Economic Effects of Universities

Universities produce a large variety of knowledge-related economic and social effects. Putting numbers on this impact remains a challenge. This article presents a comprehensive approach to mapping not only short-term demand-related economic effects, but also the longer-term impact of university outputs on productivity. Results from econometric studies as well as model-based simulations to assess the impact of university research and graduates show that the revenues for government associated with the impact of universities on the economy are higher than the public funding of universities even in the short term. Public expenditure on universities is hence an investment which produces a positive rate of return for the government.