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Transcript of The Economic Impacts of Higher Education Institutions on Scotland: An Input-Output Analysis K....
The Economic Impacts of Higher Education Institutions on Scotland: An Input-Output Analysis
K. Hermannsson, P. McGregor, N. Pappas and K. SwalesFraser of Allander Institute,
Department of Economics, University of Strathclydeand CPPR
48th Congress of the European Regional Science Association
Liverpool, England, August 27-31, 2008
Outline
• Background
• Augmentations of the Scottish IO tables
• Simulation approach
• Simulation results
• Future work
Background
• Part of an ESRC initiative with additional support from the Funding Councils
• Our project:– Model the impacts of HEIs at a regional and
national level– Use multi-sectoral regional and inter-regional
models– I-O, SAM and CGE
Scottish Input-Output Analysis
• Separately identify HEI sector from 2004 Scottish IO accounts :– Instructive as a set of accounts– Basis for all other multi-sectoral modelling– Perform conventional demand-driven analysis
• Disaggregate the Scottish IO sector into the component institutions.
HEI inputs: disaggregating the column
• Gross output• Purchases of all inputs
– Domestic intermediate– Imports– Taxes – Wages – Other value added (rents and profits)
Overview of Scottish HEIs (1)Total Income (£ m)
Wages (£m)
Student numbers
Staff numbers
Wages/ expenditure
Output per staff (£)
Output per student (£)
Edinburgh 436 239 23,715 6,100 56%71,40
5 18,367
The University of Glasgow 312 193 23,590 4,820 62%64,80
7 13,242
Strathclyde 191 113 25,105 2,973 61%64,27
4 7,610
Dundee 164 101 18,610 2,810 60%58,35
3 8,811
Aberdeen 157 98 13,760 2,570 61%61,08
3 11,409
St Andrews 109 65 8,645 1,888 61%57,62
2 12,581
Heriot-Watt University 100 57 10,225 1,465 58%67,94
9 9,735
Caledonian 98 63 17,045 1,613 65%60,55
4 5,729
Stirling 84 50 8,940 1,683 61%49,72
5 9,358
Napier University 81 49 14,850 1,368 67%59,48
9 5,478
Totals for the year 2005/2006 Source: HESA
Overview of Scottish HEIs (2)Total Inco
me (£ m)
Wages
(£m)
Student
numbers
Staff numbe
rs
Wages/ expenditu
re
Output per staff (£)
Output per
student (£)
The RG University 75 45 12,790 1,295 59% 57,980 5,871
The University of Paisley 58 35 13,040 995 62% 58,775 4,485
Scottish Agricultural College 44 26 770 848 59% 51,515 56,700
UHI Millennium Institute 35 3 6,600 90 10%392,94
4 5,358
Abertay 32 19 4,125 550 59% 59,009 7,868
QMUC, Edinburgh 28 17 5,410 430 64% 64,116 5,096
Bell College 20 14 4,720 423 71% 47,157 4,221
Glasgow School of Art 16 10 1,555 255 64% 61,957 10,160
Edinburgh College of Art 15 10 1,705 263 66% 56,027 8,626
The RSAMD 10 6 680 145 63% 71,572 15,262
Totals for the year 2005/2006 Source: HESA
Log Income
HEI outputs: disaggregating the row
• Value of sales:– domestic intermediate demand– household consumption– NPISH– RUK exports– ROW exports– (investment, stocks, government)
Income and exports
Income by sourceExports / output
Funding Council grants
Research
grants
Tuition fees
& education
grantsOther
income
Endowment &
investment income
RUK expor
tsROW
Exports
Aberdeen 40% 28% 17% 13% 1% 12% 22%
Abertay 56% 4% 20% 18% 1% 4% 20%
Bell College 50% 1% 39% 11% 0% 1% 10%
Dundee 37% 26% 20% 17% 0% 12% 19%
Edinburgh College of Art 60% 3% 26% 10% 2% 1% 21%
Edinburgh University 34% 26% 15% 22% 3% 14% 24%
Caledonian University 54% 4% 24% 18% 0% 4% 18%
Glasgow School of Art 63% 4% 23% 9% 1% 2% 18%
Glasgow University 42% 24% 17% 15% 2% 13% 18%
Heriot-Watt University 36% 15% 29% 20% 1% 8% 30%
Totals for the year 2005/2006 Source: HESA
Income and exports (2)
Income by sourceExports / output
Funding Council grants
Research
grants
Tuition fees
& education
grantsOther
income
Endowment &
investment income
RUK expor
tsROW
Exports
Napier University 50% 3% 33% 14% 1% 3% 20%
The University of Paisley 55% 3% 30% 11% 1% 2% 15%
QMUC, Edinburgh 49% 11% 27% 11% 1% 6% 18%
The RG University 42% 4% 36% 15% 3% 4% 23%
The RSAMD 59% 1% 22% 14% 4% 1% 19%
St Andrews University 32% 26% 23% 18% 2% 13% 31%
Scottish Agricultural College 45% 17% 5% 32% 0% 9% 28%
The University of Stirling 38% 11% 24% 26% 1% 7% 27%
The University of Strathclyde 45% 15% 27% 11% 2% 8% 19%
UHI Millennium Institute 57% 22% 12% 9% 0% 12% 7%
Totals for the year 2005/2006 Source: HESA
Income by source (1)
£ m, %Scottish Government
External Income
Operational Income Total
Edinburgh 181 42% 143 33% 111 26% 436
Glasgow 163 52% 93 30% 57 18% 312
Strathclyde 112 59% 46 24% 34 18% 191
Dundee 84 51% 51 31% 29 18% 164
Aberdeen 79 50% 54 35% 24 15% 157
St Andrews 43 40% 42 39% 23 21% 109
Heriott Watt 51 51% 27 27% 22 22% 100
Caledonian 72 74% 8 8% 17 18% 98
Stirling 46 55% 14 17% 24 28% 84
Napier 59 73% 10 12% 13 15% 81
Income by source (2)
£ m, %Scottish Government External Income
Operational Income Total
Robert Gordon 49 65% 12 15% 15 19% 75
Paisley 47 80% 4 7% 8 13% 58
Scot Agr College 21 48% 8 17% 15 35% 44
UHI 24 68% 8 22% 3 10% 35
Abertay 22 69% 4 11% 6 20% 32
Queen Margaret 19 68% 5 20% 3 12% 28
Bell College 17 88% 0 1% 2 11% 20
GSA 12 75% 2 13% 2 12% 16
Edinburgh Art 11 73% 2 14% 2 13% 15
RSAMD 7 68% 1 7% 3 25% 10
Total Scotland 1,119,051 54% 533,116 26% 412,169 20% 2,064,336
Student expenditure
• Demand category: – Household expenditure (domestic students)– Tourism expenditure? (RUK and ROW
students)
• Information:– Total, RUK and ROW students– UK data on size and distribution of purchases– IO household consumption data for imports
Demand driven analysisSubject of study Multiplier value
Geographic boundary
St. Andrews University (Blake & McDowall, 1967) 1.45 (GDP)
St. Andrews (pop. 10,000)
Stirling University (Brownrigg, 1973) 1.24 - 1.54
Parts of Sterling and Perth(pop. 96,000)
Strathlcyde, Stirling and St. Andrews Universities(Love & McNicholl, 1988)
1.34, 1.43, 1.36(student spending) Scotland
Aberdeen, Dundee and Stirling Universities(Love & McNicoll, 1990)
2.18 (output), 1.75 (GDP),1.95 (employment) Scotland
Aberdeen University (Battu et al, 1998)1.46 (spending),1.61 (employment) North East of Scotland
Strathclyde University (Kelly et al, 2004)1.63 (output), 1.38 (employment) Scotland
Strathclyde University (McNicholl, 1993) 2.15 (output), 1.66 (income) Scotland
Scottish HEIs (1) 19951.76 (output), 1.7 (employment) Scotland
Scottish HEIs (2) 19991.73 (output), 1.42 (employment) Scotland
Scottish HEIs (3) 20041.6 (output), 1.4 (employment) Scotland
• Assumptions of demand driven IO– No supply constraints– No price effects– Linear homogenous production and demand
functions
Demand driven analysis
Hypothetical Extraction
• Hypothetical extraction of individual Scottish HEIs.– Sector is replaced by imports
• Expenditure impacts of RUK and ROW students.– These students lost to Scotland
GDP of Scottish HEIs
University Impacts
Student Expenditure
Total impact of HEI
Edinburgh 509.4 102.8 612.2
The University of Glasgow 381.6 102.2 483.8
Strathclyde 229.4 108.8 338.2
Dundee 199.9 80.6 280.5
Aberdeen 192.2 59.6 251.9
St Andrews 131.5 37.5 169.0
Caledonian 121.2 73.9 195.1
Heriot-Watt University 118.1 44.3 162.4
Stirling 100.9 38.7 139.6
Napier University 98.4 64.3 162.7
GDP of Scottish HEIs
University Impacts
Student Expenditure
Total impact of HEI
The RG University 90.5 55.4 145.9
The University of Paisley 70.6 56.5 127.1
Scottish Agricultural College 52.3 3.3 55.6
Abertay 38.9 17.9 56.8
QMUC, Edinburgh 33.9 23.4 57.3
UHI Millennium Institute 29.4 28.6 58.0
Bell College 25.5 20.5 46.0
Glasgow School of Art 19.7 6.7 26.4
Edinburgh College of Art 18.3 7.4 25.7
The RSAMD 12.7 2.9 15.6
Total Scotland 2,474 935 3,410
Multiplier impacts
• Aggregate multiplier effects of £100 million spent on HEIs (in general): output, GDP, employment, output multiplier, employment multiplier– Without offsetting reduction in government
expenditure– With offsetting reduction.
Impacts disaggregated by sector (1)GDP Impact of a £100m Increase in HEI Spending (£m)
-100 -50 0 50 100 150
HEIs
Primary & Manufacturing
Utilities
Construction
Distribution & Retail
Hotels, Catering, Transport & Telecom
Real estate, Finance & Business Services
Other Services
Public Admin & Education
Net impact
Se
cto
rs
GDP Impact (£m)
With Spending Substitution
Without Spending Substitution
Impacts disaggregated by sector (2)Effect on Employment of a £100m Increase in HEI Spending
-3000 -2000 -1000 0 1000 2000 3000 4000
HEIs
Primary & Manufacturing
Utilities
Construction
Distribution & Retail
Hotels, Catering, Transport & Telecom
Real estate, Finance & Business Services
Other Services
Public Admin & Education
Net impact
Se
cto
r
Employment (positions)
With Spending Substitution
Without Spending Substitution
Impact of HEIs external income (1)
• 26% of HEIs income external to Scotland– RUK & ROW research funding– Ex-EU tuition fees– 2002: £ 399 m– 2006: £ 533 m– ↑ 34%
Impact of HEIs external income (2)
External income (£m)
GDP impact (£m)
Employment impact
The University of Edinburgh 143.0 172.8 4,284
The University of Glasgow 92.8 112.2 2,780
The University of Aberdeen 54.2 65.5 1,623
The University of Dundee 50.9 61.5 1,524
The University of Strathclyde 45.6 55.1 1,366
The University of St Andrews 42.4 51.3 1,270
Heriot-Watt University 27.1 32.8 812
The University of Stirling 14.0 16.9 418
The Robert Gordon University 11.5 13.9 345
Napier University 9.7 11.8 292
Impact of HEIs external income (3)
External income (£m)
GDP impact (£m)
Employment impact
Glasgow Caledonian University 8.3 10.0 248
UHI Millennium Institute 7.8 9.5 235
Scottish Agricultural College 7.5 9.1 226
Queen Margaret University College, Edinburgh 5.5 6.6 164
The University of Paisley 4.1 4.9 122
University of Abertay Dundee 3.6 4.4 108
Edinburgh College of Art 2.1 2.5 62
Glasgow School of Art 2.0 2.4 60
The Royal Scottish Academy of Music and Drama 0.8 0.9 23
Bell College 0.3 0.3 8
Total Scotland 533.1 644.4 15,970
Future work
• Better disaggregation of the row (Scottish Government)
• Better information on student consumption
• More detailed work on intermediate inputs