The Wage Return to Graduate in Italian Small-town Universities

In this paper we use a representative sample drawn from the `Indagine Statistica sull’ Inserimento Professionale dei Laureati’ by the Italian National Statistical Institute and data from the Italian Ministry of Education to look at the wage premium of graduates from a regional university (i.e. not located in a metropolitan area) relative to graduates from a non-regional university, three years after graduation. Our results show that, after accounting for observed characteristics of individuals and universities, a wage premium is associated with a degree from a regional university. This finding may be interpreted as showing that regional universities enhance the local human capital stock or create specifi c skills needed by the local economic environment.