Researchers prepare the 2nd Study on the Economic and Social Impact of Public and Private Universities in the region of Madrid

The Ministry of Science, Universities and Innovation of the Community of Madrid and the Conference of Social Councils of Madrid Universities have presented the 2nd Study on the Economic and Social Impact of Public and Private Universities in the region of Madrid. This study has been carried out by researchers from the Universidad Carlos III de Madrid (UC3M).

The second edition of the study quantifies the impact of the activities of the region’s public and private universities on Madrid’s economy and society. The study analyses the economic contribution of university activities in the short and long term, the impact on economic performance resulting from the pandemic and the tax contribution of those who completed their studies in 2018.

One of the main differences between the first study, carried out in 2016, and the current one is the period over which the analysis is carried out. In this study, in addition to quantifying the short-term impact (referring to the 2018-2019 academic year), a longer period of time has also been taken into account, between 2000 and 2018. Another difference is the breadth of the Madrid university sector considered. The current report analyses six public and eight private universities which had academic activity during the 2018-2019 academic year.

Short-term contributions

In 2018, the Madrid university sector as a whole generated income (gross value added) that accounted for 3.15% of the regional GDP. Of this percentage, 1.83% is attributable to universities and 1.32% to students, visitors and conference attendees. This represents 3.38% of the total wage income received by families in the Community of Madrid in that year. Furthermore, the Madrid university sector contributed 103,182 jobs, which corresponds to 3.42% of total employment in the region.

Impact of the pandemic

From the data collected for the 2020-2021 academic year, it is estimated that the Madrid university sector’s contribution to the regional GDP in 2020 was 2.67% and the total jobs generated accounted for 2.78% of employment (compared to 3.42% in 2018). With this rough estimate, the report concludes that, regarding the economic impact of 2018, the contribution to regional GDP decreased by 15% and the contribution to employment by 19%. This is due to the drop in students enrolled in the 2020-2021 academic year, as well as in visitors and conference attendees, as a result of the Covid-19 pandemic.

Tax contribution

As a whole, taxation via personal income tax and VAT of graduates from any of the Madrid universities (public and private) in 2018 was 7,665.1 million euros.

On the other hand, by comparing the additional tax revenue of those who completed their studies in 2018 in one of the Madrid public universities with the 932.6 million euros that these universities receive from the Community of Madrid, it can be deduced that with the additional taxes paid by graduates, ¤5.8 would be returned annually to Madrid society for each euro invested by the Community of Madrid in the funding of public universities.

Long-term impact

In the period between 2000 and 2018, all Madrid universities (public and private) contributed 0.4 percentage points to the economic growth of the Community of Madrid. In other words, 19% of the average total growth of the Madrid economy in that period is attributable to contributions from the region’s universities.

This second edition of the study was directed and coordinated by Rosario Romera, a lecturer of Statistics at UC3M and a member of the Interuniversity Institute "Advanced Research on Evaluation of Science and Universities" (INAECU, in its Spanish acronym), a joint centre created by the Universidad Carlos III de Madrid and the Universidad Autónoma de Madrid, of which the universities that make up the 4U Alliance are currently members.