Lasting growth from education

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16 november 2011 | What is the payoff from subsidizing higher education? British researchers took a closer look at the impact of smart higher education policies fostering internationalization and excellence. These could yield “real productivity gains” as seen in the UK over the last 14 years.

A smart country is a rich country. Does this proposition hold?To answer this question, researchers from the London School ofEconomics and Southampton University took a closer look at Britisheconomic data and public policies during the Labour administrationbetween 1997 and 2010.

Publishing their findings in the LSE Impact Blog, Anna Valero,John Van Reenen and Dan Corry find that the economic growth Britainexperienced during this period “was not all an unsustainable’bubble’, but was based on some real productivity increases fed bygrowth in new skills and technology”. Main contributors were the”strengthening of competition policy, the support for innovation,the expansion of university education and better regulation intelecoms and elsewhere”.

Seeing the quality of British universities as something thatcould be exported via foreign students played a crucial role inthis context. According to the authors, “higher education[represents] an export industry of global growth” where UK couldbenefit with its “elite science”. “Restricting high skilled immigration is hugelydamaging to this sector.”