Study gives insight on colleges' economic impact

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Given the abundance of colleges, universities and schools of advanced or specialized learning in the Springfield metropolitan area, the impact of higher education on the local economy is significant.|ret||ret||tab|

While no studies examining the combined economic impact of all area institutions is available, a single-focus study on Southwest Missouri State University, completed in 1994, showed a direct-spending injection to the local economy of more than $232.6 million in one year. |ret||ret||tab|

That same study, titled "The Impact of Southwest Missouri State University on the Springfield-Greene County Economy, 1994," also reported that indirect spending increased the impact of the $232.6 million to $527 million enough to provide jobs for approximately 17,188 full-time workers, based on the national wage and benefit averages at that time.|ret||ret||tab|

Since then, SMSU's student enrollment has grown slightly, from 17,235 in 1994 to 17,846 as of fall 2000, and the university's employment count has gone from 1,687 full-time and 230 part-time staff in 1994 to 1,861 full-time and 294 part-time staff today, according to Ruan Hoe, PhD, assistant director of institutional research at SMSU. |ret||ret||tab|

In the 1994 study, conducted by Thomas L. Wyrick and Larry G. Cox of SMSU's department of economics, the typical SMSU student spent approximately $8,725 locally each year, representing about $139.5 million, or 59.9 percent, of the annual economic impact.|ret||ret||tab|

While the largest portion, 23.1 percent, of student spending was allocated to transportation needs, housing and food tied for a close second at 22.5 percent. In the food category, students showed a definite preference for grocers and restaurants closest to campus probably because of transportation and time-constraints. The remaining student expenditures were weighted toward entertainment, at $933 per student per year, and clothing, at $498 per student per year.|ret||ret||tab|

On the other hand, the SMSU study indicated that expenditures by the university's employees (faculty, staff and administration) which accounted for $54.9 million of the direct local spending impact were "a little more weighted toward housing and food, and weighted a little less in transportation, clothing and entertainment." |ret||ret||tab|

The employees whose presence in the community depended upon the existence of SMSU in 1994 added approximately $824,000 per week to the local economy.|ret||ret||tab|

The third major spending injection into the local economy cited in the study was the university itself, which spent a total of $21.8 million that year for operational and capital expenditures.|ret||ret||tab|

Collegiate or on-campus activities such as athletics, Hammons Hall and student center events, and university-directed high school and miscellaneous happenings accounted for another 7 percent of SMSU's $232.6 million economic impact.|ret||ret||tab|

While the SMSU study is now 6 years old, Wyrick, who has conducted a series of these studies at intervals over the years, stated that "the percentages stay fairly the same." |ret||ret||tab|

Wyrick said that while some of the shopping or merchant preferences may change over time, the updated monetary amounts for direct local spending could be reached by applying the reported percentages to the current student and employee population figures and calculating in the inflation rate. |ret||ret||tab|

According to the study, other prevailing factors enter into the total local economic impact of an institution of higher education. |ret||ret||tab|

For one, the impact on local tax collections. As cited in the 1994 study, "Springfield and Greene County governments collect about $3,835,807 in incremental tax revenues due to SMSU's presence here. This is approximately 5 percent of total taxes collected by all local governments within Greene County ... since students account for the bulk of the tax payments estimated ... and because most students have no children of their own, it seems likely that local taxes collected from those in the SMSU community exceed the value of local services received. If this analysis is correct, the additional taxes collected from SMSU students and employees helps reduce the cost of public services to other local residents."|ret||ret||tab|

Furthermore, the Wyrick-Cox study pointed out that, in the case of SMSU, certain supply-side effects of the university such as attracting a large number of young people in search of jobs into the local labor force and supplying the area with college-trained workers might exert a significant, beneficial impact on the local economy.|ret||ret||tab|

A copy of the 1994 SMSU study may be obtained through the SMSU library in the government section. Current student/employee statistics can be obtained through the SMSU department of institutional research. |ret||ret||tab|

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