The economic impact of University System of Georgia institutions on their regional economies in fiscal year 2008: a needs assessment study

The Economic Impact of University System of Georgia
Institutions on their Regional Economies in FY 2008
March 2009
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 2008

Executive Summary
The statewide economic impact of the University System of Georgia's 35 institutions in fiscal year 2008 includes:
$12.1 billion in output (sales); $7.3 billion in gross regional product (value added); $5.3 billion in labor income; and 108,405 full- and part-time jobs (2.6 percent of all jobs in Georgia). 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 offcampus jobs that exist because of spending related to the college or university. These economic impacts demonstrate that 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 following chapters 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 (personal services), operating supplies and expenses, and other budgeted expenditures; spending by the students who attend 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 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 who attend 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 on annual spending in the specified categories. Moreover, the emphasis is on funds received by residents in the region that hosts each college or university. The study reports expenditures and impacts for the 2008 fiscal year--July 1, 2007 through June 30, 2008.
The study does not account for all of the short-term impacts of the 35 institutions on their host communities, however. For example, there are no dollar amounts estimated for several sources of college/university-related spending because doing so would require collecting survey data, a task beyond the resources available to this study. In addition, the study neither quantifies the many long-term benefits that an institution of higher education imparts to the host community's economic development nor does it measure intangible benefits (such as cultural opportunities, intellectual stimulation, and volunteer work) to local residents. 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 35 institutions on their host communities was $12.1 billion in FY 2008. 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 2008 total, $8.0 billion (66 percent) is initial spending by the institutions and students; $4.1 billion (34 percent) is the induced or re-spending (multiplier) impact. Dividing the FY 2008 total output impact ($12.1 billion) by initial spending ($8.0 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 that hosts the institution.
In FY 2008, value added comprises $7.3 billion (61 percent) of the $12.1 billion output impact, with domestic and foreign trade comprising the remaining $4.8 billion (39 percent). The $7.3 billion value-added impact equals 1.8 percent of Georgia's state GDP in 2008. Labor income received by residents of the communities that host one or more institutions equals $5.3 billion, and represents 72 percent of the value-added impact.
The collective or rolled-up employment impact of all 35 institutions on their host communities in FY 2008, including multiplier effects, is 108,405 full- and part-time jobs. Approximately 39 percent of these positions are on campus (University System employees) 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 institution. The 108,405 jobs generated by the University System account for 2.6 percent of all the jobs in Georgia in 2008, or about one job in thirty-eight.
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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 (for operations as well as personnel services) and its students. The total economic impact includes the impact of the initial round of spending and the secondary, or indirect and induced spending--referred to as the multiplier effect--that occurs when the initial expenditures are re-spent. Figure 1 provides a schematic representation of impact relationships.
Indirect spending refers to the changes in inter-industry 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.
The sum of the direct, indirect, and induced economic impacts is the total economic impact, which is 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 people, businesses, or governments located
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outside the regions are not included in the value-added, labor income, and employment impact estimates.
The multiplier concept is common to most 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 re-spending of those initial dollars. The magnitude of a particular multiplier depends upon what proportion of each spent dollar leaves the region during 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 occur 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 re-spent 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 re-spending, $25 is re-spent 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 re-spending that occur 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, 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 2008 involved four basic steps. First, initial spending (and employment) for each institution were obtained for Budget Unit "A" and Budget Unit "B"; and then the institutional
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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 inflationadjusted dollars, but the amounts expressed in this report have been reinflated to 2008 dollars. Type SAM (social accounting matrices) multipliers from the IMPLAN modeling system were used to estimate the 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 allow 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. Moreover, margins were selected according to type of consumer to which these applied. 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 instance, because there usually are no wholesalers or retailers involved when someone rents a room, hotels and other 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
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characteristics. In addition, the entire analysis was conducted using the full range of industrial sectors in order to avoid aggregation bias.
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 2008. 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 2008 were obtained from the Board of Regents for FY 2008. 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 operating by MCG Health, Inc., which became a not-for-profit corporation in July 2000.
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.
Institution-specific data on capital projects (construction) also were obtained from the Board of Regents. The 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 2008. Therefore, the amounts for capital expenditures and their impacts are not included in the economic impacts expressed in Tables 1-3, but they are reported in Appendix 2.
It should be noted that some previous editions of this study did not include the impacts of public/private ventures. The FY 2008 capital project impacts therefore are not directly comparable to those for FY 2004 or earlier fiscal years.
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Students' Personal Expenditures
College students 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) annual Consumer Expenditure Surveys conducted by the U.S. Bureau of Labor Statistics (BLS); (2) a special BLS study that appeared in the July 2001 issue of the Monthly Labor Review that examined the expenditures of college-age students and non-students; 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 for a profile of average expenditures for some of the items typically purchased by students.
Although the Consumer Expenditure Surveys cover households consisting of one person at various income levels, 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 lower-income households, students' expenditures for books and for eating out were increased substantially, while students' expenditures for groceries, cash contributions, insurance and pensions, and health care were reduced. Because spending for vacation and travel do not take place locally, these expenditures were eliminated entirely. In addition, expenditures for tuition were eliminated because of possible double counting. 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 by semester was estimated at $3,816 for Summer 2007, $6,360 for Fall 2007, and at $6,360 for Spring 2008.
The final step in estimating students' personal expenditures was to multiply the number of semesters of student spending by the average spending per semester. For FY 2008, 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 Report 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 35 institutions conveyed to their host communities in FY 2008. 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 2008 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 that institution's students. Estimates of initial spending for FY 2008 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 2008, total initial spending for all 35 institutions was $8.0 billion. Spending originating from personal services accounted for 36 percent ($2.9 billion) of initial spending, spending due to operating expenses accounted for 24 percent ($1.9 billion) of initial spending, and students' personal expenditures accounted for 40 percent ($3.2 billion) of initial spending.
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 2008 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 35 institutions of the University System of Georgia was $12.1 billion in FY 2008 (Table 1). This amount represents the combined impact of all 35 institutions on their host communities. Of the FY 2008 output impact, $8.0 billion (66 percent) was initial spending by the institutions and students, while $4.1 billion (34 percent) was the induced/re-spending impact or multiplier effect (i.e., the difference between output impact and initial
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spending). The multiplier captures the regional economic repercussions of the flows of re-spending 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 2008 was 1.51, obtained by dividing the total output impact ($12.112 billion) by initial spending ($8.041 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.
It is no surprise that estimates for the various institutions show differing outcomes, 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 that 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 valueadded, labor income, and employment impact described in the following subsections.
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 2008 are reported in the third column of Tables 1 and 2.
The 35 institutions collectively generated a value-added impact of $7.3 billion in FY 2008. For all institutions combined, the value-added impact equaled 91 percent of initial spending and 61 percent of the $12.1 billion output impact (with domestic and foreign trade comprising the remaining 39 percent of the output impact). The $7.3 billion value-added impact reported for FY 2008 equals 1.8 percent of Georgia's gross state product.
Labor Income Impact
Collectively, the 35 University System institutions generated a labor income impact of $5.3 billion in FY 2008. The labor income received by residents of the communities that host University System institutions represents 72 percent of the value-added impact and 66 percent of the initial spending. Labor income for each institution is reported in the fourth column of Table 2.
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Employment Impact The economic impact of hosting an institution of the University System
of Georgia probably is most easily understood in terms of its effects on employment. Collectively, the 35 institutions generated an employment impact of 108,405 jobs in FY 2008. 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 accounts for 2.6 percent of all the jobs held by Georgians, or about one job in 39. For all institutions combined, 13.5 jobs were generated for each million dollars of initial spending in FY 2008.
Employment impacts in FY 2008 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 35 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 instance, studies could be conducted to measure spending by visitors to the institutions and 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 the 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 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 35 institutions creates substantial economic impacts in terms of output, value added, labor income, and employment. The combined economic impact of the University System's 35 institutions on their host communities in FY 2008 includes: $12.1 billion in output (sales); $7.3 billion in valued added (gross regional product); $5.3 billion in labor income; and 108,405 full- and part-time jobs. These economic impacts demonstrate that 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

Impact

Initial Direct or Indirect Impact: $100 First Round of Re-spending: $50 re-spent locally, $50 leakage*
Second Round of Re-spending: $25 re-spent locally, $25 leakage Third Round of Re-spending: $12.50 re-spent locally; $12.50 leakage Fourth Round of Re-spending: $6.25 re-spent locally; $6.25 leakage Fifth Round of Re-spending: $3.12 re-spent locally; $3.12 leakage Sixth Round of Re-spending: $1.56 re-spent locally; $1.56 leakage
Seventh Round of Re-spending: $.78 re-spent locally; $.78 leakage

____

____

Total Economic Impact: $200 Total Leakage:$100

*Leakage indicates amounts spent outside area and not re-circulated locally.

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Table 1
Total Economic Impact of all 35 Institutions of the University System of Georgia on their Regional Economies in the 2008 Fiscal Year

Total for All Institutions
in 2008
System Total Personal Services Operating Expenses Student Spending

Initial Spending (current dollars)
8,040,726,392 2,920,067,946 1,914,666,398 3,205,992,048

Output Impact (current dollars)
12,112,060,651 5,716,566,661 2,450,306,233 3,945,187,757

Value Added Impact
(current dollars)
7,336,916,224 4,168,432,917
874,501,986 2,293,981,321

Labor Income Impact
(current dollars)
5,280,268,032 3,555,374,994
549,588,546 1,175,304,492

Employment Impact (jobs)
108,405 58,625 11,824 37,956

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 were 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 incl udes 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.
Personal Services includes all expenditures for salaries and wages to all employees and persons in the employ of the various departments, boards, commissions, institutions, and other governmental units. Also includes the employer's share of payments for FICA, retirement, group insurance, or other employer payments for employee benefits. Source: University System of Georgia Business Procedures Manual, Section 2.9.1
Expenditures and impacts for the Medical College of Georgia are not comparable to previously published estimates. See the text for details.
Source: Selig Center for Economic Growth, Terry College of Business, University of Georgia (www. selig.uga.edu), March 16, 2009.

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Table 2
Total Economic Impact of University System of Georgia Institutions on their Regional Economies in the 2008 Fiscal Year

Institution

Initial Spending (current dollars)

Research Universities and Regional Universities

Output Impact (current dollars)

Georgia Institute of Technology
Personal Services Operating Expenses Student Spending

1,230,577,646
578,595,899 411,068,763 240,912,984

2,047,259,498
1,169,849,754 558,565,998 318,843,746

Georgia State University
Personal Services Operating Expenses Student Spending

833,452,859
289,291,144 214,461,859 329,699,856

1,312,676,376
584,911,102 291,413,758 436,351,516

Medical College of Georgia
Personal Services Operating Expenses Student Spending

633,231,323
372,583,528 219,179,323
41,468,472

1,026,278,818
709,941,195 267,042,768
49,294,855

University of Georgia
Personal Services Operating Expenses Student Spending

1,411,335,413
606,080,246 377,279,319 427,975,848

2,226,435,426
1,191,945,833 488,535,423 545,954,170

Georgia Southern University
Personal Services Operating Expenses Student Spending

390,884,686
118,327,589 64,480,793
208,076,304

506,313,282
215,847,120 71,540,197
218,925,965

Valdosta State University Personal Services Operating Expenses Student Spending
State Universities

242,796,569
71,344,883 34,269,030 137,182,656

326,149,842
132,268,432 38,637,480
155,243,930

Albany State University
Personal Services Operating Expenses Student Spending

107,464,330
33,122,621 23,643,605 50,698,104

147,336,632
62,391,099 27,599,780 57,345,753

Armstrong Atlantic State University
Personal Services Operating Expenses Student Spending

144,844,706
41,354,317 25,663,069 77,827,320

205,539,319
79,172,352 31,944,231 94,422,736

Value Added Impact
(current dollars)

Labor Income Impact
(current dollars)

Employment Impact (jobs)

1,280,214,058 863,626,462 226,936,128 189,651,468
809,745,929 431,803,065 118,396,596 259,546,268
630,603,837 513,809,757
88,677,852 28,116,228
1,364,039,558 869,215,209 173,422,865 321,401,48 4
286,836,607 151,729,294
16,259,896 118,847,417
191,738,192 94,414,574 9,382,222 87,941,396

966,944,786 727,603,090 140,986,849
98,354,847
571,951,191 363,792,983
73,555,334 134,602,874
512,360,051 443,231,929
54,788,971 14,339,151
1,016,539,584 738,840,862 112,861,428 164,837,294
202,419,102 133,586,510
9,996,585 58,836,007
132,140,744 82,248,871 5,986,068 43,905,805

15,294 9,851 2,711 2,732
11,379 6,226 1,415 3,738
8,693 6,802 1,389
502
19,415 12,126
2,375 4,914
5,470 2,383
315 2,772
3,317 1,443
167 1,707

84,410,405 44,739,588 7,207,048 32,463,769
122,622,083 57,417,243 10,400,376 54,804,464

60,272,302 38,892,944 4,687,284 16,692,074
83,746,409 49,421,445 6,480,175 27,844,789

1,597 811 138 648
2,012 928 159 925
(continued)

Table 2 (continued)
Total Economic Impact of University System of Georgia Institutions on their Regional Economies in the 2008 Fiscal Year

Institution

Initial Spending (current dollars)

Output Impact (current dollars)

Augusta State University
Personal Services Operating Expenses Student Spending

136,022,836
38,872,107 20,605,585 76,545,144

190,165,980
74,069,058 25,105,342 90,991,580

Clayton State University
Personal Services Operating Expenses Student Spending

130,348,713
35,809,610 25,730,263 68,808,840

198,432,461
72,402,625 34,962,643 91,067,193

Columbus State University
Personal Services Operating Expenses Student Spending

164,242,085
48,396,536 27,726,477 88,119,072

224,212,623
90,748,124 32,035,726 101,428,773

Fort Valley State University
Personal Services Operating Expenses Student Spending

87,407,146
32,343,845 22,683,269 32,380,032

126,910,296
61,691,628 26,895,287 38,323,381

Georgia College & State University
Personal Services Operating Expenses Student Spending

151,978,578
48,254,916 25,171,302 78,552,360

190,804,985
86,170,120 26,591,208 78,043,657

Georgia Southwestern State University 60,266,614

Personal Services

18,332,427

Operating Expenses Student Spending

13,099,219 28,834,968

77,171,033
33,275,300 14,204,886 29,690,847

Kennesaw State University
Personal Services Operating Expenses Student Spending

432,055,384
122,491,810 61,381,110
248,182,464

659,533,635
247,663,373 83,405,513
328,464,749

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

115,408,702
34,379,522 17,556,380 63,472,800

164,660,846
65,820,821 21,586,256 77,253,769

Savannah State University
Personal Services Operating Expenses Student Spending

89,124,304
26,370,616 23,315,328 39,438,360

127,356,053
50,486,234 29,021,870 47,847,949

Value Added Impact
(current dollars)
113,841,963 53,606,418 8,336,821 51,898,724
121,822,730 53,450,303 14,204,744 54,167,683
130,544,725 65,273,862 8,349,280 56,921,583
74,332,143 44,719,569 7,786,192 21,826,382
109,379,356 60,540,885 5,451,355 43,387,116
42,393,914 23,289,337 2,696,647 16,407,930
412,094,712 1 82,834,285
33,886,282 195,374,145
99,459,689 47,788,363 7,068,856 44,602,470
73,834,173 36,613,543 9,448,916 27,771,714

Labor Income Impact
(current dollars)
77,861,906 46,242,944 5,150,845 26,468,117
81,948,432 45,031,745 8,824,871 28,091,816
91,634,685 56,878,250 5,586,608 29,169,827
54,784,476 38,629,295 4,987,222 11,167,959
78,352,091 53,605,012 3,179,340 21,567,739
30,594,380 20,558,573 1,792,464 8,243,343
276,412,361 154,037,420
21,052,267 101,322,674
68,399,933 41,019,870 4,699,981 22,680,082
51,512,290 31,514,822 5,887,348 14,110,120

Employment Impact (jobs)
1,974 917 131 926
1,674 724 170 780
2,388 1,192
148 1,048
1,283 747 130 406
1,960 940 93 927
778 349
58 371
5,880 2,661
405 2,814
1,559 679 106 774
1,168 555 144 469
(continued)

19

Table 2 (continued)
Total Economic Impact of University System of Georgia Institutions on their Regional Economies in the 2008 Fiscal Year

Institution

Initial Spending (current dollars)

Output Impact (current dollars)

Southern Polytechnic State University 105,132,117

Personal Services

30,315,999

Operating Expenses Student Spending

22,234,182 52,581,936

161,098,522
61,295,221 30,212,111 69,591,190

University of West Georgia Personal Services Operating Expenses Student Spending
State Colleges

227,326,185
63,545,064 35,360,001 128,421,120

346,490,877
128,480,304 48,047,661
169,962,912

Abraham Baldwin Agricultural College
Personal Services Operating Expenses Student Spending

70,341,318
16,616,427 12,928,035 40,796,856

87,000,067
30,464,269 14,244,549 42,291,249

Dalton State College
Personal Services Operating Expenses Student Spending

77,781,620
19,025,724 12,170,168 46,585,728

96,010,983
34,506,214 13,072,478 48,432,291

Gainesville State College
Personal Services Operating Expenses Student Spending

127,337,889
24,555,330 19,731,135 83,051,424

180,103,503
48,353,029 25,591,536 106,158,938

Georgia Gwinnett College
Personal Services Operating Expenses Student Spending

34,535,383
16,180,439 9,041,360 9,313,584

57,326,734
32,714,857 12,285,526 12,326,351

Gordon College
Personal Services Operating Expenses Student Spending

69,215,003
14,829,323 13,152,528 41,233,152

102,426,200
29,983,067 17,871,838 54,571,295

Macon State College
Personal Services Operating Expenses Student Spending

127,251,812
27,892,516 29,526,496 69,832,800

170,379,108
52,971,135 34,879,217 82,528,756

Middle Georgia College
Personal Services Operating Expenses Student Spending

79,891,516
17,076,394 23,921,178 38,893,944

97,118,775
30,929,284 25,731,562 40,457,929

Value Added Impact
(current dollars)
98,918,631 45,250,405 12,274,684 41,393,542
215,465,542 94,848,923 19,520,971
101,095,648

Labor Income Impact
(current dollars)
67,216,187 38,123,351 7,625,798 21,467,038
144,466,672 79,909,977 12,127,642 52,429,053

Employment Impact (jobs)
1,317 574 147 596
3,127 1,438
233 1,456

48,169,601 21,586,545 2,885,439 23,697,617
54,753,316 24,498,316 2,532,646 27,722,354
106,739,377 35,264,243 9,106,191 62,368,943
36,474,565 24,151,321 4,991,406 7,331,838
61,855,200 22,134,612 7,261,032 32,459,556
95,991,633 38,319,624 10,715,027 46,956,982
49,467,950 21,823,532 5,426,158 22,218,260

32,747,392 18,964,427 1,905,451 11,877,514
37,059,573 21,555,438 1,668,841 13,835,294
67,944,294 29,971,445 5,977,232 31,995,617
27,250,751 20,347,426 3,100,972 3,802,353
39,993,158 18,648,355 4,511,005 16,833,798
63,542,708 33,098,607 6,520,752 23,923,349
33,791,900 19,277,388 3,352,206 11,162,306

1,038 463 59 516
1,053 472 46 535
1,570 494 123 953
542 376
60 106
902 347
87 468
1,633 587 165 881
996 413
99 484
(continued)

20

Table 2 (continued)
Total Economic Impact of University System of Georgia Institutions on their Regional Economies in the 2008 Fiscal Year

Institution Associate Degree Colleges

Initial Spending (current dollars)

Output Impact (current dollars)

Atlanta Metropolitan College
Personal Services Operating Expenses Student Spending

40,541,818
10,354,625 8,189,225 21,997,968

61,178,304
20,935,778 11,127,633 29,114,893

Bainbridge College
Personal Services Operating Expenses Student Spending

51,399,412
11,074,820 10,742,960 29,581,632

61,145,963
19,943,908 11,633,609 29,568,446

Coastal Georgia Community College
Personal Services Operating Expenses Student Spending

53,718,367
13,778,802 11,542,165 28,397,400

71,556,586
25,600,746 13,243,746 32,712,094

Darton College
Personal Services Operating Expenses Student Spending

84,322,273
20,021,553 15,534,784 48,765,936

111,007,786
37,713,401 18,134,148 55,160,237

East Georgia College
Personal Services Operating Expenses Student Spending

40,081,000
6,952,074 9,089,398 24,039,528

49,752,756
12,781,637 10,214,599 26,756,520

Georgia Highlands College
Personal Services Operating Expenses Student Spending

77,591,993
17,036,195 12,835,446 47,720,352

100,388,020
31,793,221 14,702,599 53,892,200

Georgia Perimeter College
Personal Services Operating Expenses Student Spending

359,010,102
82,604,255 49,647,679 226,758,168

534,587,745
167,015,643 67,461,962
300,110,140

South Georgia College
Personal Services Operating Expenses Student Spending

37,538,009
8,308,068 8,654,069 20,575,872

46,618,428
15,200,724 9,415,433 22,002,271

Value Added Impact
(current dollars)

Labor Income Impact
(current dollars)

Employment Impact (jobs)

37,293,778 15,455,568 4,520,973 17,317,237
32,147,883 13,874,010 2,344,247 15,929,626
40,140,965 18,283,977 3,422,385 18,434,603
63,005,484 27,043,633 4,735,316 31,226,535
26,165,562 9,064,802 2,569,324 14,531,436
57,356,454 22,849,087 4,210,272 30,297,095
329,214,355 123,297,141
27,408,680 178,508,534
24,516,244 10,716,805 1,930,939 11,868,500

24,810,851 13,021,276 2,808,710 8,980,865
21,596,013 12,291,622 1,451,655 7,852,736
27,379,137 15,908,366 2,210,269 9,260,502
42,645,177 23,509,527 3,079,731 16,055,919
16,694,937 7,939,875 1,549,410 7,205,652
37,413,138 19,849,089 2,479,089 15,084,960
213,481,530 103,877,527
17,027,977 92,576,026
16,632,475 9,452,704 1,223,853 5,955,918

533 230
54 249
957 498
54 405
690 282
60 348
1,163 449 91 623
540 166
46 328
1,100 452 66 582
4,663 1,764
328 2,571
510 193
38 279
(continued)

21

Institution

Table 2 (continued)
Total Economic Impact of University System of Georgia Institutions on their Regional Economies in the 2008 Fiscal Year

Initial Spending (current dollars)

Output Impact (current dollars)

Value Added Impact
(current dollars)

Labor Income Impact
(current dollars)

Employment Impact (jobs)

Waycross College
Personal Services Operating Expenses Student Spending

16,268,681

20,633,188

11,325,609

7,727,417

233

3,948,722

7,230,052

5,098,615

4,492,030

96

3,050,895

3,347,660

734,220

464,313

14

9,269,064

10,055,476

5,492,774

2,771,07 4

123

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 were 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.
Personal Services includes all expenditures for salaries and wages to all employees and persons in the employ of the various departments, boards, commissions, institutions, and other governmental units. Also includes the employer's share of payments for FICA, retirement, group insurance, or other employer payments for employee benefits. Source: University System of Georgia Business Procedures Manual, Section 2.9.1
Expenditures and impacts for the Medical College do not include impacts associated with the hospital and clinics operated by MCG Health Inc. See the text for details.
Source: Selig Center for Economic Growth, Terry College of Business, University of Georgia (www.selig.uga.edu), March 16, 2009.

22

Table 3

Institution

On-Campus and Off-Campus Jobs that

Exist Due to Institution-Related Spending

in the 2008 Fiscal Year

Off-Campus Jobs

that Exist Due to

Total Employment

On-Campus

Institution-Related

Impact

Jobs

Spending

System Total

108,405

41,770

66,635

Research Universities and Regional Universities

63,567

27,000

36,567

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

15,294 11,379
8,693 19,415
5,470 3,317

6,320 4,460
4,647 8,739
1,779 1,055

8,974 6,919
4,046 10,676
3,691 2,262

State Universities

26,715

9,228

17,487

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

1,597
2,012 1,974 1,674
2,388 1,283 1,960
778 5,880 1,559
1,168 1,317 3,127

615
689 692 506
929 548 737
267 1,913
491
402 389 1,050

982
1,323 1,282 1,168
1,459 735
1,223
511 3,967 1,068
766 928 2,077

State Colleges

7,733

2,409

5,324

Abraham Baldwin Agricultural College Dalton State College
Gainesville State College Georgia Gwinnett College Gordon College
Macon State College Middle Georgia College

1,038 1,053
1,570 542 902
1,633 996

379

659

390

663

357

1,213

277

265

256

646

421

1,212

329

667

Associate Degree Colleges

10,389

3,133

7,256

Atlanta Metropolitan College
Bainbridge College Coastal Georgia Community College Darton College
East Georgia College Georgia Highlands College Georgia Perimeter College
South Georgia College Waycross College

533
957 690 1,163
540 1,100 4,663
510 233

166
448 213 330
129 361 1,260
150 76

367
509 477 833
411 739 3,403
360 157

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), March 16, 2009.

23

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
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 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 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
State Colleges
Abraham Baldwin Agricultural College Tift, Berrien, Worth, Colquitt, Irwin, Cook, and Turner Dalton State College Whitfield, Murray, Catoosa, Gordon, Walker, and Gilmer Gainesville State College Hall, Gwinnett, Jackson, White, Habersham, Lumpkin, Banks, and Forsyth Georgia Gwinnett College Atlanta MSA Gordon College Atlanta MSA Macon State College Bibb, Houston, Jones, Monroe, Peach, Crawford, Twiggs, Baldwin, Wilkinson, and Laurens Middle Georgia College Bleckley, Dodge, Pulaski, Twiggs, and Laurens
Associate Degree Colleges
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 Georgia Highlands College Floyd, Polk, Chattooga, Bartow, and Gordon Georgia Perimeter College Atlanta MSA 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), March 16, 2009.
24

Institution System Total

Appendix 2

Economic Impact of Capital Outlays in Fiscal Year 2008

Initial Spending (2008 dollars)

Output Impact (2008 dollars)

Value Added Impact
(2008 dollars)

1,065,513,047

1,760,801,877

928 ,327,372

Labor Income Impact
(2008 dollars)
694,063,390

Employment Impact (jobs)
16,267

Research Universities and Regional Universities

520,604,285

847,481,588

444,364,837

332,477,750

7,905

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

76,795,000 113,320,000
5,000,000 93,284,285 69,000,000 163,205,000
412,348,762

132,403,683 202,311,215
8,398,370 161,197,313
98,738,696 244,432,311
704,094,774

70,060,021 111,720,200
4,534,035 90,178,069 44,980,073 122,892,439
376,123,802

50,288,177 84,307,582 3,733,702 68,388,308 33,041,681 92,718,300
279,809,672

1,076 1,778
78 1,402 1,014 2,557
6,283

Albany State University

0

Armstrong Atlantic State University 24,260,000

Augusta State University

0

Clayton State University

42,450,000

Columbus State University

0

Fort Valley State University

55,095,000

Georgia College & State University

9,385,000

Georgia Southwestern State University 11,648,762

Kennesaw State University

156,325,000

North Ga College & State University 2,000,000

Savannah State University

35,675,000

Southern Polytechnic State University 20,605,000

State University of West Georgia

54,905,000

State Colleges

110,715,000

0 40,302,164
0 74,591,990
0 88,272,657 12,520,823 15,964,079 276,953,783 2,988,934 57,906,193 37,965,607 96,628,544
174,564,173

0 21,070,774
0 40,295,652
0 45,441,709 6,405,166 7,433,457 150,922,032 1,947,267 29,329,694 20,258,708 53,019,343
90,248,880

0 16,214,203
0 29,641,156
0 34,662,052 4,817,220 5,436,439 112,129,462 1,096,210 21,823,325 15,278,641 38,710,964
68,171,743

0 400
0 629
0 889 138 157 2,373
20 545 322 810
1,702

Abraham Baldwin Agricultural College

0

0

0

0

0

Dalton State College

7,240,000

10,160,808

5,056,307

3,918,654

112

Gainesville State College

5,435,000

9,431,579

5,269,603

3,998,536

81

Georgia Gwinnett College

34,500,000

61,970,968

34,256,576

25,861,540

545

Gordon College

0

0

0

0

0

Macon State College

27,200,000

44,280,970

23,018,754

17,742,789

465

Middle Georgia College

36,340,000

48,719,848

22,647,640

16,650,224

499

Associate Degree Colleges

21,845,000

34,661,342

17,589,853

13,604,225

377

Atlanta Metropolitan College

0

0

0

0

0

Bainbridge College

0

0

0

0

0

Coastal Georgia Community College

0

0

0

0

0

Darton College

21,845,000

34,661,342

17,589,853

13,604,225

377

East Georgia College

0

0

0

0

0

Georgia Highlands College

0

0

0

0

0

Georgia Perimeter College

0

0

0

0

0

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 were 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), March 16, 2009.

25

ICAPP Intellectual Capital Partnership Program The Economic Development Program of the University System of Georgia
www.icapp.org
26