They find an insignificant effect for the 2001 recession and a large resiliency effect for the 2008–2009 recession. However, counties with flagship universities faced higher unemployment rates during the 2020 recession, and were therefore less resilient to the COVID-19 recession than other counties. These results support the hypothesis that stable consumption demand for non-tradables drives resiliency, which was absent during the 2020 recession when most university campuses were closed to students due to COVID-19 restrictions.
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Do Research Universities Recession-Proof Their Regions? Evidence from State Flagship College Towns
February 2026
WP 26-08 – Using synthetic differences-in-differences models, the authors study whether U.S. counties containing state flagship universities experienced resiliency via lower unemployment rates during the past three U.S. recessions.
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