Analyses how the proportion of the workforce with a university degree affects productivity and growth. BIS research paper number 110.
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