Why third level education pays for itself
By Tony Donohoe, Head of Education and Social Policy
Research carried out by Indecon on behalf of the Irish Universities Association (IUA) has revealed that Ireland’s seven universities contribute a total of €8.9 billion to the economy, reinforcing the case for adequate investment in the sector.
Commenting on the research, Tony Donohoe, Ibec head of education policy and a member of the IUA report steering group, said: “The third level funding deficit is an invisible crisis that has already damaged our international reputation to attract research and business investment and is silently eroding our competitive edge. The Indecon report provides a compelling case for the Government and the Oireachtas to prioritise the reform of the funding model. It also 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 shows that:
- There has been a significant increase in the number of students enrolling for a university education which correlates with the demand for more highly skilled employees in the Irish economy. In 2017, over 120,000 students enrolled, up 50% from 2000.
- There is a cumulative net gain to the Exchequer of €1,606 million in net present value terms based on the lifetime net earnings projections for the 2017 – 2018 cohort of new entrants to the seven universities.
- 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.
- The average lifetime net premium for an undergraduate degree holder is €106,000 compared to a UK premium of £88,000 for graduates from the prestigious Russell Group Universities. Master’s Degree holders’ net premium rises to €146,000 and PhDs’ to €222,000. 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.
- Irish universities make a total research impact of €1.5 billion to the economy. This breaks down into €632 million from direct research expenditure, €373 million spill-over impact of university-based research on the wider economy, and €526 million from indirect and induced effects.
- In 2017 – 2018 there were 16,701 full-time International students living in Ireland. Indecon estimated that the total annual export income generated for the Irish economy from international students at €386 million.
Pictured at the launch of the Indecon report were (from left): Alan Gray, Managing Director, Indecon; Professor Prof. Brian MacCraith, President of DCU and Chairman of the Irish Universities Association; Cathal Curry, Marketing, Innovation and Technology student, DCU; Dion Davis, Masters in Education Student, UCC; and Tony Donohoe, Head of Education and Social Policy, Ibec.