The demographic challenge facing Scottish HEIs: a computable general equilibrium analysis

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. Keywords: HEIs, University Impact, Input-Output

Impact of 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. Keywords: HEIs, University Impact, Input-Output

Attribution of pollution generation to local private and public demands in a small open economy: results from a SAM-based neo-classical linear attribution system for Scotland

For the construction of environmental accounts, Input Output (IO) systems have a number of clear advantages. First IO is an internally consistency, rigorous accounting framework. Second, the characteristics of IO systems are well known. Third, IO systems focus on the link between intermediate and final demands, and can attribute the indirect, intermediate use of commodities to elements of final demand. However, there are concerns over the degree of appropriateness of the standard IO attribution approaches (McGregor et al, 2001a). If standard Type I output-pollution multiplier, especially in the case of a very open economy such as Scotland, responsibility for much pollution can be attributed to external sources of demand. Furthermore, when Type II output-pollution multipliers are utilised, local private consumption virtually disappears as a pollution source. This seems to be at variance with the common environmental approach, which would wish to place domestic consumption at the centre of pollution attribution

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

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)

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

The national impact of regional policy : policy simulation with labour market constraints in a two-regional computable general equilibrium model

The first step in a comprehensive evaluation of regional policy is to identify its full spatial impact. This involves two tasks. The first is to determine the form and strength of inter-regional linkages. The second is to specify the national constraints within which the system of regional economies operates. In this paper we use simulation results from a two-region Computable General Equilibrium (CGE) model of Scotland and the rest of the UK (RUK) to investigate these issues. The inter-regional linkages incorporate trade and income flows, inter-regional capital mobility and migration. The constraint that we focus on is an overall national population constraint and its impact on regional wage determination. The paper is structured in the following way. Section 2 outlines the AMOSRUK modelling framework. Section 3 describes the alternative labour-market model configurations used in the simulations. Section 4 reports the results for the model simulation and Section 5 is a short conclusion

An extension and application of the Leontief pollution model for waste generation and disposal in Scotland

Solid waste generation, treatment and disposal are important policy concerns for the Scottish Parliament. As a result of the Environment Act 1995, a National Waste Strategy for Scotland was introduced with the general aim of reducing the amount of waste produced and dealing with what is produced in more sustainable ways. This implies the need for an empirical framework to inform policymakers regarding the relationship between economic activity and waste generation, treatment and disposal and the likely impacts of any policy actions or other disturbances on all types of sustainability indicators. In this paper we report on a study to develop an extended input-output (IO) system of the type originally proposed in the seminal paper by Leontief (1970). This involves extending the standard IOaccounts to take account of pollution or waste generation as an additional output accompanying production and consumption activities in the economy and of the activity required to clean up (or prevent) these unwanted outputs. The extension of IO tables to take account of pollution/waste generation is relatively widespread in the literature. It is usually achieved through the introduction of physical pollution/waste-output coefficients, and has been previously applied to Scotland for the case ofair pollution (see McNicoll & Blackmore, 1993, McGregor et al, 2001). Such an approach allows us to examine the impact of the economy on the environment, in terms of the amount of pollution/waste emitted as a result of economic activity. However, it does not allow us to track the feedback from the environment to the economy in terms of the resources used in environmental cleaning. If we areinterested in this aspect, we need to identify the input structure of any pollution abatement or waste disposal activities and identify columns in the IO tables representing cleaning activities

The Richard commission and the financing of devolved government : the economics of devolution in Wales: Briefing No. 8

If the Barnett formula is rigorously applied to determine the budget of the Welsh Assembly Government, this will ultimately adversely affect the economy of Wales by limiting the growth in aggregate demand. This effect is reinforced now that population weights determining rises in expenditure in Wales (and Scotland and Northern Ireland) are regularly up-dated. There is some controversy in Wales about whether some form of needs-assessment exercise would favour Wales relative to its current position. What is clear is that the outcome of a rigorous, long term application of the Barnett formula would be a share of UK public expenditures in Wales (and Scotland and Northern Ireland) that was almost certainly below the level that would be dictated by any conventional understanding of 'needs'. The impact of the tax-varying power favoured by the Richard Commission is ambiguous, with the direction of effects dependent on the reaction of the current labour force and potential migrants. If workers insist on full compensation for loss of income to tax through a rise in gross wages a tax rise would lead to an economic contraction. However, if workers value the additional public services financed by the tax rise as equal to their loss of disposable income, this effect can be avoided. Much in other words would depend on how the proceeds of the tax rise were spen

The relative efficiency of automatic and discretionary regional aid

For the last two decades, the primary instruments for UK regional policy have been discretionary subsidies. Such aid is targeted at "additional" projects - projects that would not have been implemented without the subsidy - and the subsidy should be the minimum necessary for the project to proceed. Discretionary subsidies are thought to be more efficient than automatic subsidies, where many of the aided projects are non-additional and all projects receive the same subsidy rate. The present paper builds on Swales (1995) and Wren (2007a) to compare three subsidy schemes: an automatic scheme and two types of discretionary scheme, one with accurate appraisal and the other with appraisal error. These schemes are assessed on their expected welfare impacts. The particular focus is the reduction in welfare gain imposed by the interaction of appraisal error and the requirements for accountability. This is substantial and difficult to detect with conventional evaluation techniques