Over the last two decades, the number of higher education institutions in low- and middle-income countries has grown rapidly. In this paper we study how the opening of a university affects employment and education outcomes in small cities across Uganda. We find that the first opening of a college or university leads to shifts in employment away from agriculture and toward services. We also find improvements in secondary school completion and literacy among local youth. These patterns suggest that expanding the higher education sector acts as a form of place-based investment that has short-term benefits for nearby communities.
Lallemant et al. (Fri,) studied this question.