How universities boost economic growth

a paper by Anna Valero (research economist in CEP’s growth programme) and John Van Reenen (professor of economics at MIT and formerly director of CEP) published in CentrePiece Volume 21 Issue 3 (Winter 2016) Paper No CEPCP488

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.

JEL Classification: I23, I25, J24, O10, O31

Full paper

This paper summarises The Economic Impact of Universities: Evidence from Across the Globe by Anna Valero and John Van Reenen, CEP Discussion Paper No. 1444, August 2016

Full text (PDF 83pp)

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