The economic, social and cultural impact Theof the economic University and of social York impact of the University of York Final Report to the University of York Draft report for the University of York September 2018 November 2018 About London Economics London Economics is one of Europe's leading specialist economics and policy consultancies. Based in London and with offices and associate offices in five other European capitals, we advise an international client base throughout Europe and beyond on economic and financial analysis, litigation support, policy development and evaluation, business strategy, and regulatory and competition policy. Our consultants are highly-qualified economists who apply a wide range of analytical tools to tackle complex problems across the business and policy spheres. 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Authors Ms Maike Halterbeck Associate Director, +44 (0) 20 3701 7724, [email protected] Dr Gavan Conlon Partner, +44 (0) 20 3701 7703, [email protected] Ms Sophie Hedges Economic Consultant, +44 (0) 20 3701 7711, [email protected] Mr Daniel Herr Economic Consultant, +44 (0) 20 3701 7715, [email protected] Ms Alice Battiston Economic Analyst, +44 (0) 20 3701 7713, [email protected] Source of icons: Bioraven and Palsur / Shutterstock.com; AIGA, Cole Bemis and Picol Vector / Iconfinder.com Cover picture credit: The University of York Wherever possible London Economics uses paper sourced from sustainably managed forests using production processes that meet the EU Ecolabel requirements. Copyright © 2018 London Economics. Except for the quotation of short passages for the purposes of criticism or review, no part of this document may be reproduced without permission. 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Table of Contents Page Executive Summary iii The impact of the University of York’s teaching and learning activities iii The impact of the University of York’s research activities iv The contribution of the University of York to educational exports v The direct, indirect and induced impact of the University of York vi The aggregate economic impact of the University of York vii The social and cultural impact of the University of York viii 1 Introduction 9 1.1 Structure of the report 9 2 The impact of the University of York’s teaching and learning activities 11 2.1 Introduction and rationale 11 2.2 Valuing the economic contribution of a higher education institution 11 2.3 The 2016-17 cohort of University of York students 12 2.4 Completion rates 13 2.5 Defining the returns to higher education qualifications 14 2.6 Estimating the returns to higher education qualifications 15 2.7 Estimated net graduate premium and net public purse benefit 19 2.8 Internal rate of return 21 2.9 Aggregate results of the economic impact of teaching and learning 22 3 The impact of research and knowledge transfer activities 24 3.1 Direct research impact 24 3.2 Productivity spillovers 26 3.3 Aggregate impact of the University of York’s research activities 28 4 The impact on exports 33 4.1 The 2016-17 cohort of non-UK-domiciled students 33 4.2 Net tuition fee income associated with international students 34 4.3 Non-tuition fee income associated with international students 36 4.4 Aggregate impact on exports 39 5 Direct, indirect and induced impacts 41 5.1 The impact of the University of York’s expenditure 42 5.2 The impact associated with University of York students’ expenditures 46 5.3 Adjusting for double counting with other strands of impact and transfers between different agents in the economy 49 5.4 Total direct, indirect and induced impact of the University of York 49 6 The social and cultural impact of the University of York 52 6.1 Methodological approach 52 London Economics The economic, social and cultural impact of the University of York i Table of Contents Page 6.2 Assessing the wider economic and social benefits 52 7 Aggregate economic impact of the University of York 60 Index of Tables, Figures and Boxes 61 ANNEXES 65 Annex 1 References 66 Annex 2 Technical Annex 68 A2.1 Impact of the University of York’s teaching and learning activities 68 A2.2 Impact on exports 86 London Economics ii The economic, social and cultural impact of the University of York Executive Summary Executive Summary London Economics were commissioned to analyse the economic, social and cultural impact of the University of York across the United Kingdom in 2016-17. In addition to assessing the direct, indirect and induced impact associated with the University of York’s physical footprint, we also generated estimates of the economic benefits associated with the University’s teaching and learning activity associated with the 2016-17 cohort of students, the impact of the University’s research activities, as well as the impact of educational exports generated by the University’s overseas students. On top of the purely economic impacts associated with the University’s teaching and research activities, there are a multitude of non-quantifiable societal impacts generated at home and abroad. These were addressed through a survey of University of York alumni, with additional case studies showcasing the University of York’s real-world impact. The impact of the University of York’s teaching and learning activities The analysis of the impact of the University’s teaching and learning activities estimates the enhanced employment and earnings benefits to students, and the additional taxation receipts to the Exchequer associated with higher education qualification attainment, adjusted for the characteristics of the 5,665 UK-domiciled students who started a qualification or credit-bearing module at the University of York in the 2016-17 academic year. Incorporating both the costs and benefits to students, the analysis suggests that, for an English- domiciled student, the net graduate premium associated with a representative full-time first degree from the University of York (with GCE ‘A’ Levels as their highest level of prior attainment) was approximately £78,000 for male students and £58,000 for female students (in 2016-17 money terms). This corresponds to a rate of return of 12.7% and 11.8% respectively1. Taking account of the costs and benefits to the public purse, the analysis indicates that the net Exchequer benefit associated with a representative English-domiciled full-time first degree student at the University of York stands at £85,000 for men and £51,000 for women, corresponding to a rate of return on investment of 14.6% and 12.7% respectively. The net graduate premiums and net Exchequer benefits (by students’ gender, study mode, study level, domicile and The impact of teaching prior attainment, and adjusted for the specific subject mix of the cohort) were combined with information on the and learning generated number of students starting qualifications at the University by the 2016-17 cohort of in 2016-17, as well as expected completion rates. The analysis suggests that the aggregate economic impact University of York generated by the University of York’s teaching and learning students stood at £487.9 activities stood at approximately £487.9 million. Of this total, £232.3 million (48%) was accrued by students, while million. £255.6 million (52%) was accrued by the Exchequer. 1 This compares to the yield associated with a 30 year Treasury Gilt of 1.92% (30 year generic Gilt yield as of 1st October 2018). London Economics The economic, social and cultural impact of the University of York iii Executive Summary Table 1 Total impact of the University of York’s teaching and learning activities (£m), by type of impact, domicile and study mode Student domicile Type of impact England Wales Scotland Northern Ireland Total Students £224.9m £4.1m £2.1m £1.2m £232.3m Full-time £224.7m £4.1m £2.1m £1.2m £232.1m Part-time £0.2m £0.0m £0.0m £0.0m £0.2m Exchequer £248.9m £3.4m £2.2m £1.1m £255.6m Full-time £245.4m £3.4m £2.2m £1.1m £252.1m Part-time £3.5m £0.0m £0.0m £0.0m £3.5m Total £473.8m £7.4m £4.4m £2.3m £487.9m Full-time £470.1m £7.4m £4.4m £2.3m £484.2m Part-time £3.7m £0.0m £0.0m £0.0m £3.7m Note: All estimates are presented in 2016-17 prices, discounted to reflect net present values and rounded to the nearest £0.1m. Source: London Economics’ analysis The impact of the University of York’s research activities The University of York is at the forefront of international research activity. Ranked in the top 125 of higher education institutions globally2, academic staff across the University consistently generate world-class research.