The external benefits of higher education

ABSTRACT

The external benefits of higher education. Regional Studies. The private-market benefits of education are widely studied at the micro-level, although the magnitude of their macroeconomic impact is disputed. However, there are additional benefits of education that are less well understood. In this paper the macroeconomic effects of external benefits of higher education are estimated using the ‘micro-to-macro’ simulation approach. Two types of externalities are explored: technology spillovers and productivity spillovers in the labour market. These links are illustrated and the results suggest they could be very large. However, this is qualified by the dearth of microeconomic evidence, for which the authors hope to encourage further work.

摘要

高等教育的外部效益 . Regional Studies. 教育私人市场在微观层级的效益受到广泛研究，尽管这些效益对钜观经济的影响程度仍然受到争议。但仍有额外的教育效益较不被清楚地认识到。本文运用“从微观到钜观”的模拟方法，评估高等教育的外部效益对钜观经济的影响。本文探讨两种类型的外部性：劳动市场的技术外溢和生产力外溢。本文阐明这些连结，而研究结果显示，这些连结可能非常巨大，但却缺乏微观经济的证据，而这正是作者期盼鼓励的未来研究方向。

RÉSUMÉ

Les bénéfices externes découlant de l’enseignement supérieur. Regional Studies. À l’échelle microéconomique on a prêté beaucoup d’attention aux avantages du marché privé pour l’éducation, bien que l’importance de leur impact au niveau macroéconomique soit discutable. Cependant, l’éducation fournit de plus amples avantages moins bien connus. À partir des simulations ‘micro-macro’, ce présent article cherche à évaluer les effets macroéconomiques des avantages externes de l’enseignement supérieur. On examine deux sortes d’effets externes: les retombées sur la technologie et les retombées sur la productivité au marché du travail. On en illustre les liens et les résultats laissent supposer qu’ils pourraient s’avérer très importants. Néanmoins, cela est nuancé à la lumière de l’absence de résultats microéconomiques, d’où on souhaite encourager des recherches ultérieures.

ZUSAMMENFASSUNG

Externer Nutzen von Hochschulbildung. Regional Studies. Der privatwirtschaftliche Nutzen von Bildung wurde auf Mikroebene bereits ausführlich untersucht, doch der Umfang seiner makroökonomischen Auswirkung ist umstritten. Es gibt jedoch einen zusätzlichen Nutzen der Bildung, der weniger gut verstanden wird. Dieser Beitrag enthält eine Schätzung der makroökonomischen Auswirkungen des externen Nutzens von Hochschulbildung mithilfe eines ‘Mikro-zu-Makro’-Simulationsansatzes. Untersucht werden zwei Arten von Externalitäten: technische sowie Produktivitäts-Übertragungseffekte auf dem Arbeitsmarkt. Wir illustrieren diese Zusammenhänge, die den Ergebnissen zufolge äußerst umfangreich ausfallen könnten. Allerdings gelten diese Ergebnisse aufgrund der knappen mikroökonomischen Belege nur eingeschränkt, weshalb wir hoffen, zu weiteren Arbeiten motivieren zu können.

RESUMEN

Beneficios externos de la enseñanza superior. Regional Studies. Los beneficios de la educación en el sector privado se han analizado exhaustivamente a nivel micro, si bien se cuestiona la magnitud de su impacto macroeconómico. Sin embargo, existen beneficios adicionales de educación que se entienden menos. En este artículo calculamos los efectos macroeconómicos de los beneficios externos de la enseñanza superior mediante un enfoque de simulación ‘micro-a-macro’. Exploramos dos tipos de externalidades: los efectos indirectos de la tecnología y los de la productividad en el mercado laboral. Ilustramos estos vínculos y los resultados indican que podrían ser muy grandes. Sin embargo, estos resultados están limitados debido a la escasa evidencia microeconómica, y esperamos que sirvan para estimular estudios adicionales.

KEYWORDS:

• supply-side impact
• higher education institutions
• computable general equilibrium model
• social and external benefits

关键词:

• 供给面影响；高等教育机构；可计算的一般均衡模型；社会与外部效益

MOTS-CLÉS:

• impact sur l’offre
• établissement d’enseignement supérieur
• modèle d'équilibre général calculable
• avantages sociaux et externes

SCHLÜSSELWÖRTER:

• Auswirkungen auf Angebotsseite
• Hochschulen
• berechenbares allgemeines Gleichgewichtsmodell
• gesellschaftlicher und externer Nutzen

PALABRAS CLAVES:

• impacto de la oferta
• instituciones de educación superior
• modelo computable de equilibrio general
• beneficios sociales y externos

JEL:

• D58
• E17
• R13

ACKNOWLEDGEMENTS

The authors are indebted to Ursula Kelly, Richard Harris, John Moffat and Walker W. McMahon for helpful discussions and advice. Furthermore, they are grateful for the comments of three anonymous referees.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the authors.

SUPPLEMENTAL DATA

Supplemental data for this article can be accessed at http://10.1080/00343404.2016.1172062

ORCiD

Kristinn Hermansson http://orcid.org/0000-0001-9957-3914

Katerina Lisenkova http://orcid.org/0000-0003-0264-9797

Patrizio Lecca http://orcid.org/0000-0002-1053-3869

Peter McGregor http://orcid.org/0000-0003-1221-7963

Notes

1. This also raises concerns about a possible ‘funding gap’ of HE in Scotland as compared with England (Expert Group Report, 2011).

2. For example, some researchers incorporate control variables, such as occupation, that effectively absorb part of the contribution that might be appropriately attributed to HE.

3. Harris et al. (2011) focus on aggregate effects and do not adopt a spatial econometrics approach.

4. AMOS = A Macro-Micro Model of Scotland.

5. For the IO database, see http://www.gov.scot/Topics/Statistics/Browse/Economy/Input-Output/Downloads/.

6. The impact is slightly reduced when a positive and statistically significant dummy variable indicating the presence of an innovation within the period is introduced. The direct impact of HEIs is captured by the initial dummy, but HEIs also exert an indirect impact through innovation, captured here by the coefficient on the innovation dummy (Arvanitis, Sydow, & Woerter, 2008). In the present context, it is more appropriate not to ‘corrected’ for innovation, otherwise one of the mechanisms through which HEIs exert their influence is effectively being ‘controlled away’.

7. The locations of the linked HEIs are not identified. Part of the productivity increase might therefore be due to the interaction between Scottish firms and non-Scottish universities.

8. Although the real wage increases by 1.6%, the rise in productivity reduces the CPI by 1.7% so that the nominal wage falls by 0.1%.

9. The increase in real labour income equals the real wage growth (1.6%) plus the proportionate increase in employment (1.0%). The increase in real capital income equals the increase in capital stock (2.3%) plus the proportionate change in the rate of return on capital (0.0%) plus the proportionate change in the capital price index (the replacement cost of capital, –1.4%) minus the change in the CPI (–1.7%).

10. The implementation of the Scotland Act 2012 (HM Government, 2012) and the recommendations of the Smith Commission (2014) will change the fiscal relationship between Scotland and the RUK. In future, the Scottish government will retain a bigger share of locally generated tax revenue.

11. In the CGE simulations the population and labour force are held constant, so that only the share of graduates in the labour force is changing. This is to disconnect changes in the skill intensity of the labour force and changes in its size. Population projections are used simply to translate age-specific graduate shares to an aggregate share of graduates in the labour force. The impact of changes in population alone is analysed by Lisenkova et al. (2010).

12. This reflects the assumption that the proportion of graduates is unchanged in the RUK and the ROW. However, it could also be interpreted as the implication for Scotland of failing to match increases in the graduate share of the labour market if these are occurring elsewhere.

13. The significance of trade elasticities for CGE analysis of productivity changes is widely recognized (Giesecke & Madden, 2013, p. 457).

 

Additional information

Funding

This project was part of the Impact of Higher Education Institutions on Regional Economies Initiative [grant reference RES-171-25-0032], funded by the Economic and Social Research Council (ESRC), the Scottish Funding Council (SFC), the Higher Education Funding Council of England (HEFCE), the Higher Education Funding Council of Wales (HEFCW), and the Department for Employment and Learning Northern Ireland (DELNI).