The economic impact of universities: empirical evidence from Turkish provinces

Abstract

Twenty-three new state universities were established in different provinces in Turkey in 1992. This study investigates universities' possible economic impacts on local economies in provinces in Turkey by comparing per capita GDP before and after the establishment of new universities. To do so, we employ difference-in-difference and matching based on entropy balancing to provide robustness against observable and time-invariant unobservable heterogeneity. Using the provincial level data between 1987 and 2000 in Turkey, we find that increases in the number of universities are positively associated with GDP per capita at the province level. Empirical results also show that unemployment rates in provinces fall with the establishment of new universities in Turkey.