Early this year, EMSI reached a milestone. For the first time in 15 years of conducting economic impact studies, our economists conducted analyses of not just one school or sector but the entire higher education systems in Texas and North Carolina. The North Carolina study is unique because we analyzed the statewide impact of higher education as well as the individual economic impacts of each of the state’s 110 institutions (16 public universities, 36 independent colleges and universities, and 58 community colleges).
In mid-February, as the legislative session and state budget process got under way, North Carolina’s higher education leaders and EMSI economists Kjell Christophersen and Aaron Olanie gathered to announce the results of EMSI’s statewide economic impact study. During fiscal year 2012-13, North Carolina higher ed institutions contributed $63.5 billion in added state income. That’s equal to more than a million jobs—double the amount of health care jobs in the state (one of the largest private-sector industries).
To arrive at this figure, EMSI economists spent months examining a variety of contributions, including elevated skills and productivity, jobs, research, clinical and hospital operations, business start-ups, construction, campus extension partnerships, and spending by out-of-state students and visitors.
Those factors—along with the social savings from lower crime rates, healthier lifestyles, and lower welfare and unemployment—generate strong returns on investment for students, taxpayers, and society. In fact, for every dollar spent on higher education in North Carolina, students see a return of $2.70, taxpayers see $3.90, and society sees $7.00.
To hear more about how these three higher ed systems work together to improve their regional economy and the lives of North Carolinians, watch the video of the announcement and read a summary of each sector’s impact below:
Nearly half of the $63.5 billion stemmed from the University of North Carolina system.
The majority of the state’s higher education research spending comes from UNC universities, and the vast majority of start-up companies related to the state’s higher education systems have formed through programs and knowledge created at these institutions.
UNC President Tom Ross commented, “All of the findings show us why getting more North Carolinians better educated is critical to meeting the workforce needs of our businesses, to moving people out of poverty, to enhancing North Carolina’s economic strength and competitiveness and to improving the health of our residents.”
When public universities are considered on their own, the benefit/cost ratio for these groups is either higher or the same as the all-sector rates (see chart).
Independent Colleges and Universities
North Carolina Independent Colleges and Universities (NCICU) include many prestigious and well-known institutions, including Duke University and Wake Forest University. These 36 institutions contributed $14.2 billion in added state income during fiscal year 2012-13 and have a benefit/cost ratio of $2.30 for every dollar spent by students and $3.60 for every dollar spent by society.
In last week’s announcement, NCICU President A. Hope Williams described the impact of the state’s higher education systems as “life-changing as well as life-saving.” This is an apt description of North Carolina’s private colleges and universities, which contribute more than half of all clinical spending by the state’s higher ed systems ($3.6 billion of $5.3 billion).
President Williams reflected on how North Carolina’s excellent education system draws students to the state and helps to keep them there: “Where a student graduates from college is an important factor in where that student or graduate decides to live and work. So, we want to continue to keep our North Carolina students in the state for college and keep our colleges and universities strong, all three sectors.”
In fiscal year 2012-13, North Carolina Community Colleges created $21.5 billion in added state income, the equivalent of 375,254 new jobs. The alumni impact, which measures increased productivity of graduates as a result of the skills they’ve learned in school, is strongest among community colleges and amounted to nearly half of the total for all higher ed sectors in the state ($19.6 billion of $42.4 billion).
EMSI’s study concluded that for every dollar spent on community college in North Carolina, students see a return of $2.30, taxpayers $4.10, and society $8.10.
An Infrastructure That Attracts
It’s an impact to be proud of. And it demonstrates what Scott Ralls, president of the North Carolina Community College System, explained in an interview: North Carolina’s public universities, independent colleges and universities, and community colleges work together to encourage the state’s economic competitiveness and prosperity. “What really makes North Carolina strong is that we have this collective higher education infrastructure that attracts people to our state. It attracts companies, and it leads to the kind of prosperity that we all hope to see.”
Higher ed institutions in North Carolina have received a flood of positive attention in the press as the result of this study. Here is a partial list of that coverage:
- News & Observer: Study Finds Higher Education Adds $63.5 Billion to NC’s Economy
- The Herald Sun: Study Claims $63.5 Impact for NC Higher Ed
- Chapel Boro: Higher Education Contributes Over $60 Billion to NC
- Smoky Mountain News: Higher Ed a Solid Investment, Study Shows
- News & Record: Campuses Spread Wealth, Wisdom Across Region
- Triangle Business Journal: Colleges and Universities Estimate Their Value to NC: $63.5 Billion
- The Herald Sun: Higher Education Pays
- Salisbury Post: A Different Kind of College Town
- The Times News: Higher Education Worth the Investment