Some Economic Consequences of Higher Education Expansion in Turkey

This article discusses recent structural changes in Turkish higher education to draw attention to a number of social and economic consequences of this expansion in terms of mobility and inequality over the last ten years. First, we outline the institutional background of the expansion of higher education in order to identify various re-distributive dimensions of the policy. Compared to 2004, creating new universities and increasing the existing capacity almost doubled the college enrollment rates. Subsidies facilitating more education grants and fee waivers were followed by heavy investment in public student accommodation. This policy was initiated as a political move targeting regional development, taking on a redistributive character by reorienting public funds toward poorer eastern regions. In this paper, we limit our focus to the impacts of these policies on the local labor market. By using household labor force surveys between 2004 and 2014, firstly, we explored how college proximity had an effect on access to college for the local families. Our results from a difference-in-difference model provide evidence that this policy had an equity-enhancing effect for daughters of low-educated families in some regions with largescale expansion. The results also indicate that the regional mobility of educated workers may be slowed by this expansion. Secondly, we investigated whether the compositional change has affected local returns to college degrees and relative convergence across regions. Estimation results show that despite the increase in college graduates, returns in terms of wages at the local level are increasing and that some regional convergence was attained.