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The economic impact of City of Glasgow College, December 2020 - Fraser of Allander Institute
3. The contribution of graduates from
City of Glasgow College to the Scottish
economy
Overview
The results in Chapter 2 measured the direct economic contribution of City of Glasgow College as an
institution, measured by its own footprint.
But the College is not like a normal business. Its outputs - i.e. its graduates - themselves go on to
make a positive contribution to the Scottish economy over a number of years.
The benefits to from education and training are well documented. Studies consistently show that
graduates from college receive a lifelong wage premium. Furthermore, they tend to work in more
secure, long term jobs.
Not only does this benefit each individual, it benefits society and the economy at large. Improving
skills and investing in human capital have an important effect on productivity, inclusive growth and
economic wellbeing.
Measuring this contribution at an economy wide level is not easy. But the Fraser of Allander Institute
- using its own sophisticated Computable General Equilibrium (CGE) model - did just that in 2017,
as part of a project for Colleges Scotland (Fraser of Allander Institute, 2017).
We replicate this established methodology here, for the case of City of Glasgow College.
In short, our methodology is as follows. We estimate the boost to productivity from an improvement
in skills as reflected in the likely wage premium a graduate can expect to obtain. We then track the
long-term impact of this boost to productivity over a graduate's working life2.
For the purposes of this exercise, we combine the graduates from 2011/12 - 2018/19. We also only
look at nationally-recognised qualifications3. However, it is important to note that non-recognised
qualifications will also create economic benefits.
2 In the model, these effects run from year 1 to year 40, reflecting the expected 40 year working lifetime of the average college
graduate.
3 The econometric data underpinning this modelling is not available for non-recognised qualifications.