June 15, 2018 by Luke Mason
Ohio’s public universities added $42 billion to the state’s economy in fiscal year (FY) 2016-2017, according to Emsi’s recent Economic Impact Study (EIS). That’s nearly 7% of the state’s total economy.
The presidents of all 14 public universities gathered Tuesday at the Ohio Statehouse, along with Sen. Randy Gardner and Emsi economist Hannah Ruffridge, to share the results of the study. Commissioned by the Inter-University Council of Ohio (IUC), the EIS was overwhelmingly positive on all fronts.
“We know higher education is a great investment for individuals,” said Michael V. Drake, president of The Ohio State University.
IUC asked Emsi to conduct this study as part of Forward Ohio. The initiative aims to increase awareness of the value of public education and gain public support for greater investment in it.
To do this, the IUC knew it needed tangible, data-driven evidence.
“We cannot establish policies in this state based on anecdotal stories and information,” Gardner said. “This study is important because we’re going to look squarely in the eye of the statistics and find out how important higher education is.”
Ohio’s public universities support over 558,000 jobs in the state. That’s one out of every 12 jobs. In addition to jobs, Ohio taxpayers also see an 8.6% annual internal rate of return for investing in Ohio’s public universities.
Typically, people who earn bachelor’s and master’s degrees tend to be happier, healthier, less likely to commit crime, and less likely to need unemployment benefits. This means the government (and therefore taxpayers) saves money on health care, criminal justice programs, and unemployment insurance.
Then there’s all the money that university visitors brought in for athletic events, commencement, conferences, parents weekends, etc. While in Ohio, visitors spent money on lodging, food, transportation, and other personal expenses, generating $76 million in added income for the state during FY 2016-2017.
For every $1 that students invest in Ohio’s public universities, they receive a cumulative return of $4.60 in future earnings. That’s a nearly 14% rate of return, which is 4% higher than the stock market’s 30-year average annual return.
Students who earn bachelor’s degrees from a public university in Ohio also earn more money over their working lifetime than students with only a high school diploma—$1,179,000 more to be exact.
With the surge in student loan debt and growing disenchantment with higher education, it’s imperative for colleges and universities to use data to show their value. Emsi’s Economic Impact Study is the perfect solution.
“The study provides solid, quantifiable evidence of the value of Ohio’s public institutions of higher education, including the fact that they generate more tax dollars than they collect,” said Jay Gershen, president of The Northeast Ohio Medical University.
“Those who have doubts, and those who have questions, about higher education’s value proposition will benefit from an informed fact-based study that brings awareness of the true value of higher education.”
Emsi has conducted over 1,800 economic impact studies for colleges and universities since 2000. To learn more about us and our EIS, contact Rob Sentz, visit EconomicModeling.com, and follow us on LinkedIn and Twitter.