$143.9 billion. That is equivalent to 2,258,077 new jobs, and it is the income added by Texas colleges and universities to the state during the 2013 fiscal year, according to EMSI’s statewide economic impact study.
EMSI’s study examines the collective economic value of 39 public general academic colleges and universities, 39 independent colleges and universities, and 51 community colleges. Roughly half of the total income, $67.7 billion, was added by public general academic colleges and universities alone.
“This report confirms what many previous studies have shown—higher education institutions in Texas impact not only the lives of our students but also the state’s economy in very meaningful ways,” said Brian McCall, chancellor of the Texas State University System and chairman of the Council of Public University Presidents and Chancellors.
Here is a breakdown of the $143.9 billion that colleges and universities add to Texas: payroll and operations spending ($15.7 billion), research spending ($2.1 billion), spending by students who relocated to the state for college ($1.5 billion), visitor spending ($278.2 million), and the added productivity of graduates ($124.3 billion). This impact is equal to approximately 11% of the total gross state product of Texas.
During the 2013 fiscal year, Texas colleges and universities spent $11.4 billion on payroll and benefits for 213,627 full-time and part-time employees. $991.9 million of that was spent on payroll to support research activities (over 90% of which was spent by public general academic colleges and universities). Research at higher ed institutions contributes to the Texas economy in many ways, including by facilitating new knowledge creation throughout the state through inventions, patent applications, and licenses.
But what benefits do colleges and universities generate in return for the investments made by students, society, and taxpayers? Our analysis proves that, for each of these stakeholder groups, higher ed is well worth the investment.
In return for the money students invest to earn their degrees, they will receive a present-day value of $98 billion in estimated increased earnings over their working lives. That translates to a return of $3.50 for every $1 that students invest in their education.
Our study shows that Texans will receive a present value of $524.9 billion in added state income over the course of the students’ working lives, due to the increased wages earned by these workers as a result of their enhanced skills and the increased productivity of businesses who employ them. Also, because education tends to result in healthier lifestyle choices, Texans will receive $36.5 billion in savings related to reduced crime, lower unemployment, and increased health and well-being.
For every dollar spent on education at Texas colleges and universities during the analysis year, Texans will receive a cumulative value of $13.20 in benefits (for as long as the FY13 students remain active in the state workforce).
Every dollar spent by state and local taxpayers to support operations of Texas colleges and universities translates into a return of $6.40 in added taxes and other benefits, primarily stemming from the students’ higher lifetime incomes and the increased output by businesses.