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The effect of polytechnic reform on migration


This paper examines the effect of the polytechnic reform on geographical mobility. A polytechnic, higher education reform took place in Finland in the 1990s. It gradually transformed former vocational colleges into polytechnics and also brought higher education to regions that did not have a university before. This expansion of higher education provides exogenous variation in the regional supply of higher education. The reform raised the mobility of high school graduates across local labour markets in the years after they had completed their secondary studies, which indicated increased mobility between high school and post-secondary education. We estimate that the reform enhanced the annual migration rate of high school graduates by 1.2 percentage points over a 3-year follow-up period. This represents a substantial increase, because their baseline migration rate is 3.7 %. The effect fades several years after the completion of secondary studies.

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  1. For a further discussion of the brain drain, see Yousefi and Rives (1987) and Gottlieb and Joseph (2006).

  2. The description of the higher education system and the polytechnic education reform is based on Böckerman et al. (2009, p. 673–675).

  3. The Finnish university sector consists of 20 universities and art academies, all of which carry out research and provide degrees up to doctorates. For further details on the university sector, see, e.g. Ministry of Education (2005).

  4. The reform changed the curriculum to a different extent in different fields (Böckerman et al. 2009, p. 675). The changes were relatively minor in engineering and nursing education but substantial in business education. The average length of the studies in business education increased from 2 to 3.5 years.

  5. The number of applications to universities and to the most popular polytechnics exceeds the number of available starting places by a factor of 4.

  6. Their preferred estimates show that 29 % of the increase in the earnings of polytechnic graduates is due to an increase in human capital and the remaining 71 % is because of the signalling value (Hämäläinen and Uusitalo 2008, p. 773).

  7. See also the reviews by Greenwood (1975, 1997). Finnish migration has been studied recently by Ritsilä and Ovaskainen (2001), Pekkala and Tervo (2002), Ritsilä and Haapanen (2003), Hämäläinen and Böckerman (2004), Nivalainen (2004), Haapanen and Ritsilä (2007), Jauhiainen (2008) and Haapanen and Tervo (2012). However, none of these studies have used education reforms to examine migration patterns.

  8. Instead of estimating the effect of education on migration using the reform as an instrument, we estimate the reduced-form specifications of the polytechnic reform on migration.

  9. Those individuals living in the Åland Islands are not included in the sample. Åland is a small isolated region with approximately 26,000 inhabitants. It differs from the other Finnish regions in numerous ways (e.g. most of the inhabitants speak Swedish as their native language).

  10. As in Hickman (2009) and Malamud and Wozniak (2012), but contrary to Machin et al. (2012), we focus on individuals at the upper part of the education distribution.

  11. For example, in 2001, approximately 99 % (83) of the high school graduates were 18–21 years old (19 years old) at the end of their matriculation year.

  12. The small region of Itä-Uusimaa is combined with Uusimaa in the analyses, because of their close proximity and similarity. It is also the only region that does not currently have its own polytechnic.

  13. We observe an individual’s location at the end of each year.

  14. See Tenn (2010) and Rabe (2011) for recent evidence on the migration decisions of families.

  15. The matriculation examination is a national compulsory final exam taken by all students who graduate from high school. The answers in each test are first graded by teachers and then reviewed by associate members of the Matriculation Examination Board outside the schools. The exam scores are standardised so that their distribution is the same every year. The range of the matriculation exam scores is 1–6.

  16. On average, universities tend to be located further away from high school graduates than lower level educational institutions.

  17. Because of the low number of observations, a single duration dummy is used for t > 10.

  18. The university sector remained unchanged during the polytechnic education reform. Therefore, new universities were not created during the period of analysis.

  19. The average marginal effects were computed as averages over all observations, as discussed in Cameron and Trivedi (2005, p. 467).

  20. But the two-way clustering of standard errors is best suited for settings in which both clustering variables have a large number of clusters (Cameron et al. 2011). In our application, there are only 11 annual observations (and 18 NUTS3 regions). For this reason, the baseline estimates are reported with one-way robust standard errors clustered on matriculation-year-by-region cells.

  21. Note that the larger estimate also reflects the fact that in panel J (and K), the matriculated are, on average, followed over a shorter period of time than in the baseline estimate above.

  22. In terms of land area, the Finnish NUTS2 regions are larger compared to the EU average and smaller compared to the US states: the Finnish average is 60,895 km2, the EU average is 15,869 km2 and the US state average is 183,637 km2. In 2010, population density was 18 inhabitants per km2 in Finland, 117 in the EU and 35 in the USA. Sources: Eurostat (2007, 2011) and US Census Bureau (2012).


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We would like to thank an anonymous referee, Thomas Crossley, Tomi Kyyrä, Olli Ropponen and seminar participants at the EALE 2011 Congress in Cyprus, the ERSA 2010 Congress in Jönköping, the Annual Meeting of the Finnish Economic Association in Oulu (2011) and the Economics of Education Workshop in Helsinki (2012) for very useful comments. Haapanen also gratefully acknowledges financial support from the Yrjö Jahnsson Foundation for a visit to the University of Cambridge, the Faculty of Economics, in the academic year 2009–2010 (project no. 6039). This study also forms part of a project supported by the Academy of Finland (project no. 127049). Paul A. Dillingham has kindly checked the English language.

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Correspondence to Mika Haapanen.

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Table 8 Description of covariates and their mean values for the two samples
Fig. 4
figure 4

Regional differences in the propensity to move over a 3-year period (i.e. migrated during the year of matriculation or the following 2 years). Note: Itä-Uusimaa is merged with Uusimaa in the analysis. NUTS3 regions with a university have been renamed after the largest municipality. Source: own sample data

Fig. 5
figure 5

The estimated short-run and long-run average marginal effect of the polytechnic reform on the probability to move by NUTS3 matriculation region. Note: Average marginal effects are based on the interaction of supply of polytechnic education with the matriculation region dummies. The same controls are used as in the last specification of Tables 2 and 3. See also Table 6 and notes to Table 5. Underlining of the name of the region indicates significance at the 10 % level

Fig. 6
figure 6

The estimated short-run and long-run average marginal effect of the polytechnic reform on the probability to reside in the region of matriculation by NUTS3 matriculation region. Note: Average marginal effects are based on the interaction of supply of polytechnic education with the matriculation region dummies. The same controls are used as in the last specification of Tables 2 and 3. See also Table 7 and notes to Table 5. Underlining of the name of the region indicates significance at the 10 % level

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Böckerman, P., Haapanen, M. The effect of polytechnic reform on migration. J Popul Econ 26, 593–617 (2013).

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  • Migration
  • School reform
  • High school graduates
  • Vocational education
  • Polytechnic education

JEL Classification

  • J10
  • J61
  • I20
  • R23