This research, conducted by the National Institute of Economic and Social Research (NIESR) for BIS, explains the wider macroeconomic benefits of a more highly-educated workforce. Higher education (HE) provides personal benefits (such as the wage premium), and also significantly contributes to long-run productivity and economic growth
There are 3 important findings:
- around 20% of UK economic growth (from 1982 to 2005) came from increased graduate skills; however, the growth accounting approach used for this result ignores the indirect benefits of HE
- once indirect benefits are taken into account using econometric analysis, a 1% increase in the share of the workforce with a university degree raises long-run productivity by between 0.2% and 0.5%
- this implies that we can attribute at least a third of the increase in UK labour productivity between 1994 and 2005 to the rising number of people with a university degree
See also the ‘Impact of University Degrees on the Lifecycle of Earnings’.