An economic impact study conducted for the Inter-University Council of Ohio (IUC) found that the state’s public universities, their students and their statewide alumni added $42 billion in income to Ohio’s economy in 2016-17. That represents 6.7 percent of Ohio’s total gross state product.
The universities’ $42 billion of economic impact supported 558,841 jobs, which means that one of every 12 jobs in Ohio is supported by the activities of public universities and their students.
Conducted by Economic Modeling Specialists International (Emsi), a leading provider of economic impact studies, the study demonstrates how the value of public universities in Ohio positively influences both the lives of students and the growth of the state’s economy.
The study makes clear that whether from a student perspective, a taxpayer perspective or a societal perspective, higher education’s return on investment is solid. The study reports, for example, that students at Ohio’s public universities realize a 13.7 percent annual return on their investment – or $4.60 in future earnings for every $1 a student spends on tuition, supplies and opportunity costs.
Ohio taxpayers realize an 8.6 percent annual return on their investment in public universities – with the benefit coming in the form of future tax revenue and government savings resulting from reducing costs incurred by the state to pay for health care, criminal justice programs and unemployment insurance.
“The numbers speak for themselves,” said Wright State University President Cheryl B. Schrader. “The Emsi study confirms that Ohio’s public universities are substantial drivers of economic activity, creators of economic opportunity and a great long-term investment for students and the state.”
The report further notes that in return for their investment in higher education, students at public universities in Ohio receive a stream of higher future earnings that continue to grow throughout their working lives. For example, over a working lifetime, an average bachelor’s degree holder from a public university in Ohio will earn approximately $1,179,000 more than an individual with only a high school diploma or equivalent.
While the benefits to students are reflected largely in increased earnings over a lifetime, benefits to taxpayers consist primarily of taxes paid to state government and used to benefit the state, reducing costs incurred by the state. Society benefits from an expanded economy and improved quality of life.
Emsi also conducted a study of Wright State’s economic impact in FY2016-17 in Raider Country and found a $1.5 billion economic impact from the university. Raider Country is the contiguous 16-county region in Ohio anchored by Wright State’s two campuses.
Emsi found that the overall impact of Wright State on the local business community was equal to about 1.5 percent of the gross regional product of Raider Country and by comparison was nearly twice as large as the entire utilities industry in the region.
The $1.5 billion impact supported over 20,097 jobs. Emsi found that one out of every 57 jobs in Raider Country was supported by the activities of Wright State and its students. The study also found that industries that benefited the most in the area from Wright State’s impact were manufacturing, health care and social assistance, government non-educational, and finance and insurance.
Earlier this year, a separate economic impact study commissioned by the Southwestern Ohio Council for Higher Education (SOCHE) found that Wright State in FY2015-16 had more than a $1 billion annual economic impact on the Dayton region and supported 14,700 jobs.
The SOCHE study measured the impact of Wright State’s Dayton Campus in the Dayton Metropolitan Statistical Area, a region that includes Greene, Montgomery, Miami and Preble counties. It also measured the impact of the Lake Campus in Mercer County, which produced an economic impact of $39.9 million and supported the employment of 577 workers and $12.4 million in total wages.
“When it comes right down to it, Ohio’s public universities are one of the best investments available,” said IUC President Bruce Johnson. “University graduates benefit from a significant earnings premium. Public universities generate more tax dollars than they take. They create and retain wealth, and they perform better than the stock market. These are compelling reasons why supporting higher education should be a public policy priority in Ohio.”
About the IUC study
Data and assumptions used in the study are based on several sources, including the FY 2016-17 academic and financial reports from the public universities of Ohio, industry and employment data from the U.S. Bureau of Labor Statistics and U.S. Census Bureau, outputs of Emsi’s Multi-Regional Social Accounting Matrix model, and a variety of studies and surveys relating education to social behavior. The study applies a conservative methodology and follows standard practice using only the most recognized indicators of investment effectiveness and economic impact. For a full description of the data and approach used in the study, contact the IUC for a copy of the full report.
More detailed information about the Emsi study can be found at forwardohio.org.