Analytical Studies Branch Research Paper Series

11F0019MIE

Volume 2006
Number 283

Do Universities Benefit Local Youth? Evidence from University and College Participation, and Graduate Earnings Following the Creation of a New University

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Do Universities Benefit Local Youth? Evidence from University and College Participation, and Graduate Earnings Following the Creation of a New University

by Marc Frenette

Executive Summary

Previous research suggests that distance to school acts as a barrier to university access. Students from lower income families are particularly sensitive to increased distance, likely because of the added cost associated with having to move away from the home to attend university. One way to bridge this distance gap is to offer university programs in outlying areas, either by building a new university or by offering a wide variety of university programs in an existing college.

The goal of this study is to assess the impact of these new universities on the postsecondary participation and graduate earnings of youth who grew up in the area. The study uses census data from 1981 to 2001 to examine 20 to 24 year-old individuals who, five years earlier, lived in a city that either had a university or did not.

The study finds that the creation of a local degree granting institution is associated with a 28.1% increase in university attendance among youth who grew up in that area. Large increases were registered in each affected city. Students from lower income families saw the largest increase in university participation, likely because pursuing a university degree became more affordable once a local option became available. University participation among local Aboriginal youth, on the other hand, was the same whether a university was available locally or not.

The increase in university participation that was registered among the broad population of youth came at the expense of college participation. Overall, total postsecondary participation only rose moderately as a result of the creation of these new universities. Nevertheless, annual earnings among postsecondary graduates who grew up in the area increased following the creation of the new universities, albeit only for women. Specifically, the presence of a local university is associated with a 9.5% increase in earnings among recent female postsecondary graduates. Among recent male postsecondary graduates, earnings were similar whether a university was available locally or not.

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