Universities, students and regional economies: a symbiotic relationship?

Abstract

This paper examines the heterogeneous effect of student spending in UK NUTS-2 regions. Impact analyses of the more than £45 billion students spend each year have so far been agnostic of the regional absorptive capacity to benefit from this expenditure. Building a multi-regional input–output model for the UK and combining it with data on student expenditure, domicile and level of study, the paper finds significant regional heterogeneity in gross value added and employment multipliers as well as in interregional spillovers. The analysis shows how important student expenditure is for regional economies and the symbiotic relationship between student spending and regional industrial structures that produce varying impact outcomes.