The paper analyzes the effect of NURI(New University for RegionalInnovation) project by using difference-in-differences model. The key issue ishow the differentials of the labor market performance between universitygraduates supported by NURI project and those not supported by this projecthas been changed, from 2005 when NURI project did not start to 2010 whenthis project impacted on all local university students. The results show thatNURI project improved the satisfaction of students’ education, increased theemployment rate of graduates in case of large-scale project, and had a positiveeffect of improving job satisfaction in the early stages of work. However, thereis no evidence that this project had a statistically significant effect on thequality of employment, even if any indicators were analyzed. In addition, therewas no significant change in the tendency to remain in the labor market ofhis/her university area. The goal of NURI project was to create a virtuouscircle in which local universities nurture high-quality human resources to leadlocal development and attract talented high school graduates to attend localuniversities. The empirical results of the paper reveal that the NURI project atthat time was not successful in achieving this goal.