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Irish universities contribute €8.89 billion to Ireland’s economy annually, report finds

Posted 4 April, 2019

  • Graduates will generate a minimum €62,000 net gain for the exchequer over their lifetime.
  • Irish universities yield €386 million per annum in export earnings and €1.5bn in R&D.

Universities across Ireland contribute €8.9bn to the economy each year, according to new research.

A report commissioned by the Irish Universities Association (IUA) has for the first time looked at the socio-economic impact of Ireland’s seven universities.

The Indecon study looked across a variety of areas including research, society, the economy, individuals, and the benefits arising from international students.

It estimates that an individual undergraduate degree holder will generate a net gain for the exchequer of €62,000 over their lifetime in today’s money, when all costs to the exchequer are taken into account.

The report found that a degree is worth an average lifetime net premium of €106,000, rising to more than €220,000 if a graduate completes a PhD.

These figures are net of tax and factor in the costs incurred by students in obtaining their degrees and income foregone during their years at university.

While the State invests about €2bn into the higher education system each year, the report estimates that the Irish economy benefits by almost €9bn from Ireland’s seven universities.

This is generated from a combination of premium on graduate earnings, the impact of research and income from overseas students.

The €9bn includes €2.8bn in direct employment and knock-on business, €2.6bn in the lifetime income gain for each years' graduates, €1.6bn in the lifetime gain to the Exchequer from higher taxes paid by graduates, €1.5bn from research and development and €386m from international students.

The Impact report confirms that university graduates generate an income premium significantly beyond those with no third-level education and have consistently lower unemployment rates, even during the recession years.

It also found that from 2000 to 2017, student numbers at the country's seven universities doubled to 120,000.

The IUA says the report highlights an absence of a sustainable funding model for Irish universities.

“The role of universities is to produce well-rounded, employable graduates and to provide centres of innovation through their research work,” said Jim Miley, Director General of the IUA.

“The Indecon report shows that, universities not only do that but also generate a cash surplus for the State over the long-term. This surely provides a compelling case for the Government and the Oireachtas to prioritise the reform of the funding model for higher education.”

“[This study] shows that more State investment in university education isn’t just the right thing to do; it’s the profitable thing to do.”

The report is available to read in full at www.saveourspark.ie/universities-impact

Separately, a new report by Universitas 21, a global network of universities, on higher education systems found that when government expenditure as a share of GDP is taken into account, Ireland is one of the lowest ranked countries.

The group’s 8th annual ‘Ranking of National Higher Education Systems’ studies 50 countries globally and evaluates their university systems across 24 indicators. 

While it ranks Ireland 19th overall, if government funding as a share of GPD is taken in account, Ireland comes in at 45th out of 50, a fall of 25 places since 2017.

The IUA believes the latest U21 report reinforces its case that funding for the Irish third level system lags well behind other countries in Europe and around the world.

“At 1.1% of GDP, Irish investment in third level education is well below the OECD and EU averages and that of countries having the best third level education systems,” it notes.

In the U21 report countries are ranked on four modules: Resources, policy environment, connectivity and output.

Within each measure the highest achieving country is given a score of 100 and scores for other countries are expressed as a percentage of this highest score.

Summary of results for Ireland:

  • Ireland is ranked 19th overall out of 50 countries measured.
  • But when government expenditure as a share of GDP is taken into account, Ireland is ranked 45th, a fall of 25 places since the 2017 ranking.
  • On a measure of expenditure per student, Ireland is ranked 23rd.
  • In Connectivity, the business rating of knowledge transfer for Irish universities is ranked highly at sixth.
  • Joint publications with industry are ranked 23rd and with international authors 16th.
  • Under Output, Ireland is ranked ninth on publications per head of population and 20th on their average impact.
  • Ireland ranks 11th for the educational levels of its workforce, and 10th for employment of those with a tertiary qualification compared with school leavers.

By Eilis O'Brien, UCD University Relations