Helena Persson (Swedish Institute for Social Research, Stockholm University), Hĺkan Regnér

Universities and the local economy: evidence from Swedish employer-employee linked data

This paper investigates the relationship between universities and local economic growth. Drawing on the new growth theory, we expect that firms located close to a university get access to new knowledge and information from education, teachers and researchers and these spillovers affect their ability to grow. In contrast to all previous empirical studies we use administrative employer-employee linked time series data consisting of all establishments in Sweden. The results show that the wave of new universities established in the 1970s did not have any significant effect on the number of start-ups, survival rate of firms, overall local employment rate, local employment growth among university graduates and business structures. Our data are collected from administrative records kept by Statistics Sweden and we have detailed information on every establishment. Therefore the results cannot be due to measurement or aggregation errors. The results can emerge if the new universities provide education with no spillover-effects or if university graduates adding most to employment growth and start-ups, move. Since the last outcome year is 1995, it is also possible that it takes more than 20 years before a university has a significant effect on the local economy.

Keywords: Growth, new establishments, regional education, employer-employee linked data

JEL Codes: 018, 040, R11, I20

Session: 3c   Room 2002   Category: Industry studies 1

Paper