The demographic challenge facing Scottish higher education institutions : a computable general equilibrium analysis

Hermannsson, Kristinn and Lisenkova, Katerina and McGregor, Peter and Swales, John K. (2009) The demographic challenge facing Scottish higher education institutions : a computable general equilibrium analysis. Fraser of Allander Economic Commentary, 33 (1). pp. 48-54. ISSN 2046-5378

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    Abstract

    Higher Education Institutions (HEIs) are generally regarded as important actors in regional economic development. A large literature exists on their demand side impacts as employers and as purchasers of intermediate inputs and, more recently, work has been undertaken to explore their impacts on the supply side, for example, through labour market and knowledge transfer effects. A growing evidence base suggests that HEIs have a positive impact upon the development of their host regions. However the HEI sector faces a challenge that might have significant impact on the fortunes of its host regions and has hitherto received limited attention. The populations of most developed countries are ageing and the age cohort from which university students are traditionally drawn is expected to shrink. This paper uses an HEIs-disaggregated Computable General Equilibrium (CGE) model to simulate the economic impacts of a shrinking student population upon Scotland. In the analysis we use scenarios presented in a recent Universities UK report. This paper is an output of our project entitled The Overall Impact of HEIs on Regional Economies (ESRC, RES-171-25-0032). This project is one of nine that are funded under the joint UK Higher Education Funding Councils and ESRC Initiative on The Impact of HEIs on Regional Economies. (All UK funding councils are involved: Scottish Funding Council, Higher Education Funding Council for England and Wales, and the Department for Employment and Learning Northern Ireland. We also acknowledge supplementary funding from the Centre for Public Policy for Regions (funded by SFC).