Research and analysis

Graduates and economic growth across countries

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

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Detail

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’.

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