The impact of higher education institutions (HEIs) on the Scottish economy: new evidence from an HEI-disaggregated input-output approach

This paper measures the regional demand impacts on output and employment of Scottish Higher Education Institutions (HEIs) based on Input-Output tables for the year 2006. The HEI disaggregated table was developed from existing Input-Output tables using supplementary data from HESA and purchasing data for Scottish universities. We calculate direct, indirect and induced impacts. Most of the existing literature focuses on individual institutions by employing Keynesian Multiplier or Input-Output analysis. This paper adds to the literature by providing the first systematic study of all individual HEIs using a common framework of analysis. The results suggest that HEIs may have substantial regional economic impacts both in terms of output and employment. Furthermore analysis of the HEIs’ income sources suggests they are more export intensive than is commonly acknowledged, which motivates a re-evaluation of the appropriate counterfactual in regional impact studies of HEIs.