The system-wide impacts of the social and private market benefits of higher education on the Scottish economy: an illustrative "micro-to-macro" approach

Kristinn Hermannsson, Katerina Lisenkova, Peter McGregor, John Swales

Research output: Contribution to conferencePaper

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.

Conference

ConferenceEuropean Regional Science Association Conference
CountrySweden
CityJonkoping
Period19/08/1023/08/10

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

  • system-wide impacts
  • social
  • private
  • market benefits
  • higher education
  • Scottish economy
  • social and external benefits
  • crime
  • supply side impact
  • higher education institutions
  • computable general equilibrium model

Cite this

Hermannsson, K., Lisenkova, K., McGregor, P., & Swales, J. (2010). The system-wide impacts of the social and private market benefits of higher education on the Scottish economy: an illustrative "micro-to-macro" approach. Paper presented at European Regional Science Association Conference, Jonkoping, Sweden.
Hermannsson, Kristinn ; Lisenkova, Katerina ; McGregor, Peter ; Swales, John. / The system-wide impacts of the social and private market benefits of higher education on the Scottish economy : an illustrative "micro-to-macro" approach. Paper presented at European Regional Science Association Conference, Jonkoping, Sweden.
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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.",
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Hermannsson, K, Lisenkova, K, McGregor, P & Swales, J 2010, 'The system-wide impacts of the social and private market benefits of higher education on the Scottish economy: an illustrative "micro-to-macro" approach' Paper presented at European Regional Science Association Conference, Jonkoping, Sweden, 19/08/10 - 23/08/10, .

The system-wide impacts of the social and private market benefits of higher education on the Scottish economy : an illustrative "micro-to-macro" approach. / Hermannsson, Kristinn; Lisenkova, Katerina; McGregor, Peter; Swales, John.

2010. Paper presented at European Regional Science Association Conference, Jonkoping, Sweden.

Research output: Contribution to conferencePaper

TY - CONF

T1 - The system-wide impacts of the social and private market benefits of higher education on the Scottish economy

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

AU - Hermannsson, Kristinn

AU - Lisenkova, Katerina

AU - McGregor, Peter

AU - Swales, John

N1 - This was one of many co-authored papers presented at this conference.

PY - 2010

Y1 - 2010

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 - system-wide impacts

KW - social

KW - private

KW - market benefits

KW - higher education

KW - Scottish economy

KW - social and external benefits

KW - crime

KW - supply side impact

KW - higher education institutions

KW - computable general equilibrium model

M3 - Paper

ER -

Hermannsson K, Lisenkova K, McGregor P, Swales J. The system-wide impacts of the social and private market benefits of higher education on the Scottish economy: an illustrative "micro-to-macro" approach. 2010. Paper presented at European Regional Science Association Conference, Jonkoping, Sweden.