Economic Effects of Universities

Universities are central institutions in knowledge-based societies. Their activities have a wide range of economic and social effects. This study updates university effects on innovation, the labour market and the economy based on the previous WIFO study from 2017. Already the tax revenues resulting from the operation of universities – demand-side effects for example through personnel expenses – are higher than the federal funding for universities in the short to medium term. However, the demand-side effects of universities should be seen as the tip of an iceberg: the really significant effects, such as the long-term productivity effects via knowledge production and technology transfer, occur in addition to the demand-side effects, thus causing the return on public funds to be much higher.