Higher Education Supply, Neighbourhood Effects and Economic Welfare

58 Pages Posted: 21 Feb 2019

See all articles by Elena Cottini

Elena Cottini

Catholic University of the Sacred Heart of Milan; Aarhus University - School of Business and Social Sciences

Paolo Ghinetti

University of Piemonte Orientale - Department of Economics and Business Studies; Catholic University of the Sacred Heart of Milan - Graduate School in Public Economics (DEFAP)

Simone Moriconi

Catholic University of the Sacred Heart of Milan

Date Written: 2019

Abstract

This paper uses an own built dataset on the history of universities in Italy during 1861-2010 to estimate neighbourhood effects in the local supply of higher education, and incorporate them in a welfare analysis. We implement an instrumental variables approach that exploits initial conditions in the pre-unitarian Italian states, interacted with post-unification university reforms. We provide robust evidence of local displacement between higher education supply in neighbouring provinces. These effects are mostly concentrated within the same field of study, the same region, and a spatial reach of 90 Km. We show that accounting for these displacement forces is important to evaluate the local economic returns related to higher education supply. On average, this explains more than 4% of local value added per capita. Economic returns are very localised, and larger in provinces that host university hubs.

Keywords: neighbourhood effects, higher education supply, historical data, initial conditions, economic welfare

JEL Classification: I230, I280, N000, R100

Suggested Citation

Cottini, Elena and Ghinetti, Paolo and Moriconi, Simone, Higher Education Supply, Neighbourhood Effects and Economic Welfare (2019). CESifo Working Paper No. 7483. Available at SSRN: https://ssrn.com/abstract=3338838

Elena Cottini (Contact Author)

Catholic University of the Sacred Heart of Milan ( email )

Largo Gemelli, 1
Via Necchi 9
Milan, MI 20123
Italy

Aarhus University - School of Business and Social Sciences ( email )

Nordre Ringgade 1
Aarhus C, DK-8000
Denmark

Paolo Ghinetti

University of Piemonte Orientale - Department of Economics and Business Studies ( email )

via E. Perrone 18
Novara, Novara 28100
Italy

Catholic University of the Sacred Heart of Milan - Graduate School in Public Economics (DEFAP) ( email )

Italy

Simone Moriconi

Catholic University of the Sacred Heart of Milan ( email )

Largo Gemelli, 1
Via Necchi 9
Milan, MI 20123
Italy

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