The economic impact of University System of Georgia institutions on their regional economies in fiscal year 2005: a needs assessment study

The Economic Impact of University System of Georgia
Institutions on Their Regional Economies in FY 2005
February 2006
A Needs Assessment Study Commissioned by
Georgia's Intellectual Capital Partnership Program (ICAPP)
Dr. Jeffrey M. Humphreys, Director Selig Center for Economic Growth
Terry College of Business The University of Georgia

The Economic Impact of University System of Georgia Institutions on their Regional Economies in FY 2005
Executive Summary
The statewide economic impact of the University System of Georgia's 34 institutions in fiscal year 2005 includes:
$9.9 billion in output (sales); $6.1 billion in gross regional product; $4.5 billion in income; and 109,698 full- and part-time jobs (2.8% of all jobs held by Georgians).
These benefits permeate both the private and public sectors of the host communities. For example, for each job created on campus there are 1.6 off-campus jobs that exist because of spending related to the college or university.
These economic impacts were especially significant given the sub-par performance of the state's economy. In both good and bad economic times, continued emphasis on colleges and universities as a pillar of the state's economy translates into jobs, higher incomes, and greater production of goods and services.
In addition to the system-wide impact summarized here, the chapters that follow this summary quantify the economic benefits that each institution conveys to the community in which it is located. Each institution's benefits are estimated for several categories of college/university-related expenditures: Spending by the institutions themselves for salaries and fringe benefits, operating supplies and expenses, and other budgeted expenditures; spending by the students attending the institutions; and spending by the institutions for capital projects.
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1. Introduction
How much does a region benefit economically from hosting an institution of higher education? Traditionally, the benefits are discussed in broad, qualitative terms that often fail to satisfy those who demand tangible evidence of the economic linkages between the academic community and the community as a whole; however, this report quantifies the economic benefits that the University System of Georgia's 34 institutions convey to the communities in which they are located.
The benefits are estimated for three important categories of college/university-related expenditures: Spending by the institutions themselves for salaries and fringe benefits, operating supplies and expenses, and other budgeted expenditures; spending by the students attending the institutions; and spending by the institutions for capital projects (construction). The economic impact estimates are based on regional inputoutput models of each institution's regional economy, certain necessary assumptions, and available data regarding annual spending in the specified categories. Moreover, the emphasis is on funds received by recipients in the region that hosts each college or university. The study reports expenditures and impacts for the 2005 fiscal year (FY 2005) July 1, 2004 through June 30, 2005.
The study does not account for all of the short-term impacts of the 34 institutions on their host communities, however. For example, several sources of college/university-related spending are identified, but no dollar amounts are estimated for them. To do so would require collecting survey data, a task beyond the resources available to this study. The study also does
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not quantify the many long-term benefits flowing to the economic development of the host communities through the presence of an institution of higher education. Neither does the study measure intangible benefits (such as cultural opportunities, intellectual stimulation, and volunteer work) to residents of their host communities. Finally, the study is not a net benefit analysis; it estimates only economic benefits and does not calculate what the presence of a tax-exempt college/university costs the community.
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2. Economic Impact Highlights
In the simplest terms, the total economic impact of all 34 institutions on their host communities was $9.9 billion in FY 2005. The output impact of each institution is the change in regional output that is due to spending by the institution and spending by the students who attend that particular college or university. Of the FY 2005 total, $6.6 billion (66 percent) is initial spending by the institutions and students; $3.3 billion (34 percent) is the induced or respending (multiplier) impact. Dividing the FY 2005 total output impact ($9.9 billion) by initial spending ($6.6 billion) yields an average multiplier value of 1.51. On average, therefore, every dollar of initial spending generates an additional 51 cents for the economy of the region hosting the institution.
In FY 2005, value added comprises $6.1 billion (61 percent) of the $9.9 billion output impact, with domestic and foreign trade comprising the remainding $3.8 billion (39 percent) of the output impact. The $6.1 billion value-added impact reported for FY 2005 equals 1.7 percent of Georgia's gross state product. Labor income received by residents of the communities that host one or more institutions equals $4.5 billion, and represents 73 percent of the value-added impact.
The collective or rolled up employment impact of all 34 institutions on their host communities in FY 2005, including multiplier effects, is 109,698 full- and part-time jobs. Approximately 39 percent of these positions are on-campus jobs at one of the institutions of the University System of Georgia, and 61 percent are off-campus positions in either the private or public sectors. On average, for each job created on campus there
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are 1.6 off-campus jobs that exist because of spending related to the institution. The 109,698 jobs generated by the University System of Georgia account for 2.8 percent of all the jobs in Georgia, or about one job in 36.
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3. Methodology
Understanding the Concept of the Short-Term Economic Impact of a College or University
The total annual economic impact of college- or university-related spending is defined to consist of the net changes in regional output, value added, labor income, and employment that are due to initial spending by the institution, its faculty and staff, and its students. The total economic impact includes the impact of the initial round of spending and the secondary, or indirect and induced spending often referred to as the multiplier effect created as the initial expenditures are respent. Figure 1 provides a schematic representation of impact relationships.
There are two types of secondary spending, indirect spending and induced spending. Indirect spending refers to the changes in interindustry purchases as a region's industries respond to the additional demands triggered by spending by the college or university, its faculty and staff, and its students. It consists of the ripples of activity that are created when an institution and its employees and students purchase goods or services from other industries located in the host community. Induced spending is similar to indirect spending except that it refers to the additional demand triggered by spending by the region's households as their income increases due to changes in production. Basically, the induced impact captures the ripples of activity that are created when households spend more due to increases in their earnings that were generated by the direct and indirect spending.
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The sum of the direct, indirect and induced economic impacts is the total economic impact, often expressed in terms of output (sales, plus or minus inventory), value added (gross regional product), labor income, or employment. Total industry output is gross receipts or sales, plus or minus inventory, or the value of production by industry (including households) for a given period of time. Total output impacts are the most inclusive, largest measures of economic impact. Because of their size, output impacts typically are emphasized in economic impact studies and receive much media attention. One problem with output as a measure of economic impact, however, is that it includes the value of inputs produced by other industries, which means that there inevitably is some double counting of economic activity. The other measures of economic activity (value added, labor income, and employment) are free from double counting and provide a much more realistic measure of the true economic impact of a college or university on its regional economy.
The regional economic areas are the host communities, including the surrounding counties from which employees and students commute. The effects of expenditures that go to persons, businesses, or governments located outside the regions are not included in the value-added, labor income, and employment impact estimates.
The multiplier concept is common to virtually all economic impact studies. Multipliers measure the response of the local economy to a change in demand or production. In essence, multipliers capture the impact of the initial round of spending plus the impacts generated by successive rounds of respending of those initial dollars. The magnitude of a particular multiplier depends upon what proportion of each dollar spent leaves the region during
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each round of spending. Multipliers therefore are unique to the region and to the industry that receives the initial round of spending.
Figure 2 illustrates the successive rounds of spending that might take place if a person buys an item locally. Assume that the amount spent is $100 and that the appropriate regional output multiplier is 2.0. The initial injection of spending to the region is $100, which creates a direct economic impact of $100 to the regional economy. Of that $100, only $50 is respent locally; the rest flows out of the region through non-local taxes, non-local purchases, and income transfers. After the first round of spending, the total economic impact to the region is $150. During the second round of respending, $25 is respent locally and $25 leaks out of the region, a 50 percent leakage. Now, the total economic impact to the region is $175. After seven rounds of respending, less than $1 remains in the local economy, but the total economic impact has reached almost $200. The induced (multiplier effect) impact to the region ($100) equals the total impact ($200) minus the direct impact ($100).
The multiplier traces the flows of respending that take place throughout the region until the initial dollars have completely leaked to other regions. Obviously, multiplier effects within large, self-sufficient areas are likely to be larger than those in small, rural, or specialized areas that are less able to capture spending for necessary goods and services. Multiplier effects also vary greatly from industry to industry, but in general, the greater the interaction with the local economy, the larger the multiplier for that industry. For example, personal services, business services, and entertainment industries have intricate relationships with local supporting industries, and therefore have relatively high multiplier values. Conversely, electric, gas,
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and sanitary services usually are less intertwined with local supporting industries, and their multipliers are lower.
Analytic Approach
Estimating the economic impact of the University System of Georgia institutions on their regional economies in FY 2005 involved four basic steps. First, initial spending (and employment) for each institution were obtained for Budget Unit "A" and Budget Unit "B" of the University System of Georgia FY 2005 Budget; and then the institutional expenditures were allocated to industrial sectors recognized by the economic impact modeling system. Second, spending by students was estimated and then allocated to industrial sectors. Third, expenditures associated with capital projects (construction) funded were obtained for each institution and were allocated to the appropriate industrial sectors. Finally, the IMPLAN Professional Version 2.0 modeling system was used to build regional economic models that are specific to each institution.
The geographic areas corresponding to the regional models that were built for each institution, which include the labor force directly involved in their economic spheres, are reported in Appendix 1. These geographic areas are based on an analysis of commuting patterns data obtained from Census 2000 (Residence County to Workplace County Flows for Georgia, U.S. Census Bureau, Internet Release Date: March 6, 2003).
For analytical purposes, all dollar amounts were converted to inflation-adjusted dollars, but the amounts expressed in this report have been re-inflated to 2005 dollars. Type SAM (social accounting matrices) multipliers from the IMPLAN modeling system were used to estimate the
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economic impacts associated with all categories of spending. Type SAM multipliers capture the original expenditures resulting from the impact, the indirect effects of industries buying from industries, and the induced effects of households' expenditures based on information in the social account matrix. The multipliers account for Social Security and income tax leakage, institutional savings, commuting, inter-institutional transfers, and people-topeople transfers.
Whenever appropriate, the IMPLAN software applied margins to convert purchaser prices to producer prices. In input-output models, all expenditures are in terms of producer prices, which allows all spending to be allocated to the industries that actually produce the good or service. The margins are derived from U.S. Bureau of Economic Analysis data. The margins used differed depending on the consumer. For example, households pay transportation, wholesale, and the full retail margins. In contrast, institutions of higher education may pay little or no retail margin as they have typically more buying power than a household. In addition, some sectors of the model do not have margins. For example, because there usually are no wholesalers or retailers involved when someone rents a room, hotel and lodging do not have margins.
The model's default estimates of the local economy's regional purchase coefficients were used to derive the ratio of locally purchased to imported goods. The regional purchase coefficient represents the proportion of the total demands for a given commodity that is supplied by the region to itself. The regional purchase coefficients were estimated with an econometric equation that predicts local purchases based on each region's unique characteristics. In addition, the entire analysis was conducted using the full range of industrial sectors in order to avoid aggregation bias.
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Initial Spending by the Institutions
Institution-specific data on expenditures for personal services and number of positions were obtained from the Board of Regents for FY 2005. The expenditure amounts were treated as an industry change and are reported in the first column of Tables 1 and 2, respectively. These amounts were allocated to various economic sectors recognized by the IMPLAN software based on the typical expenditure pattern for households of moderate income.
Institution-specific data on expenditures for operating expenses (nonpersonal services) for FY 2005 were obtained from the Board of Regents for FY 2005. These amounts were treated as an industry change and are reported in the first column of Tables 1 and 2, respectively.
To avoid double-counting, the estimates of initial spending do not include expenditures arising from two budgetary classes: auxiliary enterprise funds (self-supporting activities for housing, food service, bookstore, athletics, and other) and student activity funds (cultural and recreational programs operated by students). The spending associated with such activities is included in the student's personal expenditures, however. Expenditures for the Medical College of Georgia do not account for spending by the hospital and clinics operated by MCG Health, Inc. and therefore are not comparable to previously published estimates for the institution.
Since a detailed analysis of spending patterns at each institution was not practical, budgeted expenditures for operating expenses were allocated to various economic sectors based on a typical expenditure pattern estimated for U.S. colleges that was developed by the IMPLAN 2.0 modelers.
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Institution-specific data on capital projects (construction) also were obtained from the Board of Regents. The economic impacts associated with capital projects funded through state appropriations as well as public/private ventures are estimated. In the case of capital projects funded through state appropriations, expenditures were allocated to the fiscal year of reported funding, regardless of whether or not all of the funds were actually spent during fiscal year 2005. In the case of public/private ventures, expenditures were allocated to the fiscal year following the board action date regardless of whether or not all of the funds were actually spent during fiscal year 2005. Due to these considerations as well as the extremely lumpy nature of large capital outlays, these amounts are not emphasized in this report and are not included in the economic impacts expressed in Tables 1-3. The amounts for capital projects and their impacts are reported in Appendix 2, however.
It should be noted that previous editions of this study did not include the impacts of public/private ventures. The FY 2005 capital project impacts therefore are not directly comparable to those for FY 2004 or earlier fiscal years.
Students' Personal Expenditures
The students who attend an educational institution spend significant amounts of money in the local economy as a part of their living expenses, so the dollar value of this spending was estimated. Since a detailed survey of students' spending habits at each institution was not practical, typical expenditure levels per student per semester were estimated based on data obtained from several sources: (1) various annual Consumer Expenditure Surveys conducted by the U.S. Bureau of Labor Statistics (BLS); (2) a
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special BLS study that appeared in the July 2001 issue of the Monthly Labor Review that examined the expenditures of college-age students and nonstudents; and (3) a sample of recent estimated costs of attendance prepared by individual institutions. Although the estimated costs of attendance prepared by individual institutions were not detailed enough to be used in the IMPLAN modeling system, they did provide information that was used to develop a profile of average expenditures for some of the items typically purchased by students.
The Consumer Expenditure Surveys cover consumer units consisting of one person at various income levels, but no recent data are available specifically for college students; therefore, to adapt the data for this study, spending estimates for several categories of goods or services were increased, decreased, or eliminated. For example, compared to a weighted average of consumer units at lower income levels, students' expenditures for books and food consumed away from home were increased substantially, while students' expenditures for grocery stores, cash contributions, insurance and pensions, and health care were reduced. Because expenditures for vacation and travel do not take place locally, such expenditures were eliminated entirely. Additionally, expenditures for tuition were eliminated because of possible double counting. System institutions receive payments from students for tuition, which in turn support the institutions' expenditures, which has already been estimated. After adjustment, the average expenditure per student was estimated at $3,450 for Summer 2004 Semester, at $5,750 for Fall 2004 Semester, and at $5,750 for Winter 2005 Semester.
The final step in estimating students' personal expenditures was to multiply the number of semesters of student spending by the average
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spending per semester. For FY 2005, these amounts are reported in the first column of Tables 1 and 2. The number of semesters of students' spending equals each institution's FTE enrollment as reported in the Semester Enrollment Reports issued by the Board of Regents.
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4. Results
This section describes the economic benefits that the University System of Georgia's 34 institutions conveyed to their host communities in FY 2005. The estimates represent the economic impact of spending by an institution, its faculty and staff, and its students. Based on the methodology and available data described earlier, the IMPLAN modeling system was used to calculate four indicators of impact total output, total value added, total income, and total employment for each category of initial spending. All dollar amounts are reported in 2005 dollars.
Total Initial Spending
For each institution, total initial spending accruing to the institution's regional economy is the combination of three types of spending spending by the institution for personal services, spending by the institution for operating expenses, and spending by students attending the institution. Estimates of initial spending for FY 2005 are reported in the first column of Tables 1 and 2. Spending by the institutions for capital projects is reported in Appendix 2.
For FY 2005, total initial spending for all 34 institutions was $6.6 billion. In FY 2005, spending originating from personal services accounted for 36 percent ($2.4 billion) of initial spending, spending due to operating expenses accounted for 24 percent ($1.6 billion) of initial spending, and students' personal expenditures accounted for 40 percent ($2.7 billion) of initial spending.
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Total Output Impact
The output impact was calculated for each category of initial spending, based on the impact of the first round of spending and the impacts generated by the re-spending of these amounts the multiplier effect. Total output impacts are the most inclusive, largest measures of economic impact. Conceptualized as the equivalent of business revenue, sales, or gross receipts, total output is the value of productions by all industries, including households. Output impacts for FY 2005 are reported in the second column of Tables 1 and 2.
Measured in the simplest and broadest possible terms, the total economic impact of the 34 institutions of the University System of Georgia was $9.9 billion in FY 2005 (Table 1). This amount represents the combined impact of all 34 institutions on their host communities. Of the FY 2005 output impact, $6.6 billion (66 percent) was initial spending by the institutions and students, while $3.3 billion (34 percent) was the induced/respending impact or multiplier effect (i.e., the difference between output impact and initial spending). The multiplier captures the regional economic repercussions of the flows of respending that take place throughout the region until the initial spending has completely leaked to other regions. The average multiplier value for all institutions in FY 2005 was 1.51, obtained by dividing the total output impact ($9.9 billion) by initial spending ($6.6 billion). On average, therefore, every dollar of initial spending generated an additional 51 cents for the economy of the region hosting the institution. Thus, for all institutions, the output impact was 1.51 times greater than their initial spending.
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That the estimates for the various institutions show differing outcomes is not surprising, given the differences in budgets, staffing, enrollment, and regional economies. Institutions located in the largest metropolitan areas (e.g., Atlanta) where multipliers are the highest, or institutions have the largest budgets, staffs, and enrollments had the largest economic impacts. Thus, for the most part, institutions with large initial spending will rank highly on the various indicators of economic impact, including value added, labor income, and employment impact described in the subsections that follow.
Total Value-Added Impact
Because value-added impacts exclude expenditures related to foreign and domestic trade, they provide a much more accurate measure of the actual economic benefits flowing to businesses and households in a region than the more inclusive output impacts. The value-added impacts for FY 2005 are reported in the third column of Tables 1 and 2.
The 34 institutions collectively generated a value-added impact of $6.1 billion in FY 2005. For all institutions combined, the value-added impact equaled 92 percent of initial spending and 61 percent of the $9.9 billion output impact (with domestic and foreign trade comprising the remaining 39 percent of the output impact). The $6.1 billion value-added impact reported for FY 2005 equals 1.7 percent of Georgia's gross state product.
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Labor Income Impacts
Collectively, the 34 University System institutions generated a labor income impact of $4.5 billion in FY 2005. The labor income received by residents of the communities that host University System institutions represents 73 percent of the value-added impact and 68 percent of the initial spending. Labor income for each institution is reported in the fourth column of Table 2.
Employment Impacts
The economic impact of hosting a unit of the University System of Georgia probably is most easily understood in terms of its effects on employment. Collectively, the 34 institutions generated an employment impact of 109,698 jobs in FY 2005. Approximately 39 percent of these positions are on-campus jobs at one of the institutions of the University System of Georgia, and 61 percent are off-campus positions in either the private or public sectors. On average, for each job created on campus there are 1.6 off-campus jobs that exist because of spending related to the University System of Georgia.
The employment impact associated with the University System of Georgia accounts for 2.8 percent of all the jobs held by Georgians, or about one job in 36. For all institutions combined, 16.6 jobs were generated for each million dollars of initial spending in FY 2005.
Employment impacts in FY 2005 for the individual institutions are reported in the fifth column of Table 2.
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5. Limitations and Topics for Future Research
Because the goal of this study was to estimate the economic impact of all 34 institutions, certain necessary assumptions were designed to work well for the average institution, but may lead to an over- or under-estimate of the economic contribution that a specific institution makes to its host community. For example, detailed surveys of actual spending by students at various institutions could help to refine estimates of initial spending by students.
Due to both resource limitations and data limitations, several important types of short-term college or university-related expenditures were not estimated. For example, studies could be conducted to measure (1) spending by visitors to the institutions and (2) spending by retirees who still live in the host communities. Also, it would be worthwhile to investigate expenditures supported by the non-institutional income of each institution's employees. Such income may come from an employee's consulting, investments, and other personal business activities. Moreover, other members of an employee's household often supplement their total household income. Employees' household incomes also can be supplemented via inheritances or gifts. At least a portion of income derived from these sources would not come to the community that hosts the institution if that person's job at the college/university did not exist.
Since this study intentionally focused only on the short-term impacts of several types of college- or university-related spending, there was no attempt to evaluate the long-term impacts of the University System's institutions on the economic development of the host communities and the
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state. After all, colleges and universities not only spend money year by year, but also have long-term impacts on the labor force, local business and industry, and local government.
A college or university improves the skills of its graduates, thereby increasing their productivity and their lifetime earnings. Local businesses benefit from easy access to a large pool of part-time and full-time workers. Moreover, companies and agencies that depend on highly specialized skills often cluster around universities. This may be particularly true of high-tech and information-based companies, which, despite the recent recession and sub-par recovery, are still expected to account for a disproportionately high share of future economic growth.
Finally, the outreach and service units of the college or university provide valuable services to local businesses and households. Cultural and educational programs and facilities often are available to the general public and provide intangible benefits to the host community by improving residents' quality of life.
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6. Summary
The fundamental finding of this study is that each of the University System of Georgia's 34 institutions creates substantial economic impacts in terms of output, value added, labor income, and employment. The combined economic impact of the University System's 34 institutions on their host communities in FY 2005 includes:
$9.9 billion in output (sales); $6.1 billion in value added (gross regional product); $4.5 billion in labor income; and 109,698 full- and part-time jobs.
These economic impacts were especially significant given the substandard performance of the national and state economies in FY 2005. In both good and tough economic times, continued emphasis on higher education as an enduring pillar of the regional economy translates into jobs, higher incomes, and greater production of goods and services for local households and businesses.
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Figure 1 Schematic Representation of Impact Relationships
Direct Expenditures Indirect & Induced Impacts (Multiplier Effects)
Total Economic Impact
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Figure 2
How Multipliers Capture the Impact of Respending Initial Impacts if the Output Multiplier Equals 2.0

$100

$50 -Leakage

$25 -Leakage $50

$25 $12.50 -Leakage $12.50

Initial

1st

2nd

3rd

4th

5th

6th

7th

It

Initial Direct or Indirect Impact: $100 First Round of Respending: $50 respent locally;
Second Round of Respending: $25 respent locally; Third Round of Respending: $12.50 respent locally; Fourth Round of Respending: $6.25 respent locally; Fifth Round of Respending: $3.12 respent locally; Sixth Round of Respending: $1.56 respent locally;
Seventh Round of Respending: $.78 respent locally;

$50 leakage* $25 leakage $12.50 leakage $6.25 leakage $3.12 leakage $1.56 leakage $.78 leakage

____

____

Total Economic Impact: $200 Total Leakage: $100

*Leakage indicates amounts spent outside area and not recirculated locally.

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Table 1
Total Economic Impact of all 34 Institutions of the University System of Georgia on Their Regional Economies in the 2005 Fiscal Year

Total for All 34 Institutions
in 2005
System Total Personal Services Operating Expenses Student Spending

Initial Spending (current dollars)
6,604,968,339 2,394,512,085 1,554,235,704 2,656,220,550

Output Impact (current dollars)
9,941,390,018 4,720,950,694 1,979,135,659 3,241,303,665

Value Added Impact
(current dollars)
6,094,645,930 3,416,807,415
729,990,060 1,947,848,455

Labor Income Impact
(current dollars)
4,474,278,265 2,964,599,409
473,072,668 1,036,606,188

Employment Impact (jobs)
109,698 59,519 11,652 38,527

Notes:
The impacts of spending on Output, Value Added, Labor Income, and Employment were estimated using the IMPLAN Professional System, version 2.0, Type SAM multipliers, and production functions provided by MIG, Inc.
Initial spending for personal services and operating expenses was obtained from the Board of Regents of the University System of Georgia. The author estimated initial spending by students.
Output refers to the value of total production, including domestic and foreign trade. Value added includes employee compensation, proprietary income, other property income, and indirect business taxes. Labor income includes both the total payroll costs (including fringe benefits) of workers who are paid by employers and payments received by self-employed individuals. Employment includes both full-time and part-time jobs.
Estimates for the Medical College of Georgia do not include impacts associated with the hospital and clinics operated by MCG Health Inc.
Source: Selig Center for Economic Growth, Terry College of Business, University of Georgia (www.selig.uga.edu), 2006.

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Table 2
Total Economic Impact of University System of Georgia Institutions on Their Regional Economies in the 2005 Fiscal Year

Institution

Initial Spending (current dollars)

Research Universities and Regional Universities

Georgia Institute of Technology
Personal Services Operating Expenses Student Spending

978,043,516
486,560,373 293,534,793 197,948,350

Georgia State University
Personal Services Operating Expenses Student Spending

656,684,220
245,107,441 121,168,429 290,408,350

Medical College of Georgia
Personal Services Operating Expenses Student Spending

531,224,056
319,358,970 178,401,236
33,463,850

University of Georgia
Personal Services Operating Expenses Student Spending

1,344,679,021
508,441,851 454,680,970 381,556,200

Georgia Southern University
Personal Services Operating Expenses Student Spending

317,743,770
94,496,964 45,226,806 178,020,000

Valdosta State University
Personal Services Operating Expenses Student Spending

199,276,629
57,935,015 27,997,614 113,344,000

State Universities and State Colleges

Albany State University
Personal Services Operating Expenses Student Spending

85,338,738
26,909,989 17,727,949 40,700,800

Armstrong Atlantic State University
Personal Services Operating Expenses Student Spending

122,066,908
34,480,027 19,073,331 68,513,550

Output Impact (current dollars)
1,652,296,917 992,715,792 400,496,957 259,084,168
1,045,507,612 500,085,999 165,321,429 380,100,184
870,932,252 615,077,686 215,917,343
39,937,223
2,055,579,330 1,002,312,695
576,057,977 477,208,658
406,004,713 172,396,122
49,363,284 184,245,307
268,228,942 107,836,348
33,465,712 126,926,882
119,264,794 51,006,656 20,840,015 47,418,123
170,463,019 66,139,114 23,188,018 81,135,887

Value Added Impact
(current dollars)

Labor Income Impact
(current dollars)

Employment Impact (jobs)

1,060,750,862 729,001,528 172,199,277 159,550,057
672,395,283 367,238,492
71,082,262 234,074,529
533,608,652 440,095,805
70,103,552 23,409,295
1,223,105,074 724,553,011 209,571,502 288,980,561
234,503,244 120,045,342
10,750,608 103,707,294
157,374,165 76,157,052 7,935,008 73,282,105

822,021,388 624,974,778 110,718,134
86,328,476
487,189,649 314,834,454
45,703,418 126,651,777
441,971,642 385,488,255
44,180,201 12,303,186
917,800,610 626,902,918 137,850,526 153,047,166
168,688,461 107,838,606
7,318,657 53,531,198
111,351,314 67,713,712 5,346,257 38,291,345

14,828 10,014
2,294 2,520
13,083 8,438 947 3,698
9,346 7,372 1,435
539
20,750 12,117
3,326 5,307
5,555 1,859
306 3,390
3,465 1,358
193 1,914

70,225,557 36,380,094
6,207,085 27,638,378
103,230,402 47,443,076 7,436,119 48,351,207

50,799,221 32,100,605
4,040,130 14,658,486
72,271,575 41,706,296
4,892,628 25,672,651

1,611 816 130 665
2,045 842 149
1,054
(continued)

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Table 2 (continued)
Total Economic Impact of University System of Georgia Institutions on Their Regional Economies in the 2005 Fiscal Year

Institution

Initial Spending (current dollars)

Augusta State University
Personal Services Operating Expenses Student Spending

115,241,623
31,513,318 17,411,255 66,317,050

Clayton State University
Personal Services Operating Expenses Student Spending

106,668,969
29,936,015 16,200,404 60,532,550

Columbus State University
Personal Services Operating Expenses Student Spending

136,863,005
36,931,672 24,914,533 75,016,800

Fort Valley State University
Personal Services Operating Expenses Student Spending

72,895,628
29,369,444 15,140,734 28,385,450

Georgia College & State University
Personal Services Operating Expenses Student Spending

115,743,330
38,318,842 16,231,838 61,192,650

Georgia Southwestern State University 50,802,619

Personal Services

15,061,309

Operating Expenses

10,703,510

Student Spending

25,037,800

Kennesaw State University
Personal Services Operating Expenses Student Spending

338,865,177
88,153,402 62,921,375 187,790,400

North Ga. College & State University
Personal Services Operating Expenses Student Spending

86,882,132
26,492,849 10,210,183 50,179,100

Savannah State University
Personal Services Operating Expenses Student Spending

70,568,559
22,412,234 17,039,625 31,116,700

Output Impact (current dollars)
160,912,248 60,693,891 21,072,680 79,145,677
162,409,226 61,077,632 22,103,726 79,227,868
188,072,396 70,582,377 29,068,945 88,421,074
107,883,130 56,362,125 18,000,572 33,520,433
145,523,102 67,915,505 16,773,405 60,834,192
64,550,699 27,181,007 11,290,970 26,078,722
511,495,436 179,856,972
85,849,519 245,788,945
124,258,739 51,270,255 12,318,023 60,670,461
100,555,788 42,990,838 20,715,579 36,849,371

Value Added Impact
(current dollars)
96,660,487 43,427,241
6,841,830 46,391,416
103,146,573 44,852,401 9,503,807 48,790,365
111,066,703 50,519,382 8,349,116 52,198,205
65,893,374 40,587,339
5,708,310 19,597,725
84,896,648 46,931,312
3,043,542 34,921,794
35,744,000 18,823,517
2,123,192 14,797,291
320,353,573 132,078,820
36,912,202 151,362,551
77,014,763 36,895,251
3,926,235 36,193,277
59,441,133 30,838,297
6,643,237 21,959,599

Labor Income Impact
(current dollars)
66,732,420 38,038,743
4,311,813 24,381,864
70,961,912 38,452,072
6,110,617 26,399,223
77,177,460 44,331,441
5,533,876 27,312,143
49,528,825 35,579,351
3,660,283 10,289,191
62,206,049 42,601,188
1,987,276 17,617,585
25,864,493 16,940,222
1,420,520 7,503,751
218,862,551 113,230,866
23,733,260 81,898,425
53,913,449 32,188,403
2,591,930 19,133,116
43,140,013 27,109,354
4,370,948 11,659,711

Employment Impact (jobs)
2,406 1,198
140 1,068
1,732 834 127 771
2,598 1,270
177 1,151
1,389 825 114 450
1,982 903 68
1,011
789 331
57 401
4,631 1,748
492 2,391
1,422 612 73 737
1,177 565 133 479
(continued)

26

Table 2 (continued)
Total Economic Impact of University System of Georgia Institutions on Their Regional Economies in the 2005 Fiscal Year

Institution

Initial Spending (current dollars)

Southern Polytechnic State University
Personal Services Operating Expenses Student Spending

72,371,633
23,636,517 9,320,016
39,415,100

University of West Georgia
Personal Services Operating Expenses Student Spending

190,554,019
52,903,879 28,816,440 108,833,700

Dalton State College
Personal Services Operating Expenses Student Spending

61,041,584
14,733,139 10,167,395 36,141,050

Macon State College Personal Services Operating Expenses Student Spending
Associate Degree Colleges

93,598,109
20,965,149 18,525,460 54,107,500

Abraham Baldwin Agricultural College
Personal Services Operating Expenses Student Spending

57,976,277
13,632,306 10,460,371 33,883,600

Atlanta Metropolitan College
Personal Services Operating Expenses Student Spending

33,510,039
9,253,630 5,628,709 18,627,700

Bainbridge College
Personal Services Operating Expenses Student Spending

41,762,692
7,169,630 9,557,562 25,035,500

Coastal Georgia Community College
Personal Services Operating Expenses Student Spending

45,812,098
11,179,865 8,624,983
26,007,250

Output Impact (current dollars)
112,529,454 48,224,938 12,716,170 51,588,346
289,701,987 107,938,336
39,316,964 142,446,687
77,877,392 27,300,449 11,489,855 39,087,088
125,758,349 40,084,956 21,941,353 63,732,040
72,040,370 25,066,297 11,591,409 35,382,664
50,940,517 18,879,928
7,679,774 24,380,815
48,912,123 12,864,149 10,234,615 25,813,359
59,078,601 20,576,383
9,645,469 28,856,749

Value Added Impact
(current dollars)
72,650,814 35,414,016
5,467,495 31,769,303
183,891,455 79,264,591 16,904,879 87,721,985
45,522,862 19,362,863
3,070,799 23,089,200
72,635,962 28,721,192
6,836,701 37,078,069

Labor Income Impact
(current dollars)
51,065,492 30,360,521
3,515,409 17,189,562
126,287,106 67,953,725 10,869,248 47,464,133
31,393,908 17,213,666
2,063,827 12,116,415
49,087,426 25,239,564
4,369,607 19,478,255

Employment Impact (jobs)
1,248 673 73 502
3,515 1,904
225 1,386
929 328
67 534
1,520 507 138 875

40,681,250 17,663,511
2,693,922 20,323,817
32,180,787 13,864,488
3,302,026 15,014,273
26,117,205 8,935,822 2,138,011
15,043,372
34,152,621 14,586,984
2,462,816 17,102,821

28,033,624 15,763,060
1,780,813 10,489,751
22,132,988 11,886,059
2,123,088 8,123,841
17,148,541 8,044,385 1,366,587 7,737,569
23,536,096 12,978,566
1,625,227 8,932,303

941 310
67 564
510 229
44 237
672 190
53 429
769 279
58 432
(continued)

27

Table 2 (continued)
Total Economic Impact of University System of Georgia Institutions on Their Regional Economies in the 2005 Fiscal Year

Institution

Initial Spending (current dollars)

Darton College
Personal Services Operating Expenses Student Spending

66,957,744
15,440,723 11,315,321 40,201,700

East Georgia College
Personal Services Operating Expenses Student Spending

23,434,050
4,749,503 4,752,297 13,932,250

Gainesville College
Personal Services Operating Expenses Student Spending

82,288,252
16,440,646 9,295,206
56,552,400

Ga. Highlands College (formerly Floyd) 53,099,326

Personal Services Operating Expenses Student Spending

12,665,728 6,374,048
34,059,550

Georgia Perimeter College
Personal Services Operating Expenses Student Spending

313,382,095
69,133,079 49,192,916 195,056,100

Gordon College
Personal Services Operating Expenses Student Spending

53,665,730
10,761,603 8,033,827
34,870,300

Middle Georgia College
Personal Services Operating Expenses Student Spending

47,333,763
10,814,004 9,122,159
27,397,600

Output Impact (current dollars)
89,405,518 29,267,187 13,301,678 46,836,653
28,741,628 8,724,338 5,273,338
14,743,952
114,922,360 32,327,123 11,830,335 70,764,902
69,457,472 23,950,421
7,455,764 38,051,287
463,467,474 141,050,325
67,118,498 255,298,651
78,557,802 21,956,603 10,961,302 45,639,897
57,429,607 19,742,501
9,749,091 27,938,015

Value Added Impact
(current dollars)
52,135,880 20,874,589
3,961,832 27,299,459
15,607,679 6,105,308 1,241,616 8,260,755
70,668,803 23,378,302
4,351,446 42,939,055
41,318,930 17,028,107
2,249,437 22,041,386
289,657,790 103,580,404
28,858,537 157,218,849
48,942,922 16,123,847
4,712,965 28,106,110
31,725,808 13,800,335
1,982,855 15,942,618

Labor Income Impact
(current dollars)
35,476,507 18,419,054
2,578,717 14,478,736
10,558,875 5,465,072 830,416 4,263,387
45,893,249 20,229,339
2,868,555 22,795,355
27,718,464 15,014,642
1,399,069 11,304,753
192,421,888 88,799,732 18,555,034 85,067,122
32,060,786 13,823,013
3,030,272 15,207,501
21,980,942 12,407,301
1,371,869 8,201,772

Employment Impact (jobs)
1,152 412 83 657
440 142
33 265
1,357 522 68 767
1,015 418 45 552
4,575 1,707
384 2,484
780 273
63 444
773 270
52 451
(continued)

28

Table 2 (continued)
Total Economic Impact of University System of Georgia Institutions on Their Regional Economies in the 2005 Fiscal Year

Institution
South Georgia College Personal Services Operating Expenses Student Spending
Waycross College Personal Services Operating Expenses Student Spending

Initial Spending (current dollars)
24,974,903 6,055,183 4,320,470
14,599,250
13,618,125 3,497,786 2,143,939 7,976,400

Output Impact (current dollars)
31,303,639 11,089,172
4,660,478 15,553,989
17,327,383 6,406,575 2,325,412 8,595,396

Value Added Impact
(current dollars)
17,526,160 7,759,191 934,741 8,832,228
9,818,510 4,475,906
483,098 4,859,506

Labor Income Impact
(current dollars)
12,153,731 6,958,393 630,054 4,565,284
6,847,607 4,012,050
324,402 2,511,155

Employment Impact (jobs)
440 156
25 259
253 97 13
143

Notes:
The impacts of spending on Output, Value Added, Labor Income, and Employment were estimated using the IMPLAN Professional System, version 2.0, Type SAM multipliers, and production functions provided by MIG, Inc.
Initial spending for personal services and operating expenses was obtained from the Board of Regents of the University System of Georgia. The author estimated initial spending by students.
Output refers to the value of total production, including domestic and foreign trade. Value added includes employee compensation, proprietary income, other property income, and indirect business taxes. Labor income includes both the total payroll costs (including fringe benefits) of workers who are paid by employers and payments received by self-employed individuals. Employment includes both full-time and part-time jobs.
Estimates for the Medical College of Georgia do not include impacts associated with the hospital and clinics operated by MCG Health Inc.
Source: Selig Center for Economic Growth, Terry College of Business, University of Georgia (www.selig.uga.edu), 2006.

29

Table 3

On-Campus and Off-Campus Jobs that Exist Due to Institution-Related Spending
in the 2005 Fiscal Year

Institution

Total Employment Impact

On-Campus Jobs

Off-Campus Jobs that Exist Due to Institution-Related
Spending

System Total

109,698

42,422

67,276

Research Universities and Regional Universities

Georgia Institute of Technology Georgia State University Medical College of Georgia University of Georgia Georgia Southern University Valdosta State University

14,828 13,083
9,346 20,750
5,555 3,465

6,471 6,653 4,920 8,631 1,241
940

8,357 6,430 4,426 12,119 4,314 2,525

State Universities and State Colleges

Albany State University Armstrong Atlantic State University Augusta State University Clayton State University Columbus State University Dalton State College Fort Valley State University Georgia College & State University Georgia Southwestern State University Kennesaw State University Macon State College North Georgia College & State University Savannah State University Southern Polytechnic State University University of West Georgia

1,611 2,045 2,406 1,732 2,598
929 1,389 1,982
789 4,631 1,520 1,422 1,177 1,248 3,515

623 584 956 616 1,001 237 605 718 248 1,106 351 424 398 501 1,519

988 1,461 1,450 1,116 1,597
692 784 1,264 541 3,525 1,169 998 779 747 1,996

Associate Degree Colleges

Abraham Baldwin Agricultural College Atlanta Metropolitan College Bainbridge College Coastal Georgia Community College Darton College East Georgia College Gainesville College Georgia Highlands College (formerly Floyd) Georgia Perimeter College Gordon College Middle Georgia College South Georgia College Waycross College

941 510 672 769 1,152 440 1,357 1,015 4,575 780 773 440 253

220 162 151 205 302 110 411 328 1,203 195 200 117
75

721 348 521 564 850 330 946 687 3,372 585 573 323 178

Notes:
Employment includes both full-time and part-time jobs.
Estimates for the Medical College of Georgia do not include impacts associated with the hospital and clinics operated by MCG Health Inc.
Source: Selig Center for Economic Growth, Terry College of Business, University of Georgia (www.selig.uga.edu), 2006.

30

Appendix 1
Study Areas for Institutions
Research and Regional Universities
Georgia Institute of Technology Atlanta MSA Georgia State University Atlanta MSA Medical College of Georgia Richmond, Columbia, Burke, McDuffie, Jefferson, Lincoln, Warren, and Glascock University of Georgia Clarke, Oconee, Madison, Oglethorpe, Jackson, Barrow, Walton, and Gwinnett Georgia Southern University Bulloch, Screven, Candler, Jenkins, Evans, Tattnall, and Emanuel Valdosta State University Lowndes, Brooks, Lanier, Echols, Cook, and Berrien
State Universities and State Colleges
Albany State University Dougherty, Lee, Worth, Mitchell, Terrell, Colquitt, Baker, Sumter, Calhoun, and Tift Armstrong Atlantic State University Chatham, Effingham, Bryan, Liberty, and Bulloch Augusta State University Richmond, Columbia, Burke, McDuffie, Jefferson, Lincoln, Warren, and Glascock Clayton State University Atlanta MSA Columbus State University Muscogee, Harris, Chattahoochee, Marion, Talbot, Stewart, Troup, Meriwether Dalton State College Whitfield, Murray, Catoosa, Gordon, Walker, and Gilmer Fort Valley State University Peach, Houston, Bibb, Crawford, Macon, and Taylor Georgia College & State University Baldwin, Hancock, Putnam, Wilkinson, Jones, and Washington Georgia Southwestern State University Sumter, Schley, Macon, Lee, Crisp, Marion, Webster, and Dooly Kennesaw State University Atlanta MSA Macon State College Bibb, Houston, Jones, Monroe, Peach, Crawford, Twiggs, Baldwin, Wilkinson, and Laurens North Georgia College & State University Lumpkin, Hall, Dawson, White, Forsyth, and Union Savannah State University Chatham, Effingham, Bryan, Liberty, and Bulloch Southern Polytechnic State University Atlanta MSA University of West Georgia Atlanta MSA
Associate Degree Colleges
Abraham Baldwin Agricultural College Tift, Berrien, Worth, Colquitt, Irwin, Cook, and Turner Atlanta Metropolitan College Atlanta MSA Bainbridge College Decatur, Seminole, Miller, Grady, Early, Mitchell, and Baker Coastal Georgia Community College Glynn, Brantley, McIntosh, Camden, and Wayne Darton College Dougherty, Lee, Worth, Mitchell, Terrell, Colquitt, Baker, Sumter, Calhoun, and Tift East Georgia College Emanuel, Candler, Bulloch, Johnson, Jefferson, Toombs, Treutlen, and Jenkins Gainesville College Hall, Gwinnett, Jackson, White, Habersham, Lumpkin, Banks, and Forsyth Georgia Highlands College Floyd, Polk, Chattooga, Bartow, and Gordon Georgia Perimeter College Atlanta MSA Gordon College Atlanta MSA Middle Georgia College Bleckley, Dodge, Pulaski, Twiggs, and Laurens South Georgia College Coffee, Atkinson, Bacon, Jeff Davis, Ware, Telfair, Ben Hill, and Irwin Waycross College Ware, Pierce, Brantley, Bacon, Coffee, Clinch, and Atkinson
Note:
Study areas were defined by the author based on commuting data obtained from the Residence County to Workplace County Flows for Georgia, U.S. Census Bureau, Internet Release date March 6, 2003.
Source: Selig Center for Economic Growth, Terry College of Business, University of Georgia (www.selig.uga.edu), 2006.
31

Appendix 2

Economic Impact of Capital Outlays in Fiscal Year 2005

Institution

Initial Spending (2005 dollars)

Output Impact (2005 dollars)

Value Added Impact
(2005 dollars)

Labor Income Impact
(2005 dollars)

Employment Impact (jobs)

System Total

420,475,000

716,318,737

348,234,099

297,398,477

8,131

Research Universities and Regional Universities

Georgia Institute of Technology

2,000,000

3,432,037

2,398,574

1,739,094

31

Georgia State University

7,710,000

14,283,573

8,342,073

6,682,949

137

Medical College of Georgia

0

0

0

0

0

University of Georgia

46,680,000

85,109,311

44,659,470

37,961,052

886

Georgia Southern University

40,900,000

60,565,971

23,997,058

21,501,406

852

Valdosta State University

35,590,000

56,189,266

23,601,672

20,430,275

720

State Universities and State Colleges

Albany State University

0

Armstrong Atlantic State University

4,365,000

Augusta State University

35,060,000

Clayton State University

3,600,000

Columbus State University

4,500,000

Dalton State College

0

Fort Valley State University

795,000

Georgia College & State University 33,125,000

Georgia Southwestern State University 4,635,000

Kennesaw State University

63,170,000

Macon State College

6,060,000

North Georgia College & State University

0

Savannah State University

4,975,000

Southern Polytechnic State University

0

University of West Georgia

50,075,000

0 7,333,941 57,700,041 6,937,000 7,133,493
0 1,243,645 45,957,206 6,621,422 121,705,380 10,290,605
0 8,398,641
0 96,476,126

0 3,394,265 27,485,283 3,619,718 3,235,353
0 867,554 18,938,926 2,791,893 64,332,396 5,134,442
0 3,965,037
0 50,996,432

0 2,921,424 22,625,008 3,011,633 2,837,595
0 637,115 17,227,139 2,560,185 54,660,712 4,270,329
0 3,471,911
0 43,329,666

0 86 698 68 89
0 14 577 87 1,204 127
0 102
0 955

Associate Degree Colleges

Abraham Baldwin Agricultural College 4,715,000

7,167,806

3,004,679

2,666,404

97

Atlanta Metropolitan College

0

0

0

0

0

Bainbridge College

1,035,000

1,439,245

539,650

487,515

20

Coastal Georgia Community College 4,790,000

7,232,115

3,132,758

2,797,787

97

Darton College

4,845,000

8,279,381

3,898,809

3,377,437

102

East Georgia College

4,850,000

7,351,520

3,040,061

2,717,594

100

Gainesville College

4,200,000

6,645,146

4,337,262

2,587,012

81

Georgia Highlands College

3,950,000

6,217,947

2,684,073

2,355,467

79

Georgia Perimeter College

10,990,000

21,173,692

11,192,227

9,509,596

210

Gordon College

16,135,000

30,375,264

15,777,142

13,233,125

293

Middle Georgia College

21,725,000

31,058,963

12,867,292

11,799,047

419

South Georgia College

0

0

0

0

0

Waycross College

0

0

0

0

0

Notes:
The impacts of spending on Output, Value Added, Labor Income, and Employment were estimated using the IMPLAN Professional System, version 2.0, Type SAM multipliers, and production functions provided by MIG, Inc.
Initial spending for capital projects was obtained from the Board of Regents of the University System of Georgia.
Output refers to the value of total production, including domestic and foreign trade. Value added includes employee compensation, proprietary income, other property income, and indirect business taxes. Labor income includes both the total payroll costs (including fringe benefits) of workers who are paid by employers and payments received by self-employed individuals. Employment includes both full-time and part-time jobs.
Estimates for the Medical College of Georgia do not include impacts associated with the hospital and clinics operated by MCG Health Inc.
Source: Selig Center for Economic Growth, Terry College of Business, University of Georgia (www.selig.uga.edu), 2006.

32

ICAPP Intellectual Capital Partnership Program The Economic Development Program of the University System of Georgia
www.icapp.org
33