University Decentralization as Regional Policy: The Swedish Experiment

Roland Andersson, Royal Institute of Technology, Stockholm
John M. Quigley, University of California at Berkeley
Mats Wilhelmsson, Royal Institute of Technology, Stockholm

Abstract

During the past fifteen years, Swedish higher education policy has emphasized the spatial decentralization of post-secondary education. We analyze this policy as a natural experiment, and we investigate the economic effects of this decentralization on productivity and output. We rely upon a twelve-year panel of output, employment and investment for Sweden's 285 municipalities, together with data on the location of university researchers and students, to estimate the effects of exogenous changes in educational policy upon regional development. We find important and significant effects of this policy upon output and productivity, suggesting that the economic effects of the decentralization on regional development are economically important.