Irish HEIs and Region Series Report: Athlone IoT and the Midlands Region

Introduction to the ‘Irish HEIs and Region Series Report’

As part of the Tionchar project, we have produced two reports on the economic impact of Irish higher education institutions (HEIs). The two reports used different research approaches: one with the Keynesian macro-level approach and the other with the input-output (IO) micro-level approach. For the purpose of dissemination, we focused on the economic impact of HEIs at the national level, with less attention paid to their impact at the regional level. Nevertheless, we recognise that it is essential to examine the role of HEIs in both regional and national economies. The ‘Irish HEIs and Region Series Report’ is intended to contribute to our understanding of the importance of HEIs to the region where they are situated. Each of the blogs will look at the case of an individual institution and the region where it is situated. As a whole, it is hoped that these reports could provide an overview of the Irish HEIs and their region.

Athlone IoT and the Midlands Region

Situate in the heart of Ireland, the Midlands region consists four counties, namely Laois, Longford, Offaly and Westmeath, and according to the 2011 census has a population of 282,410. In Figure 1 below, we show the population growth in the four counties of the region and in the whole region as well as in the country between 2002 and 2011. It is apparent that all the counties in the Midlands Region saw their population growing faster than the national average.

Figure 1: Population by census year (2002=100)

image (19)

Source: CSO.

Despite the high growth rate of population over the last decade, the region has been struggling from an economic perspective. Figure 2 below illustrates the index of disposable income per person in the four counties between 2002 and 2012, while the state level is set at 100. Over the period, the gap between the Midlands region and the state has become wider, with the index of the region falling from 95 in 2002 to just below 90 in 2012.

Figure 2: Index of disposable income per person (State=100)

image (20)

Source: CSO.

As shown in Figure 3, the Midlands region lags behind the state in the share of employment in services. In the fourth quarter of 2014, less than 68% of employment in the Midlands Region was in services while that number was above 75% in Ireland. As suggested by many studies, the growth of the service sector could help make development more sustainable and more competitive in the knowledge-based economy. Therefore, the Midlands Region seems to face more difficulties than the rest of the country in building a modern economy.

Figure 3: Persons aged 15 years and over in employment (%)

image (21)

Source: CSO.

There is no city in the Midland region, and the largest town is Athlone in County Westmeath with a population of 20,153 according to the 2011 census (Figure 4). Portlaoise in County Laois and Mullingar in County Westmeath are the second and third largest towns in the region. With a population of 3,001, Clare in County Offaly is the tenth largest towns in the Midlands region.

Figure 4: Ten largest settlements in the Midlands region by population (2011)

image (22)

Source: CSO.

As the only third level institution in the region, Athlone Institute of Technology (IoT) is located in Athlone – the largest town in the Midlands. In 2010-11, a total of 4,439 undergraduates and 446 postgraduates were enrolled at the Athlone IoT, which employed a total of 509 staff. According to its financial data of 2009-10, the Athlone IoT received €47.4 million and spent €43.9 million.

In 2010-11, the Athlone IoT had the effect of generating a gross local output nationally of €81.30 million, with a concomitant generation of local disposable income nationally of €65.65 million (Table 1).

Using the Keynesian macro-level approach, our analysis also showed that, the Athlone IoT had the effect of generating a gross local output regionally of €64.75 million, with a concomitant generation of local disposable income regionally of €52.84 million.

Overall, the gross local output multiplier at the regional level on an output basis was estimated as 1.83. Every €1 of initial increase (decrease) in the expenditure base of the Athlone IoT would result in a rise (fall) of €1.83 in gross local output in the Midlands region.

For income, the local disposable income multiplier at the regional level on an output basis was estimated 1.76. Every €1 of initial increase (decrease) in the value of disposable income from the Athlone IoT would lead to a rise (fall) of €1.76 in local disposable income.

Table 1: Effects of the operation of Athlone on the Midlands region and Ireland (€000s)

Midlands region Ireland
Expenditure base 43,598 43,598
First round GLO (Y1) 35,365 42,405
First round LDI (D1) 30,096 35,545
Second round GLO (Y2) 24,239 30,495
Second round LDI (D2) 18,761 23,603
Final GLO (Yf) 64,751 81,299
Final LDI (Df) 52,841 65,648
GLO multiplier (Yf/Y1) 1.83 1.92
LDI multiplier (Df/D1) 1.76 1.85
Expenditure base multiplier (GLO) (Yf/E) 1.49 1.86
Expenditure base multiplier (LDI) (Df/E) 1.21 1.51

Source: Zhang et al. (2015).

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