One state invested $4.3B in higher ed—and got $17B in return

Some argue education cannot be measured in economic figures

A new analysis found that higher education contributed $63.5 billion to North Carolina's state economy from 2012 to 2013, but some argue that education's contribution should not be measured in dollars.

The first statewide measure examined the impact of 36 private colleges as well as the University of North Carolina (UNC) system and was conducted by Economic Modeling Specialists International (EMSI).

Researchers found the $4.3 billion state taxpayers invested in higher education in 2012 resulted in a $17 billion return on investment through medical care, construction, alumni and visitor spending, improved skills, jobs, and research. Analysts also found savings in the form of lower smoking rates and fewer unemployment claims that are typically associated with more education.

States increase higher ed funding, but barely

The $63.5 billion figure is a conservative estimate, according to researchers, and it is the equivalent of one million new jobs. That accounts for roughly all of the manufacturing positions in North Carolina, and 14.6% of state's GDP.

"Getting more North Carolinians better educated is critical to meeting the workforce needs of our businesses, to moving people out of poverty, to enhancing North Carolina's economic strength and competitiveness and to improving the health of our residents," says UNC system President Tom Ross.

The report also found:

  • Local community colleges educated or trained 40% of the state's workforce, contributing $19.6 billion to added state income;
  • The 16 public university campuses produce 70% of all undergraduate and graduate degrees, adding $27.9 billion to state income; and
  • The 36 private colleges created $14.2 billion in added state income.

"You cannot overestimate the importance of higher education to our economic vitality," says Harvey Schmitt, president and CEO of the Raleigh Chamber of Commerce.

The wrong measure of success?

But some say the effect of colleges and universities should not be measured merely in money. Eric Johnson, a writer working for UNC-Chapel Hill, argues in the Raleigh News & Observer that the impact of higher education cannot be measured in economic terms.

"We live in an era when policymakers take seriously the notion that public services ought to show a clear return on investment or face extinction," he says.

Instead, he writes, the public should focus on a survey released last month of 50,000 UNC alumni. It found that 94% report feeling satisfied with their college education. Additionally, 80% of public college graduates say their schools prepared them well for life.  

Education is meant to improve the human condition, Johnson argues, and while more money and businesses may improve quality of life, they are just means to an end. "We forget that economies are meant for people, not the other way around," he writes (Stancill, Raleigh News & Observer, 2/18; Johnson, Raleigh News & Observer, 2/21).

The takeaway: A new study finds higher education contributed $63.5 billion to North Carolina's state economy in 2012-12, but one industry expert argues that education's contribution to human well-being cannot be measured in merely monetary terms.

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