Higer Education and Economic Prosperity at Regional Level

Macroeconomic, social, political, regulatory and other factors drive different prospects of economic growth and well-being in different European regions. Higher education institutions (HEI), with their tradition, commitment, progressiveness, continuity and stability are a crucial factor for growth and development. There is empirical evidence of lower unemployment rates in countries with effective communication between the educational system and the labour market that provides for employers’ understanding of competencies (qualities) students have upon finishing their education. Realistic expectations result in better demand and supply matching, thus contributing to regional welfare. As Europe features significant regional disparities in employment, education and economic prosperity, the support for science and technology, including HEIs and their outputs, is crucial for regional development, especially among ‘peripheral’ regions. Furthermore, HEIs must aim at better linking their programmes with employment and the needs for innovation and entrepreneurship. Thus, we estimate how higher education and science relate with economic prosperity in different European regions at NUTS 2 level, classifying them into three groups according to their level of GDP per capita. The regression estimates show different effects of specific factors of HEI influencing regional prosperity levels.