Do Universities Improve Local Economic Resilience?

82 Pages Posted: 12 Jun 2021

See all articles by Greg Howard

Greg Howard

University of Illinois at Urbana-Champaign

Russell Weinstein

University of Illinois at Urbana-Champaign - School of Labor & Employment Relations; University of Illinois at Urbana-Champaign - Department of Economics

Yuhao Yang

University of Illinois at Urbana-Champaign - Department of Economics

Abstract

We use a novel identification strategy to investigate whether regional universities make their local economies more resilient to adverse economic shocks. Our strategy is based on state governments assigning normal schools (to train teachers) and insane asylums to counties between 1830 and 1930. Normal schools later became much larger regional universities while asylum properties mostly continue as small state-owned psychiatric health facilities. Because site selection criteria were similar for these two types of institutions, comparing counties assigned a normal school versus an insane asylum identifies the effect of a regional university. We find that having a regional university roughly offset the negative effects of exposure to manufacturing declines, and we attribute a significant share of this resilience to the resilience of regional public university spending.

JEL Classification: R10, I23, J20

Suggested Citation

Howard, Greg and Weinstein, Russell and Yang, Yuhao, Do Universities Improve Local Economic Resilience?. IZA Discussion Paper No. 14422, Available at SSRN: https://ssrn.com/abstract=3865447 or http://dx.doi.org/10.2139/ssrn.3865447

Greg Howard (Contact Author)

University of Illinois at Urbana-Champaign ( email )

Russell Weinstein

University of Illinois at Urbana-Champaign - School of Labor & Employment Relations ( email )

504 East Armory Avenue
Champaign, IL 61820-6297
United States

HOME PAGE: http://publish.illinois.edu/RussellWeinstein

University of Illinois at Urbana-Champaign - Department of Economics ( email )

410 David Kinley Hall
1407 W. Gregory
Urbana, IL 61801
United States

HOME PAGE: http://publish.illinois.edu/RussellWeinstein

Yuhao Yang

University of Illinois at Urbana-Champaign - Department of Economics ( email )

410 David Kinley Hall
1407 W. Gregory
Urbana, IL 61801
United States

HOME PAGE: http://https://sites.google.com/illinois.edu/yuhao-yang91/home

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