESC Porto," Economics and Management Research Projects: An International Journal, Open Access International Journals, vol. 1(1), pages 8-19, February.
- Timothy J. Bartik & George Erickcek, 2007. "Higher Education, the Health Care Industry, and Metropolitan Regional Economic Development: What Can “Eds & Meds” Do for the Economic Fortunes of a Metro Area’s Residents?," Upjohn Working Papers and Journal Articles 08-140, W.E. Upjohn Institute for Employment Research.
- Kristinn Hermannsson & Katerina Lisenkova & Peter McGregor & Kim Swales, 2010. "Ã¢â‚¬Å“Policy ScepticismÃ¢â‚¬Â and the Impact of Scottish Higher Education Institutions (HEIs) on their Host Region: Accounting for Regional Budget Constraints under Devolution," Working Papers 1015, University of Strathclyde Business School, Department of Economics.
- Rebecca Bess & Zoë O. Ambargis, 2011. "Input-Output Models for Impact Analysis:Suggestions for Practitioners Using RIMS II Multipliers," BEA Working Papers 0081, Bureau of Economic Analysis.
- Blomquist, Glenn C. & Coomes, Paul A. & Jepsen, Christopher & Koford, Brandon C. & Troske, Kenneth, 2009. "Estimating the Social Value of Higher Education: Willingness to Pay for Community and Technical Colleges," IZA Discussion Papers 4086, Institute for the Study of Labor (IZA).
- Kristinn Hermannsson & Katerina Lisenkova & Peter McGregor & Kim Swales, 2010. "â€œPolicy Scepticismâ€ and the Impact of Northern Irish Higher Education Institutions (HEIs) on their Host Region: Accounting for Regional Budget Constraints," Working Papers 1025, University of Strathclyde Business School, Department of Economics.
- Kristinn Hermannsson & Katerina Lisenkova & Peter McGregor & Kim Swales, 2010. "Ã¢â‚¬Å“Policy ScepticismÃ¢â‚¬Â and the Impact of London-based Higher Education Institutions (HEIs) on the economy of England: Accounting for Alternative Uses of Public Expenditure," Working Papers 1029, University of Strathclyde Business School, Department of Economics.
- Zoë O. Ambargis & Thomas McComb & Carol A. Robbins, 2011. "Estimating the Local Economic Impacts of University Activity Using a Bill of Goods Approach," BEA Working Papers 0074, Bureau of Economic Analysis.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (John P. Conley).
If references are entirely missing, you can add them using this form.