How universities make cities greatBloomberg.
Why are colleges so great? To use universities as a tool for economic development, it’s important to think about the many ways they contribute to local growth – and some ways they don’t. Careful research by economists Jaison Abel and Richard Deitz confirms that there’s only a weak relationship between the number of degrees a university produces and the number of educated people who live in the area.
If colleges are paying to educate the future workforces of far-off cities and states, some might think there’s no reason for a city or state to spend money on a local university. But there is a good reason. Even as universities lose graduates to other regions, they attract other smart, educated people. Abel and Deitz find that university research expenditures have a strong effect on the number of educated people in a region – over four times as strong as the effect of degree production. This is partly because skilled workers come to do research at the university itself. But most of the effect comes from private-sector activity in the surrounding economy.
Full report on the Bloomberg site