The Value of College Graduates to the Scottish Economy

Fraser of Allander Institute, Andrew Ross, Anna Murray, Graeme Roy, James Black, Peter McGregor, Eleanor Malloy

Research output: Other contribution

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Scotland’s colleges are significant economic institutions in their own right. Their activities help support and sustain employment across the communities that they serve. However, the key contribution that colleges make extends well beyond simply how much they spend or invest in the local economy. Colleges play a crucial role in developing Scotland’s growth potential through enhancing human capital – whether that be providing routes from school to work, further training or university; continuous skills-development (often in conjunction with employers); or re-training people for new opportunities. By developing a more productive workforce and boosting participation, colleges help deliver long-term sustainable and inclusive economic growth. Sustainable growth is more important than ever given the new revenue raising responsibilities of the Scottish Parliament. This study undertakes a detailed assessment of the contribution to Scotland's economy from a cohort of college learners over the eight years 2008/09-2015/16. To do this we assess the costs and benefits to the economy from graduates leaving college with a nationally recognised qualification. We use the Fraser of Allander's macroeconomic model of the Scottish economy to provide a robust estimate of the impact on Gross Domestic Product (GDP), employment and tax revenues. For the period 2008/09-2015/16 graduate cohorts we estimate that: The Scottish economy (as measured by GDP) will be better off by over £20 billion in present value terms (i.e. with future benefits discounted) over the long-term. This corresponds to around an additional £55,000 boost to productivity for the Scottish economy per graduate. The present value of the increase in public sector revenues is estimated to be £6.8 billion. Over the years studied, the total costs to the public sector of investing in these learners through nationally-recognised qualifications was approximately £2.4 billion – just 35% of the cumulative tax revenues generated over the long-term. The investment is estimated to support 13,896 full time equivalent (FTE) jobs in present value terms.

The analysis in this report has been conducted by the Fraser of Allander Institute (FAI) at the University of Strathclyde. The report was commissioned by Colleges Scotland. Colleges Scotland asked the FAI to estimate the long-term value to the Scottish economy from graduates of Scotland’s colleges. The technical analysis, methodology and writing of the results was undertaken independently by the FAI, using their detailed macroeconomic model of the Scottish economy to undertake the analysis.
Original languageEnglish
TypeImpact assessment
PublisherUniversity of Strathclyde
Number of pages40
Place of PublicationGlasgow
Publication statusPublished - 30 Sept 2017


  • impact assessment
  • colleges
  • Scotland
  • Scottish economy
  • economic growth strategies
  • productivity management
  • employment


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