HESA plots inclusive growth

One of the most effective ways to argue that what we need as a nation is more higher education and more people experiencing it is to highlight the contribution education makes to productivity.

This morning’s research insight from HESA aims to do this in the simplest way possible, using local authority areas across the UK and off-the-shelf Office for National Statistics data on participation and productivity.

The standard labour productivity (L-Prod) approach simply divides the gross value added in production (total outputs minus intermediate consumption) by total labour inputs – the new output per hour worked. This, to be fair, is hardly a new contention – we are, in fact, so certain of the contribution education makes to productivity that the effect is built into the more complex multi-factor productivity (MFP) analysis.

An indexed productivity measure (where 100 is the national average) is compared with data on qualifications held by the local population – in this case the proportion in Census 2011 that reported holding a qualification at level 4 (first year of an undergraduate degree) or above.

And this is what you get:

[Full screen]

The HESA insight here concerns a couple of other variables – the number of higher education providers based within an area, and the ONS classification of the area. Areas with low level 4 qualification rates tend to have lower productivity (as above) and less higher education providers. The archetypal low productivity area would be what is described as a “services, manufacturing, and mining legacy” area (45 per cent of those areas in the lowest decile) and would have no higher education provision (66 per cent of the lowest decile).

These are also areas that suffer from a high graduate outflow – young people aspiring to higher education level qualifications will leave the area to gain these, and few will return. Limitations around understanding the impact of HE provision in FE colleges aside, the link between low levels of higher education provision and a low productivity are pretty compelling.

If, in other words, you were looking to bring limited investment capacity to bear in promoting productivity and growth in what Boris Johnson called “left-behind” areas, one of the very best things you could build is a new university that recruits locally.

Bonus chart

HESA presents these findings as an interactive chart, and I couldn’t resist adding the locations of all the higher education providers I know about:

[Full screen]