Taxpayers are asking some reasonable questions about what they are actually funding at public universities.Â Â Tomorrow, I will attend a UCLA men’s basketball home game.Â I thank the taxpayers for subsidizing the game ball.Â The professors hope that the good times will continue. Some evidence documenting our social benefits might help our cause.Â Â The Chronicle of Higher Education offers a clear case study ofÂ North Carolina’s Research TriangleÂ .Â Â Â Â Sweden also offers a neat natural experiment.Â John Quigley Â and co-authors document that universities offer significant local spillover benefits.Â Â Universities alsoÂ may solve a Schelling co-ordination problem. The educated want to live near each other.Â Knowing that graduates live near excellent universities after planting roots, other graduatesÂ may agglomerate there.Â Â Firms who seek out skilled workers will also locate there and the city flourishes.Â Â Enrico MorettiÂ Â documents that wages are higher in cities with high levels of average “human capital”. This is likely to be due to learning and external productivity effects.
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