The Association of Independent Colleges and Universities of Massachusetts (AICU Mass), which represents fifty-nine independent, nonprofit colleges and universities across the Commonwealth, today released an economic impact study that demonstrates the statewide annual impact in Massachusetts of its members at $71.1B.
The study was conducted by the national, independent research firm Econsult Solutions, Inc. (ESI).
ESI’s research also shows that the educational and research of the colleges and universities of AICU Mass generate $2.4B in tax revenues to the Commonwealth, as well as an economic impact of $28B from an alumni wage premium, and collectively support 320,800 jobs.
“In Massachusetts, we know instinctively that our private colleges and universities are crucial for our economy, with these institutions helping to define what it means to learn, work and live in the Commonwealth,” said Rob McCarron, president and CEO of AICU Mass. “This Economic Impact Study puts that into hard numbers that quantify just how crucial. Across this state, these schools are the economic engines for their communities, and their regions. Taken together, they are one of the most important anchors of our robust and vibrant knowledge-based economy.”
In western Massachusetts, where there are 11 AICU Mass institutions, the economic impact stands at $3.3B supporting 19,400 jobs.
“Western Massachusetts is synonymous with some of the best private college and universities in the world – they are a part of our culture, our way of life and, based on this study, clearly part of our economic well-being,” said Rick Sullivan, president and CEO of the Western Massachusetts Economic Development Council.
The study details the impact of AICU Mass members in four categories: Operations; capital spending; student and visitor spending; and the alumni wage premium. The economic impact in each category, broken down, is: 1. Operations: $35B. Operations are the costs associated of running a campus, such as payroll and purchasing. Oftentimes a local college or university is a community’s largest employer and among the largest procurers of goods and services. In western MA, this equals $1.9B.
2. Capital spending: $4.4B. Capital spending is defined as spending and investments in new construction and on-going maintenance, which supports the construction sector and its related ecosystem. In western MA, this equals $280M.
3. Ancillary spending: $3.6B. Ancillary spending is student and visitor spending such as campus visits; reunion weekends; commencements, etc. In western MA, this equals $140M.
4. Alumni wage: $28B. Alumni wage describes the spending power of the alumni of AICU Mass institutions who live and work in the state. In western MA, this equals $980M.*
“Higher education and economic development go hand-in-hand, and this Economic Impact Study makes that clear,” said Dr. Robert E. Johnson, president of Western New England University, and the incoming chair of the board for AICU Mass. “We all know of the unique intangibles of living in a college community – the vibrancy of the students, the access to the arts, theater, and music, as well as the array of class offerings. But this report also clearly and distinctly shows the tangible impacts of dollars and jobs. It is that ripple effect that keeps so many small- and mid-sized businesses across our Commonwealth viable.”
AICU Mass institutions are not only feeding the future workforce for Massachusetts, collectively they educate the majority of Pell Grant recipients** and first-generation students attending a four-year college or university in Massachusetts, while also producing the majority of STEM, nursing and allied healthcare professions earning an Associate’s degree or higher in Massachusetts*** that will support the Massachusetts workforce for years to come.
“This report should serve as a critical reminder of the tremendous impact of the private colleges and universities in the state, not just those detailed in the report, but those less quantifiable, added McCarron. “Our knowledge-based economy and access to talent is why companies relocate their headquarters to the Commonwealth; it’s what helps our state economy better weather recession, and is often cited as an invaluable asset in state bond ratings. Massachusetts and the higher education community can take pride in the work we are doing together to build and sustain a unique educational ecosystem that delivers significant impact to local communities, brings opportunity to people’s lives, and creates knowledge that benefits the world.”
A full copy of the report is available here.