| Summary: | This dissertation explores the overall economic impact of Higher Education Institutions (HEIs) at a sub-regional level in Scotland. By focussing on the overall economic impacts I seek to consider both demand side impacts (expenditures) and supply side impacts (e.g. human capital, knowledge, wider impacts). The analysis focuses on the City of Glasgow and how it interacts with the wider metropolitan area (the rest of Strathclyde) and the rest of Scotland. In order to analyse the interregional demand-side impact of HEIs a novel 3- region Input-Output table is constructed, which identifies the role of commuting in driving wage and consumption flows between the regions. Several applications are undertaken: the interregional expenditure impact of HEIs; the interregional expenditure and displacement impact of students' consumption expenditures; the interregional distribution of public funding for HEIs; the impact of HEIs in the West of Scotland matching the performance of HEIs in the rest of Scotland at complementing their public funding with external income; and the interregional "balanced expenditure" impact of HEIs. The “balanced expenditure“ analysis augments traditional impact study methods to explicitly acknowledge the binding budget constraint of public spending. This is particularly relevant for devolved governments, like in Scotland, where income is composed of a block grant from the central government. A CGE-model of the City of Glasgow is constructed in order to analyse the supply-side impact of a rising share of graduates in the working age population. For this I draw on a range of evidence on wage premia and how this can be interpreted as an indicator of graduate productivity. For Glasgow I estimate that a long run rise in the share of graduates will lead to an increase in labour productivity that triggers a significant long-run boost to Gross Regional Product (GRP). A range of sensitivities are explored
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