Practice Area:	Education and Labour Markets | Public Policy
Client:	EC DG REFORM
Published:	May, 2022
Tagged:	earnings economics of education EU ex-ante evaluation impact assessment LE Europe modelling quantitative analysis skills

London Economics’ sister company, LE Europe, as part of the AARC Consortium (incorporating AARC, LE Europe and Indecon) were commissioned by the European Commission’s Directorate-General for Structural Reform Support (DG REFORM) to provide an analysis of the sustainability of higher education (HE) and further education and training (FET) in Ireland. The project’s general objective was to provide support for the preparation and implementation of institutional administrative, and growth-sustaining structural reforms in Ireland by mobilising EU funds and technical experience. The immediate beneficiaries of the project are the Irish Department of Further and Higher Education, Research, Innovation and Science (DFHERIS), while the analysis may also help the European Commission’s work in other Member States.

The study was aimed at achieving the following three outcomes, to develop:

1. A policy proposal to adapt HE and FET provision to address the current skills disparity between student outputs and qualifications and the perceived skills need of the Irish labour market, and provide the country with the right set of skills to ensure inclusive, smart, and sustainable growth;
2. An analytical model to assess the cost implications (for students/graduates, the Irish Exchequer, Higher Education Institutions (HEIs), and employers), and the macroeconomic impacts of different higher education funding policy options. Specifically, the analysis assesses the costs and macroeconomic implications associated with the three HE funding policy options for Ireland proposed by the Expert Group on Future Funding for Higher Education (also referred to as the Cassells Review); and
3. A policy proposal for the re-design of the higher education funding system in Ireland that would provide equity in access, efficiency in the investment of public resources and sustainability in the face of strong demographic growth

There were 5 key deliverables as part of the project:

	Deliverable 3.2 constitutes the final deliverable of the study, summarising our findings in relation to all three of these outcomes, and providing a range of policy recommendations for potential consideration by the DFHERIS. Part I (Sections 2 to 9) outlines our analysis of higher education and further education and training provision in Ireland, and the extent to which the provision of skills and qualifications aligns with current and expected future labour market demand in Ireland Part II (Sections 10 to 16) outlines our analysis of the different higher education funding policy options proposed for Ireland by the Expert Group on Future Funding for Higher Education4 (also referred to as the Cassells Review), including an estimation of the costs (to students/graduates, the state, higher education institutions (HEIs), and employers) and macroeconomic impacts of each option. This report is available to download here.
	Deliverable 1.1, led by Indecon, outlines the analysis of higher education and further education and training provision in Ireland, and the extent to which the provision of skills and qualifications aligns with current and expected future labour market demand in Ireland. This report is available to download here.
	Deliverable 2.1, led by LE Europe, outlines the analytical model overview of the purpose of the model developed for Ireland, including the range of building blocks needed to match the analytical requirements of DFHERIS, the features of the current higher education funding system in Ireland, as well as the scope of the three alternative funding systems proposed by the Cassells Review. This report is available to download here.
	Deliverable 2.2, led by LE Europe, summarises the findings of the analysis undertaken (based on an economic model of the costs and impacts of the Irish HE funding system developed as part of Deliverable 2.1 of this study). In particular, the report outlines the costs associated with the Baseline funding regime (for students who entered higher education in Ireland in the 2019-20 academic year), as well as the three different alternative funding options proposed by the Cassells Review and modelled as part of the analysis. These three options include A predominantly state-funded system under Option 1 of the Cassells Review’s proposals An increase in state funding with continuing fees as proposed under the Cassells Review’s Option 2, and increased state funding with income-contingent student contribution loans as proposed under Option 3 of the Cassells Review. This report  is available to download here.
	Deliverable 3.1, led by LE Europe, provides a comparison of the tuition fee and student support arrangements adopted in different jurisdictions. In particular, given the three primary options presented as part of the Cassells Review in 2016, and agreed with DFHERIS, we identified a number of higher education fees and funding approaches in jurisdictions (both within and outside the European Union) that are either: Predominantly state-funded: jurisdictions with no explicit tuition fees levied (or only notional tuition fees), possibly combined with a mixture of maintenance grants and loans to provide student support (e.g. Sweden, Austria, and to a lesser extent, Scotland), or Hybrid models: jurisdictions where institutions are funded through tuition fees that are either partially or totally administered through the provision of loans alongside Exchequer-funded core grants paid to higher education institutions (HEIs). This fee structure is combined with further maintenance grants and/or loans to support students during their studies (England, Wales, and to a lesser extent, Northern Ireland). This report is available to download here.