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Are there returns from university location in a state-funded university system?

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  • Suhonen, Tuomo

Abstract

A location in an economically active, high-amenity region could in many ways be a significant advantage for a university and its students and thus could also be positively linked to students' subsequent earnings. Based on this hypothesis, the present study empirically examines the effect of university location choice on earnings in Finland, focusing on the following question: To what extent does the choice of university location explain the observed positive early-career earnings premium for students graduating from the Helsinki metropolitan area rather than from one of the nine other university cities? The results suggest that no positive average earnings premium exists for metro area graduates after differences in students' pre-university characteristics are taken into account. However, the metro area university premium is found to be, to some extent, heterogeneous across fields and regional labour markets. The findings also indicate the importance of accounting for the selective nature of individuals' migration behaviour when conditioning on post-university region in the estimation of university location effects.

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  • Suhonen, Tuomo, 2013. "Are there returns from university location in a state-funded university system?," Regional Science and Urban Economics, Elsevier, vol. 43(3), pages 465-478.
  • Handle: RePEc:eee:regeco:v:43:y:2013:i:3:p:465-478
    DOI: 10.1016/j.regsciurbeco.2013.02.008
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    Cited by:

    1. Kobus, Martijn B.W. & Van Ommeren, Jos N. & Rietveld, Piet, 2015. "Student commute time, university presence and academic achievement," Regional Science and Urban Economics, Elsevier, vol. 52(C), pages 129-140.
    2. Tuomo Suhonen, 2014. "Quality of higher education and earnings: evidence from Finland using field-of-study-level quality measures," International Review of Applied Economics, Taylor & Francis Journals, vol. 28(1), pages 22-44, January.
    3. Silvia Kopecny & Steffen Hillmert, 2021. "Place of study, field of study and labour-market region: What matters for wage differences among higher-education graduates?," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 55(1), pages 1-21, December.
    4. Kuuppelomäki, Tiina & Kortelainen, Mika & Suhonen, Tuomo & Virtanen, Hanna, 2019. "Does admission to elite engineering school make a difference?," Working Papers 127, VATT Institute for Economic Research.
    5. Bacolod, Marigee & De la Roca, Jorge & Ferreyra, María Marta, 2021. "In search of better opportunities: Sorting and agglomeration effects among young college graduates in Colombia," Regional Science and Urban Economics, Elsevier, vol. 87(C).

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    More about this item

    Keywords

    Earnings; University choice; Regional labour markets; Selective migration;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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