OREGON STATE UNIVERSITY

Study show OSU's economic impact exceeds $590 million

04/15/1997

CORVALLIS - Spending in the Oregon economy associated with Oregon State University totaled more than $590 million last year, according to a new research study.

The study, titled "Oregon State University: Economic Impacts of an Institution of Higher Education," was compiled by OSU researchers Kristin Aldred Cheek, Rebecca Johnson, Bruce Weber and Laurie Houston.

It includes an analysis of short-term economic impacts using an input-output model of the Oregon economy as well as a survey of research on longer term contributions of university teaching, research and extension activities.

"OSU is a major employer, exporter and consumer in the Oregon economy," said Johnson, associate professor of forest resources and one of the study's authors. "Through its research, teaching and extended education programs, OSU has a significant impact on the state economy."

According to the study, OSU is a major contributor to both jobs and income in Oregon. Approximately $340 million in income and 14,000 jobs throughout the Oregon economy are associated with OSU, the researchers found.

More than 10,000 jobs were directly associated with the university, student and visitor spending. Respending of these dollars in the Oregon economy created nearly an additional 4,000 jobs.

In Linn and Benton counties, OSU's impact provides some $270 million in income and about 11,600 jobs.

The study also shows that the quality of OSU's educational and research program attracts investment to Oregon. Using data from the 1996 fiscal year, OSU revenues totaled more than $370 million from a variety of sources, including government appropriations, student fees, sales, services, gifts, grants and contracts.

Almost one-half of those revenues come from out-of-state sources.

 

For each $1 appropriated by the State of Oregon, the study found that OSU attracted an additional $2.30 in revenue.

Expenditures made annually by Oregon State, its employees, students and visitors strengthen Oregon's infrastructure and statewide economic growth, the report said. Annually, OSU expends more than $111 million on goods and services in Oregon, some $45 million alone in Linn and Benton counties.

According to the report, OSU's 4,300 non-student employees generate an annual payroll of nearly $154 million. After taxes ($18 million federal; $10 million state), Social Security ($9 million), Medicare ($2 million) and other deductions, OSU employees spend $55 million in the state of Oregon; $41 million in Linn and Benton counties.

OSU students generate similar impact. Excluding dollars paid to the university, OSU students expend some $56 million annually in Oregon. Of that total, about $13 million is spent by out-of-state students.

Oregon State University campus visitors also make major economic contributions to the state and the region. Athletic, academic, cultural and other events attract some 300,000 visitors each year to the OSU campus. Some 36 percent come from outside Linn and Benton counties while 12 percent come from outside Oregon.

OSU's out-of-state visitors expend about $1.8 million throughout Oregon, while out-of-region visitors (those from outside of Linn and Benton counties or out-of-state) spend about $4.8 million in the Corvallis area.

The study also reviewed recent analysis of rates of return to investments in education. It noted that the U.S. Census Bureau now estimates that a high school diploma adds $200,000 to lifetime earnings, and an undergraduate degree adds an additional $500,000. Further, the premium for a college degree has increased in recent years.

In 1979, male college graduates earned 37 percent more than high school graduates; 70 percent more than high school dropouts. Figures for 1992 show that male college graduates now earn 70 percent more than high school graduates, and 133 percent more than dropouts.

Similar results are found for women, the study pointed out.

Increasing demand for educated workers promises to maintain the premium for a college degree, the report said. Those investing in a college degree can expect a return of between 11.4 and 13.4 percent on this investment - a figure that is highly competitive with rates of return on other investments.

Society, it says, also benefits from college educated persons. The social rate of return on public investment in undergraduate education is calculated between 11.6 and 12.1 percent. Social rates of return to research and extension activities are even higher.

"These high social rates of return estimates suggest that additional investments in higher education of state tax dollars would yield long-term economic benefit to the state," said Weber, a professor of agricultural and resource economics and another member of the team producing the report.

"There are other benefits to the state that these estimates don't capture. One of the most important of these is the role of a strong higher education system in stimulating and supporting the growth of industry clusters that depend on access to technical knowledge and an educated workforce."