The system-wide impacts of the external benefits to higher education on the Scottish economy: an exploratory "micro-to-macro" approach

Kristinn Hermannsson, Katerina Lisenkova, Patrizio Lecca, Peter McGregor, Kim Swales

Research output: Book/ReportCommissioned report

Abstract

The private market benefits of education, i.e. the wage premia of graduates, are widely studied at the micro level, although the magnitude of their macroeconomic impact is disputed. However, there are additional benefits of education, which are less well understood but could potentially drive significant macroeconomic impacts. Following the taxonomy of McMahon (2009) we identify four different types of benefits of education. These are: private market benefits (wage premia); private non market benefits (own health, happiness, etc.); external market benefits (productivity spillovers; and external non-market benefits (crime rates, civic society, democratisation, etc.). Drawing on available microeconometric evidence we use a micro-to-macro simulation approach (Hermannsson et al, 2010) to estimate the macroeconomic impacts of external benefits of higher education. We explore four cases: technology spillovers from HEIs; productivity spillovers from more skilled workers in the labour market; reduction in property crime; and the potential overall impact of external and private non-market benefits. Our results suggest that the external economic benefits of higher education could potentially be very large. However, given the dearth of microeconomic evidence this result should be seen as tentative. Our aim is to illustrate the links from education to the wider economy in principle and encourage further research in the field.
LanguageEnglish
Place of PublicationGlasgow
Publication statusPublished - 2012

Publication series

NameWorking Papers

Fingerprint

Education
Macroeconomic impacts
Wages
Productivity spillovers
Democratization
Taxonomy
Skilled workers
Simulation
Health benefits
Labour market
Crime rates
Economic benefits
Microeconometrics
Crime
Microeconomics
Technology spillovers
Happiness

Keywords

  • supply side impact
  • higher education institutions
  • computable general equilibrium model

Cite this

Hermannsson, Kristinn ; Lisenkova, Katerina ; Lecca, Patrizio ; McGregor, Peter ; Swales, Kim. / The system-wide impacts of the external benefits to higher education on the Scottish economy : an exploratory "micro-to-macro" approach. Glasgow, 2012. (Working Papers).
@book{80c220e381d14034825562801723a275,
title = "The system-wide impacts of the external benefits to higher education on the Scottish economy: an exploratory {"}micro-to-macro{"} approach",
abstract = "The private market benefits of education, i.e. the wage premia of graduates, are widely studied at the micro level, although the magnitude of their macroeconomic impact is disputed. However, there are additional benefits of education, which are less well understood but could potentially drive significant macroeconomic impacts. Following the taxonomy of McMahon (2009) we identify four different types of benefits of education. These are: private market benefits (wage premia); private non market benefits (own health, happiness, etc.); external market benefits (productivity spillovers; and external non-market benefits (crime rates, civic society, democratisation, etc.). Drawing on available microeconometric evidence we use a micro-to-macro simulation approach (Hermannsson et al, 2010) to estimate the macroeconomic impacts of external benefits of higher education. We explore four cases: technology spillovers from HEIs; productivity spillovers from more skilled workers in the labour market; reduction in property crime; and the potential overall impact of external and private non-market benefits. Our results suggest that the external economic benefits of higher education could potentially be very large. However, given the dearth of microeconomic evidence this result should be seen as tentative. Our aim is to illustrate the links from education to the wider economy in principle and encourage further research in the field.",
keywords = "supply side impact, higher education institutions, computable general equilibrium model",
author = "Kristinn Hermannsson and Katerina Lisenkova and Patrizio Lecca and Peter McGregor and Kim Swales",
year = "2012",
language = "English",
series = "Working Papers",

}

The system-wide impacts of the external benefits to higher education on the Scottish economy : an exploratory "micro-to-macro" approach. / Hermannsson, Kristinn; Lisenkova, Katerina; Lecca, Patrizio; McGregor, Peter; Swales, Kim.

Glasgow, 2012. (Working Papers).

Research output: Book/ReportCommissioned report

TY - BOOK

T1 - The system-wide impacts of the external benefits to higher education on the Scottish economy

T2 - an exploratory "micro-to-macro" approach

AU - Hermannsson, Kristinn

AU - Lisenkova, Katerina

AU - Lecca, Patrizio

AU - McGregor, Peter

AU - Swales, Kim

PY - 2012

Y1 - 2012

N2 - The private market benefits of education, i.e. the wage premia of graduates, are widely studied at the micro level, although the magnitude of their macroeconomic impact is disputed. However, there are additional benefits of education, which are less well understood but could potentially drive significant macroeconomic impacts. Following the taxonomy of McMahon (2009) we identify four different types of benefits of education. These are: private market benefits (wage premia); private non market benefits (own health, happiness, etc.); external market benefits (productivity spillovers; and external non-market benefits (crime rates, civic society, democratisation, etc.). Drawing on available microeconometric evidence we use a micro-to-macro simulation approach (Hermannsson et al, 2010) to estimate the macroeconomic impacts of external benefits of higher education. We explore four cases: technology spillovers from HEIs; productivity spillovers from more skilled workers in the labour market; reduction in property crime; and the potential overall impact of external and private non-market benefits. Our results suggest that the external economic benefits of higher education could potentially be very large. However, given the dearth of microeconomic evidence this result should be seen as tentative. Our aim is to illustrate the links from education to the wider economy in principle and encourage further research in the field.

AB - The private market benefits of education, i.e. the wage premia of graduates, are widely studied at the micro level, although the magnitude of their macroeconomic impact is disputed. However, there are additional benefits of education, which are less well understood but could potentially drive significant macroeconomic impacts. Following the taxonomy of McMahon (2009) we identify four different types of benefits of education. These are: private market benefits (wage premia); private non market benefits (own health, happiness, etc.); external market benefits (productivity spillovers; and external non-market benefits (crime rates, civic society, democratisation, etc.). Drawing on available microeconometric evidence we use a micro-to-macro simulation approach (Hermannsson et al, 2010) to estimate the macroeconomic impacts of external benefits of higher education. We explore four cases: technology spillovers from HEIs; productivity spillovers from more skilled workers in the labour market; reduction in property crime; and the potential overall impact of external and private non-market benefits. Our results suggest that the external economic benefits of higher education could potentially be very large. However, given the dearth of microeconomic evidence this result should be seen as tentative. Our aim is to illustrate the links from education to the wider economy in principle and encourage further research in the field.

KW - supply side impact

KW - higher education institutions

KW - computable general equilibrium model

M3 - Commissioned report

T3 - Working Papers

BT - The system-wide impacts of the external benefits to higher education on the Scottish economy

CY - Glasgow

ER -