Delayed Effects of Graduate Education on Increased Productivity


  • John Simister Senior Lecturer, Department of Accounting, Finance & Economics, Manchester Metropolitan University.



Granger causality, Graduates, Productivity, Tertiary education.


‘Human Capital Theory’ shows that education is a vital part of improving productivity.  This paper investigates effects of tertiary education (post-school education: at universities, higher-education colleges, and similar institutions) on how productive an employee is.  A problem with such research is to identify which variable is the cause, and which is the effect.  This paper uses time-series regression analysis of World Bank data, on the fraction of a country’s workforce with tertiary education, and productivity.  This paper also uses Britain as a case study: the British Household Panel Study shows what happens to a graduate in the years after they leave university.  The delayed effects of education on output makes clear that education is a cause (rather than an effect) of improvements in productivity.  In conclusion, university-level education is beneficial to economic growth.


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