The regional impacts of Icelandic universities

Abstract

Higher education is an important aspect of regional development. To some extent the prevalence of university education reflects the strength and diversity of local labour markets, but human capital also strengthens and diversifies local communities and attracts investments. Conversely, regions characterised by lack of human capital, predominantly low skilled jobs and limited public and private services face considerably difficulties in retaining or recruiting people with higher education crucial for regional regeneration in the modern world. In many countries regional universities have been established to break this vicious circle. Such regional universities have various positive effects on the local economy. They create a wide range of jobs and draw specialised employees to the region. Universities may also stimulate research and development and support innovation and entrepreneurship in the local economy. More generally, universities and in particular university students contribute to social and cultural diversity that may draw people and enterprises to the region. More directly, regional universities increase human capital by producing and retaining university graduates. Distance to university affects plans for attending university and actual university registration, especially among young people of lower socio-economic background. Less than half the students who attend university elsewhere typically return to their home regions. While universities may educate students for jobs that are not available in their home communities, the majority of local graduates remain in their region of origin. Furthermore, students from other regions frequently settle in the area of the university, partly explaining the frequently observed association between regional educational levels and regional population growth. The impact of regional universities, nevertheless, tends to be highly localised and there is some evidence of brain drain from other parts of their regions. In recent years the potential of distance education for educating people in their home communities has attracted considerable attention. Distance education clearly increases university enrolment in communities beyond commuting distance from a university. It is less clear, however, to what extent distance education at the university level increases human capital in disadvantaged communities and how far it contributes to out-migration by providing education for jobs that are not available in the community. For centuries the few Icelandic university students mostly attended the University of Copenhagen. The establishment of the University of Iceland in 1911 was explicitly intended to contribute to nation building through scholarship and the local production of university graduates. It also became a crucial element in the dominance of Reykjavík as the intellectual, economic and cultural centre of Iceland in the early 20th century. Higher education could only be pursued in Reykjavík until the late 1980s when the first regional universities were established. In the early 21st century, distance education became a dominant aspect of universities outside the capital region and has also, to some extent, been offered by the universities in Reykjavík. While this decentralization of higher education has been assumed to decrease regional differences in levels of university education, the prevalence of university degrees in the capital region is almost double that of other regions of the country. The objective of this study is to map the regional origins of students at different universities in Iceland and assess the regional impacts of different institutions. In particular, we will attempt to disentangle the effects of the physical location of universities and the prevalence of distance education at each institution. The study is based on information about graduates from the University of Iceland, Bifröst University in West Iceland, Hólar University College in Northwest Iceland and the University of Akureyri in central North Iceland in the period 1991–2015. Additional information on the domicile of each student five years prior to graduation and five years after graduation was obtained from Statistics Iceland and used to assess the origins and destinations of university graduates. Icelandic universities tend to draw students disproportionately from their regions, but the University of Iceland is nevertheless the most important source of higher education for young people in all parts of the country. About 84% of capital region graduates from the University of Iceland, 69% of Akureyri graduates from the University of Akureyri and 51% of local graduates from Bifröst University are still living in their home communities five years after graduation. In most regions 25–38% of on-site graduates return after graduating from a distant university, whereas 77–89% of distance education graduates continue to live in their home communities. Controlling for other factors, distance students have similar odds of living in their home community as on-site local students at the University of Akureyri and more than twice the odds of on-site students graduating from a distant university.