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How universities boost economic growth

Author

Listed:
  • Anna Valero
  • John Van Reenen

Abstract

The expansion of higher education has helped to fuel economic growth around the world, according to research by Anna Valero and John Van Reenen. Analysing data on 15,000 universities in 78 countries for the period since 1950, they find that there is a strong positive impact of university expansion on regional economic growth. Doubling the number of universities in a region raises future GDP per capita by 4%. Focusing on the immediate challenges for the UK, they note that the benefits of university expansion far outweigh the costs, but Brexit poses significant risks. Until now, UK universities have thrived in a climate of openness to international students, academics and collaboration.

Suggested Citation

  • Anna Valero & John Van Reenen, 2016. "How universities boost economic growth," CentrePiece - The Magazine for Economic Performance 488, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepcnp:488
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    File URL: http://cep.lse.ac.uk/pubs/download/cp488.pdf
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    More about this item

    Keywords

    universities; growth; human capital; innovation;

    JEL classification:

    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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