  This paper studies the impact of an university opening on incentives for
human capital accumulation of prospective students in its neighborhood. The
opening causes an exogenous fall on the cost to attend university, through the
decrease in distance, leading to an incentive to increase effort - shown by the
positive effect on students' grades. I use an event study approach with two-way
fixed effects to retrieve a causal estimate, exploiting the variation across
groups of students that receive treatment at different times - mitigating the
bias created by the decision of governments on the location of new
universities. Results show an average increase of $0.038$ standard deviations
in test grades, for the municipality where the university was established, and
are robust to a series of potential problems, including some of the usual
concerns in event study models.
