| Practice area: | Education and Labour Markets | Growth |
|---|---|
| Client: | The Association of Commonwealth Universities |
| Published: | July, 2025 |
| Keywords: | economics of education higher education 2025 |
London Economics were commissioned by the Association of Commonwealth Universities to examine the relationship between investment in tertiary education and GDP growth, with a particular focus on Commonwealth countries.
Through the use of an ordinary least squares econometric regression model, the analysis identifies a positive and statistically significant relationship between the attainment of tertiary qualifications and GDP per capita growth.
Specifically, a 1 percentage point increase in the proportion of the adult population with tertiary qualifications in a given country is associated with a 0.030 percentage point increase in the average annual growth rate of GDP per capita over the following five-year period. Both within the core specification and when undertaking robustness checks, the estimated coefficient tends to be larger for lower income countries than for higher income countries.
In order to contextualise these results, the findings were monetised by considering a hypothetical scenario in which the tertiary attainment rate increases by a uniform 1 percentage point across all 56 Commonwealth countries. A hypothetical increase in tertiary attainment by 1 percentage point in 2025 is estimated to result in an increase in total annual Commonwealth GDP of $28 billion in 2029, with the largest impacts found in countries with the largest economies (e.g. India ($8.7 billion), the United Kingdom ($6.4 billion), and Canada ($4.1 billion)).
The full report can be found here.