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

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.

Julkaisun tiedot

Suhonen, T. (2013), Are there returns from university location in a state-funded university system? Regional Science and Urban Economics, 43(3): 465–478.

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