IDEAS home Printed from https://ideas.repec.org/p/edn/sirdps/548.html
   My bibliography  Save this paper

How much does a single graduation cohort from further education colleges contribute to an open regional economy?

Author

Listed:
  • Hermannsson, Kristinn
  • Lecca, Patrizio
  • Swales, J. Kim

Abstract

Econometric analysis has been inconclusive in determining the contribution that increased skills have on macroeconomic performance whilst conventional growth accounting approaches to the same problem rest on restrictive assumptions. We propose an alternative micro-to-macro method which combines elements of growth accounting and numerical general equilibrium modelling. The usefulness of this approach for applied education policy analysis is demonstrated by evaluating the macroeconomic impact on the Scottish economy of a single graduation cohort from further education colleges. We find the macroeconomic impact to be significant. From a policy point of view this supports a revival of interest in the conventional teaching role of education institutions.

Suggested Citation

  • Hermannsson, Kristinn & Lecca, Patrizio & Swales, J. Kim, 2014. "How much does a single graduation cohort from further education colleges contribute to an open regional economy?," SIRE Discussion Papers 2014-004, Scottish Institute for Research in Economics (SIRE).
  • Handle: RePEc:edn:sirdps:548
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10943/548
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ian Walker & Yu Zhu, 2008. "The College Wage Premium and the Expansion of Higher Education in the UK," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(4), pages 695-709, December.
    2. anonymous, 1995. "Does the bouncing ball lead to economic growth?," Regional Update, Federal Reserve Bank of Atlanta, issue Jul, pages 1-2,4-6.
    3. Blanchflower, David G. & Oswald, Andrew J., 2005. "The Wage Curve Reloaded," IZA Discussion Papers 1665, Institute of Labor Economics (IZA).
    4. Robert J. Barro, 2013. "Inflation and Economic Growth," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 121-144, May.
    5. Harrigan, Frank & McGregor, Peter G. & Dourmashkin, Neil & Perman, Roger & Swales, Kim & Yin, Ya Ping, 1991. "AMOS : A macro-micro model of Scotland," Economic Modelling, Elsevier, vol. 8(4), pages 424-479, October.
    6. David G. Blanchflower & Andrew J. Oswald, 1995. "The Wage Curve," MIT Press Books, The MIT Press, edition 1, volume 1, number 026202375x, December.
    7. Mikael Lindahl & Alan B. Krueger, 2001. "Education for Growth: Why and for Whom?," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1101-1136, December.
    8. Daron Acemoglu & David Autor, 2012. "What Does Human Capital Do? A Review of Goldin and Katz's The Race between Education and Technology," Journal of Economic Literature, American Economic Association, vol. 50(2), pages 426-463, June.
    9. D. W. Jorgenson & Z. Griliches, 1967. "The Explanation of Productivity Change," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 34(3), pages 249-283.
    10. J. A. Giesecke & N. H. Tran & G.A. Meagher & F. Pang, 2011. "Growth and Change in the Vietnamese Labour Market: A decomposition of forecast trends in employment over 2010-2020," Centre of Policy Studies/IMPACT Centre Working Papers g-216, Victoria University, Centre of Policy Studies/IMPACT Centre.
    11. Barro, Robert J, 1999. "Notes on Growth Accounting," Journal of Economic Growth, Springer, vol. 4(2), pages 119-137, June.
    12. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173, Decembrie.
    13. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    14. Barbara Sianesi & John Van Reenen, 2003. "The Returns to Education: Macroeconomics," Journal of Economic Surveys, Wiley Blackwell, vol. 17(2), pages 157-200, April.
    15. O. Ashenfelter & D. Card (ed.), 1999. "Handbook of Labor Economics," Handbook of Labor Economics, Elsevier, edition 1, volume 3, number 3.
    16. Lange, Fabian & Topel, Robert, 2006. "The Social Value of Education and Human Capital," Handbook of the Economics of Education, in: Erik Hanushek & F. Welch (ed.), Handbook of the Economics of Education, edition 1, volume 1, chapter 8, pages 459-509, Elsevier.
    17. Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 143-173, October.
    18. Dorothe Bonjour & Lynn F. Cherkas & Jonathan E. Haskel & Denise D. Hawkes & Tim D. Spector, 2003. "Returns to Education: Evidence from U.K. Twins," American Economic Review, American Economic Association, vol. 93(5), pages 1799-1812, December.
    19. Checchi,Daniele, 2006. "The Economics of Education," Cambridge Books, Cambridge University Press, number 9780521793100.
    20. Zvi Griliches, 1996. "The Discovery of the Residual: A Historical Note," Journal of Economic Literature, American Economic Association, vol. 34(3), pages 1324-1330, September.
    21. Xavier Sala-I-Martin, 1997. "Transfers, Social Safety Nets, and Economic Growth," IMF Staff Papers, Palgrave Macmillan, vol. 44(1), pages 81-102, March.
    22. Theodore W. Schultz, 1960. "Capital Formation by Education," Journal of Political Economy, University of Chicago Press, vol. 68(6), pages 571-571.
    23. Stiglitz, Joseph E, 1975. "The Theory of "Screening," Education, and the Distribution of Income," American Economic Review, American Economic Association, vol. 65(3), pages 283-300, June.
    24. Patrizio Lecca & Peter G. McGregor & J. Kim Swales & Ya Ping Yin, 2014. "Balanced Budget Multipliers For Small Open Regions Within A Federal System: Evidence From The Scottish Variable Rate Of Income Tax," Journal of Regional Science, Wiley Blackwell, vol. 54(3), pages 402-421, June.
    25. James A. Giesecke & John R. Madden, 2006. "Cge Evaluation Of A University'S Effects On A Regional Economy: An Integrated Assessment Of Expenditure And Knowledge Impacts," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 18(3), pages 229-251, November.
    26. Claudia Goldin & Lawrence F. Katz, 2007. "The Race between Education and Technology: The Evolution of U.S. Educational Wage Differentials, 1890 to 2005," NBER Working Papers 12984, National Bureau of Economic Research, Inc.
    27. Lecca, Patrizio & McGregor, Peter G. & Swales, J. Kim, 2013. "Forward-looking and myopic regional Computable General Equilibrium models: How significant is the distinction?," Economic Modelling, Elsevier, vol. 31(C), pages 160-176.
    28. Richard Blundell & Lorraine Dearden & Barbara Sianesi, 2005. "Evaluating the effect of education on earnings: models, methods and results from the National Child Development Survey," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 168(3), pages 473-512, July.
    29. Jack Britton & Neil Shephard & Anna Vignoles, 2015. "Comparing sample survey measures of English earnings of graduates with administrative data during the Great Recession," IFS Working Papers W15/28, Institute for Fiscal Studies.
    30. Colm Harmon & Hessel Oosterbeek & Ian Walker, 2003. "The Returns to Education: Microeconomics," Journal of Economic Surveys, Wiley Blackwell, vol. 17(2), pages 115-156, April.
    31. Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, vol. 66(4), pages 281-281.
    32. Geraint Johnes & Jill Johnes (ed.), 2004. "International Handbook on the Economics of Education," Books, Edward Elgar Publishing, number 2847.
    33. Card, David, 2001. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," Econometrica, Econometric Society, vol. 69(5), pages 1127-1160, September.
    34. Kristinn Hermannsson & Katerina Lisenkova & Patrizio Lecca & J Kim Swales & Peter G McGregor, 2014. "The Regional Economic Impact of More Graduates in the Labour Market: A ‘Micro-to-Macro’ Analysis for Scotland," Environment and Planning A, , vol. 46(2), pages 471-487, February.
    35. Blanchflower, David G & Oswald, Andrew J, 1994. "Estimating a Wage Curve for Britain: 1973-90," Economic Journal, Royal Economic Society, vol. 104(426), pages 1025-1043, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Graziano, Marcello & Gunther, Peter & Gallaher, Adam & Carstensen, Fred V. & Becker, Brian, 2020. "The wider regional benefits of power grids improved resilience through tree-trimming operations evidences from Connecticut, USA," Energy Policy, Elsevier, vol. 138(C).
    2. Adalgiso Amendola & Cristian Barra & Roberto Zotti, 2020. "Does graduate human capital production increase local economic development? An instrumental variable approach," Journal of Regional Science, Wiley Blackwell, vol. 60(5), pages 959-994, November.
    3. Kristinn Hermannsson & Katerina Lisenkova & Patrizio Lecca & Peter G. McGregor & J. Kim Swales, 2017. "The external benefits of higher education," Regional Studies, Taylor & Francis Journals, vol. 51(7), pages 1077-1088, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kristinn Hermannsson & Patrizio Lecca, 2016. "Human Capital in Economic Development: From Labour Productivity to Macroeconomic Impact," Economic Papers, The Economic Society of Australia, vol. 35(1), pages 24-36, March.
    2. Hermannsson, Kristinn & Lecca, Patrizio, 2015. "Human Capital in Economics Development: From Labour Productivity to Macroeconomic Impact," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 2015-53, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Kristinn Hermannsson & Katerina Lisenkova & Patrizio Lecca & J Kim Swales & Peter G McGregor, 2014. "The Regional Economic Impact of More Graduates in the Labour Market: A ‘Micro-to-Macro’ Analysis for Scotland," Environment and Planning A, , vol. 46(2), pages 471-487, February.
    4. Kristinn Hermannsson & Patrizio Lecca, 2014. "Human capital investment and population growth: An overlapping generations analysis for Malawi," EcoMod2014 6823, EcoMod.
    5. Lisa Grazzini, 2016. "The Importance of the Quality of Education: Some Determinants and its Effects on Earning Returns and Economic Growth," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2016(2), pages 43-82.
    6. Denis Maguain, 2007. "Les rendements de l'éducation en comparaison internationale," Économie et Prévision, Programme National Persée, vol. 180(4), pages 87-106.
    7. Wößmann, Ludger, 2000. "Specifying Human Capital: A Review, Some Extensions, and Development Effects," Kiel Working Papers 1007, Kiel Institute for the World Economy (IfW Kiel).
    8. Mueller, Normann, 2007. "(Mis-)Understanding Education Externalities," MPRA Paper 5331, University Library of Munich, Germany, revised Mar 2007.
    9. repec:eee:labchp:v:3:y:1999:i:pc:p:2943-2984 is not listed on IDEAS
    10. Nelson H. Barbosa Filho, 2005. "Estimating Potential Output : a Survey of the Alternative Methods and their Applications to Brazil," Discussion Papers 1092, Instituto de Pesquisa Econômica Aplicada - IPEA.
    11. Ralph Hippe & Roger Fouquet, 2024. "The Human Capital Transition and the Role of Policy," Springer Books, in: Claude Diebolt & Michael Haupert (ed.), Handbook of Cliometrics, edition 3, pages 411-457, Springer.
    12. Tan, Clifford, 2013. "The contribution of university rankings to country's GDP per capita," MPRA Paper 53900, University Library of Munich, Germany.
    13. Michael Landesmann & Robert Stehrer, 2012. "Skills and the Competitiveness of EU Manufacturing Industries," Chapters, in: Matilde Mas & Robert Stehrer (ed.), Industrial Productivity in Europe, chapter 12, Edward Elgar Publishing.
    14. Middendorf Torge, 2006. "Human Capital and Economic Growth in OECD Countries," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 226(6), pages 670-686, December.
    15. Sebastian George, ENE & Danut, CHILAREZ, 2015. "The Influence Of Government Spending, Financial, Monetary And Fiscal Policies On The Gdp. Comparative Analysis Romania – Lithuania," Management Strategies Journal, Constantin Brancoveanu University, vol. 29(3), pages 6-15.
    16. Conrad, Daren, 2017. "Education's Contribution to Economic Growth," MPRA Paper 77365, University Library of Munich, Germany.
    17. Mikael Lindahl & Alan B. Krueger, 2001. "Education for Growth: Why and for Whom?," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1101-1136, December.
    18. Zhang Wei-Bin, 2012. "Education and Human Capital Accumulation in a Two -Sector Growth Model with Elastic Labor Supply," Scientific Annals of Economics and Business, Sciendo, vol. 59(1), pages 289-309, July.
    19. Eric A. Hanushek & Ludger Woessmann, 2008. "The Role of Cognitive Skills in Economic Development," Journal of Economic Literature, American Economic Association, vol. 46(3), pages 607-668, September.
    20. Wei-Bin Zhang, 2015. "National Education and Global Economic Growth: A Synthesis of the Uzawa–Lucas Two-Sector and the Oniki–Uzawa Trade Models," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 6(4), pages 905-928, December.
    21. Bahar Bayraktar-Sağlam, 2016. "The Stages of Human Capital and Economic Growth: Does the Direction of Causality Matter for the Rich and the Poor?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 127(1), pages 243-302, May.

    More about this item

    Keywords

    Graduates; Further Education Colleges; Labour Supply; Economic Impact; General Equilibrium;
    All these keywords.

    JEL classification:

    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:edn:sirdps:548. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Research Office (email available below). General contact details of provider: https://edirc.repec.org/data/sireeuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.