4 Fraser of Allander Institute
n Scotland's colleges are significant economic institutions in their own right. Their activities help
support and sustain employment across the communities that they serve.
n However, the key contribution that colleges make extends well beyond simply how much they spend
or invest in the local economy.
n Colleges play a crucial role in developing Scotland's growth potential through enhancing human
capital - whether that be providing routes from school to work, further training or university; continuous
skills-development (often in conjunction with employers); or re-training people for new opportunities.
n By developing a more productive workforce and boosting participation, colleges help deliver
long-term sustainable and inclusive economic growth. Sustainable growth is more important than ever
given the new revenue raising responsibilities of the Scottish Parliament.
n This study undertakes a detailed assessment of the contribution to Scotland's economy from a
cohort of college learners over the eight years 2008/09-2015/16.
n To do this we assess the costs and benefits to the economy from graduates leaving college with a
nationally recognised qualification. We use the Fraser of Allander's macroeconomic model of the Scottish
economy to provide a robust estimate of the impact on Gross Domestic Product (GDP), employment and
tax revenues.
n For the period 2008/09-2015/16 graduate cohorts we estimate that:
n The Scottish economy (as measured by GDP) will be better off by over £20 billion in present value
terms (i.e. with future benefits discounted) over the long-term.
n This corresponds to around an additional £55,000 boost to productivity for the Scottish economy
per graduate.
n The present value of the increase in public sector revenues is estimated to be £6.8 billion.
Over the years studied, the total costs to the public sector of investing in these learners through
nationally-recognised qualifications was approximately £2.4 billion - just 35% of the cumulative tax
revenues generated over the long-term.
n The investment is estimated to support 13,896 full time equivalent (FTE) jobs in present value
terms.
Executive Summary
The value of college graduates to the Scottish economy