What effect does increasing the magic skills have?

Question

For all the magic schools, the skill description only mentions that the skill makes it easier to cast those spells. You also need a certain amount of skill to get the perks associated with that skill.

Aside from unlocking perks, what effects does increasing your skill in Destruction, Alteration, Conjuration, Illusion and Restoration have? Does it increase the damage of destruction spells, for example?

Answer

Making it "easier to cast" is relatively straightforward - it reduces the Magicka cost of the spell, meaning you can cast them more often.

This is similar to how things worked in Oblivion. (I'd link you to the UESP page documenting this, but the Site's still getting hit pretty hard from all the Skyrim traffic)

Judging by the way Fortify [Magic School] effects work in enchanted items, I'm going to postulate that each level in the spell school means 1% less cost to cast. This means that with 100 skill in Destruction spells, they would cost 100% less to cast (so 50% the base cost) which stacks with the perk reduction (so 25% of the base cost with perk AND 100 skill).

This isn't combat related, but as Affe has pointed out below, increasing your magic skills is required to buy high-end spells from vendors.

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