California State University Fullerton
VoxEU Column Education Poverty and Income Inequality

Regional universities raise social mobility in their local communities

Increasing social mobility for nearby residents is an important goal for regional public universities in the US. This column uses IRS and Census data on outcomes for children born between 1978 and 1983 to examine the impact of growing up in close proximity to a regional university. The authors find that a university increases the share of children in the county who obtain at least a four-year degree, at least some college, and also the high school graduation rate. It also raises the share of children in the county who are employed in their mid-thirties as well as their income percentiles.

State and federal governments routinely decide how, and how much, to fund higher education.  Annually, governments allocate funding to existing universities, and in some instances build new universities or close existing ones.  Among the reasons governments fund universities are their impact on economic growth, innovation, and social mobility, and these impacts have been the subject of numerous studies (Andrews 2021, Cantoni and Yuchtman 2014, Feng and Valero 2020, Hausmann 2022, Kantor and Whalley 2014, 2019, Valero and Van Reenen 2016, 2019).

Research universities receive considerable scholarly attention. However, there is another sector of US higher education that is extremely policy relevant but has been the focus of less research: regional public universities.  Relative to research universities, these are generally less selective and less research-intensive.  They enroll roughly 40% of undergraduate students in the US. Their central mission has been to increase access to education, and they have been considered “workhorses of opportunity” (Wendler 2018), “colleges of the forgotten Americans (Dunham 1969), and the “backbone of the American higher education system” especially for traditionally underrepresented groups (Fryar 2015).

Regional universities are also more reliant on state funding, and in recent years there have been questions about their financial sustainability (see McClure and Fryar 2020 for examples). At the same time, lawmakers and policy organisations have proposed legislation to increase funding to these organisations as a way to strengthen distressed areas (Maxim and Muro 2021, Maxim et al. 2022). 

Increasing social mobility for nearby residents was, and continues to be, an important goal for these universities. However, there is very limited research showing the causal impact of regional public universities on local economic and social mobility. A challenge in answering this question is that university locations are not random. These universities may have been located in areas with high expected social mobility, even without the university. As a result, simply comparing areas with universities to those without does not provide the causal impact of the institution. 

In our own recent research, we use a novel strategy to show regional public universities have a causal impact on local social mobility (Howard and Weinstein 2022). We use the fact that roughly half of all regional public universities began as normal schools, which were schools to train teachers. To isolate the causal effect of interest, we compare counties that, in the 19th and early 20th centuries, were assigned normal schools versus counties that were assigned insane asylums by their state governments. During this time period, state legislatures were establishing both normal schools and insane asylums as part of the period’s social reform movements. We show legislatures assigned these institutions to counties using very similar criteria, including political factors, geographic accessibility, and natural beauty. By the mid-20th century, normal schools had evolved to become today’s regional public universities, dramatically increasing in size.  Asylums generally are still state-owned psychiatric facilities, and – importantly – remain small in size relative to their county’s population.  

While the counties receiving normal schools looked quite different from all other counties in their state, they looked remarkably similar to the counties that received asylums. Relative to counties with asylums, counties with normal schools have a university today because they had been effectively randomly assigned a normal school instead of an asylum in the 1800s or early 1900s.  We treat the asylum counties as the counterfactual for what would have happened in counties with normal schools, if the normal school had not been converted to a regional public university.  In this way we identify the causal impact of these universities on social mobility.

We use very rich data from Chetty et al. (2018). These data are constructed using IRS and Census data, and contain county-level outcomes of children born between 1978 and 1983 who grew up in the county, by their parents’ income. Importantly, these data contain outcomes of adults based on where they grew up as children, regardless of whether they continue to live in the same county.  This allows us to capture the impact of growing up in close proximity to a regional public university. 

We show regional public universities increase the fraction of children in the county who obtain at least a four-year degree, at least some college, and also the high school graduation rate. The largest relative effects are among children from lower-income families. For those whose parents' income is at the 25th percentile, regional public universities raise the fraction with a four-year college degree by over eight percent.

Figure 1 Effect of a normal school on fraction with at least a four-year college degree, aged 25 and over

Figure 1 Effect of a normal school on fraction with at least a four-year college degree, aged 25 and over

Regional universities also raise the fraction of children in the county who are employed in their mid-thirties as well as their income percentiles, again with effects concentrated among children from lower-income families. For social outcomes, regional public universities increase the fraction of lower-income children in the county who get married and decrease the fraction that live in their childhood commuting zone.

Using an additional dataset (Chetty and Hendren 2018), we see these causal impacts on the county reflect causal impacts on individuals, rather than sorting of high mobility individuals into counties with regional public universities.

These effects do not appear to be explained by universities' impact on the local economy, on K-12 education, or on family characteristics. The mechanism is perhaps the most obvious one: regional public universities increase access to higher education for students in the local area and this increases mobility.

Our findings imply proximity to a university matters for access to higher education and economic mobility. While the relationship between educational attainment and proximity to universities has been shown (e.g. Card 1993, Kling 2001), we focus on identifying a causal relationship, with very rich data and additional outcomes from the IRS and US Census, and focusing on regional public universities, an important and understudied sector.

We see this finding as relevant for policymakers for several reasons.  First, it is relevant for decisions about where new universities will be located, or where to expand existing universities, and discussions of who will be differentially impacted by these institutions. These results complement our previous work showing that regional public universities increase the resilience of their local markets to negative economic shocks, such as manufacturing decline (Howard et al. forthcoming).  Other recent work finds large effects of primarily research-intensive universities on local college attainment (Russell et al. forthcoming).

Second, our results contribute to our understanding of where people should live to improve the economic and social mobility of their children.  Finally, our results suggest the importance of considering why individuals are less likely to attend university if they live farther from their state’s regional university.  Why are they not equally served by private universities in their county? Are they less likely to attend the regional public university because of a desire to remain close to home, or lack of information about the university?  These questions will help identify the potential for policy interventions to address individuals in underserved areas. 


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