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The Importance of Graduates for the Scottish Economy: A “Micro-to-Macro” Approach DIME Workshop Regional innovation and growth: Theory, empirics and policy analysis! Kristinn Hermannsson, Katerina Lisenkova, Patrizio Lecca, Peter McGregor and Kim Swales. Fraser of Allander Institute
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The Importance of Graduates for the Scottish Economy: A “Micro-to-Macro” ApproachDIME Workshop Regional innovation and growth: Theory, empirics and policy analysis!Kristinn Hermannsson, Katerina Lisenkova, Patrizio Lecca, Peter McGregor and Kim Swales
Fraser of Allander Institute
Department of Economics
University of Strathclyde
Existing literature on regional impacts of HEIs
primarily falls into two forms:
Expenditure impacts of HEIs (and their students)
Expenditure (demand-side) multiplier studies (Blake and McDowell, 1967; Florax, 1992, Hermannsson et al, 2010)
“Knowledge economy”, with focus on technology spillovers
HEIs as a source of innovation (supply-side studies) (Jaffe, 1989; Goldstein, 2009)
We begin with the 2006 Scottish graduate total and graduate population, broken down by age, 2006.
Run the demographic projections forward to 2050 (General Register Office for Scotland)
Each projected year add new graduates, adjusted proportionately to the number of people aged 20-25
The “UK net retention rate” (HESA DLHE data) of 88% is applied to total number of Scottish graduates.
Graduates leaving the labour force determined by the retiring cohort.
For each year the total number of graduates in the labour force are divided by the total labour force to get the proportion of the labour force made up of graduates.
A CGE approach allows a single framework in which to explore the impacts of HEIs on both demand and supply sides of Scottish economy:
The supply effects identified here through human capital accumulation dominate any demand side
Any number of extensions but particularly:
Disaggregation of labour market by skill
More industry specific efficiency impacts