The economic contribution of colleges in Scotland

College graduates will boost Scotland’s economy by £52 billion over their working lives

New research shows the Scottish economy will be £52 billion better off cumulatively over the 40-year working life of college graduates.

The report from the Fraser of Allander Institute shows that over their working life, college graduates boost employment, increase real wages and contribute to increased trade and investment.

Researchers studied the impact of the 2016-17 to 2021-22 college graduate cohorts, and calculated that every college graduate in Scotland creates an additional £72,000 boost to productivity for the Scottish economy as a result of going to college. These graduates also help to support the equivalent of an additional 203,000 full-time jobs in the Scottish economy, over their 40-year working lives.

Colleges bring the added benefit of directly providing the equivalent of 10,700 full-time jobs, and they support a further 4,400 jobs elsewhere in the economy through their supply chain spending.

For just the class of 2021-22, the Scottish Government invested £740 million into colleges, which is projected to lead to a £8 billion boost to the Scottish economy, and a £2.8 billion boost to government revenues over the coming 40-year period.

The analysis released today also discusses the important contribution colleges are making to the priorities for the Scottish economy.

Mairi Spowage, Director of the Fraser of Allander Institute said: “This research demonstrates the important and unique contribution that colleges make to the skills system and the Scottish economy overall.

“The analysis in this report highlights the value that skilling up the population – which leads to income and productivity gains – can have in the long-run, and the longer-term benefits this can bring to economic growth and government revenue.

“Interestingly, the study also highlights the role that colleges play in bringing educational opportunities to those from diverse backgrounds and across all parts of Scotland. Colleges are an important part of reducing inequalities in Scotland.”

The research was commissioned by College Development Network (CDN) and Colleges Scotland. It shows the value college graduates make to the national and local economy, and the benefits that students gain from a college qualification, either for the first time or by re-training and upskilling.

Marie Hendry, Chief Executive of CDN said: “College Development Network (CDN) welcomes this important report. The research was commissioned by CDN and Colleges Scotland to evidence the critical value our colleges make to Scotland’s economic wellbeing, and the importance of having strong governance and highly-skilled and trained staff in colleges across the whole of Scotland.

“The report underlines the value and importance of our colleges in helping learners from all backgrounds achieve their potential. The study shows that colleges are uniquely placed in providing access to further and higher education for everyone. The high-quality learning and teaching that colleges provide equip their learners with the skills to fulfil their potential, enrich their communities and contribute to regional prosperity.

“Colleges use digital innovation, knowledge exchange and industry partnerships to enable the development of a skilled workforce that is supporting the economy and helping to deliver the National Strategy for Economic Transformation.”

Shona Struthers, CEO of Colleges Scotland said: “Colleges create wealth in the Scottish economy, pure and simple.

“This research comes soon after Audit Scotland warned that investment in colleges has dropped for colleges by 8.5% over recent years.

“Colleges are an excellent place for investment as the returns are so rich – it’s not just the evidence published today of increased wealth in society, which is significant, but also the role that colleges have as community anchors and as places where care-experienced students and people trying to move out of poverty can grasp great opportunities.

“Now more than ever, employers need skilled workers to enter and stay in the workforce to increase Scotland’s productivity. College graduates underpin the success of large parts of Scottish society – like providing skilled, qualified care home staff – and our economy, in training workers to tackle the climate emergency.  This research highlights the real need to support colleges now and into the future.

“Funding is falling for 24 colleges in Scotland – doing more with less year-on-year isn’t viable any more. I hope this study drives home the need for sustainable, stable investment in the college sector. Society can’t function without skilled people working in construction, in cyber security, in hospitality and across creative industries – college graduates truly are the lifeblood of Scotland’s workforce and economy, and when colleges thrive, Scotland thrives.”


Picture of Mairi Spowage, director of the Fraser of Allander Institute

Mairi is the Director of the Fraser of Allander Institute. Previously, she was the Deputy Chief Executive of the Scottish Fiscal Commission and the Head of National Accounts at the Scottish Government and has over a decade of experience working in different areas of statistics and analysis.

Ben is an economist at the Fraser of Allander Institute working across a number of projects areas. He has a Masters in Economics from the University of Edinburgh, and a degree in Economics from the University of Strathclyde.

His main areas of focus are economic policy, social care and criminal justice in Scotland. Ben also co-edits the quarter Economic Commentary and has experience in business survey design and dissemination.

Kevin is a Chancellor's Fellow in the Department of Economic with a focus on the use of regional economic models for policy analysis. Areas of interest include; energy and climate change, poverty and tourism.

Kate is a Knowledge Exchange Assistant at the FAI working across a number of project areas. She is currently studying for her MSc in Economics at the University of Edinburgh and has a bachelor’s degree in Economics from the University of Strathclyde. Kate is also the Outreach Coordinator at the Women in Economics Initiative which aims to encourage equal opportunity and improve representation in the field.

Agata Michalowicz

Agata Michalowicz  joined the Fraser of Allander Institute through the economic futures work placement. As Research Assistant, Agata has worked closely on modelling and using Input-Output tables. She looks forward to developing further skills through the MSc Applied Economics masters programme.