September 01, 2011

Study details SIUC’s widespread economic impact

by Tom Woolf

CARBONDALE, Ill. -- $2.3 billion.

That’s how much Southern Illinois University Carbondale contributes in economic activity annually to the Illinois economy, according to a study released today (Sept. 1) by the University.

Authors of “The Economic Impact of Southern Illinois University Carbondale in the Region and the State of Illinois” are Subhash C. Sharma, professor and chair of the Department of Economics; Aboubacar Diaby, a graduate student in the economics department; and Kyle Harfst, executive director of the Southern Illinois Research Park.  The last study of the University’s economic impact was 18 years ago.

“The authors have created a reliable and incredibly valuable resource, and I appreciate the amount of work that went into this study,” Chancellor Rita Cheng said, noting that many people across the Carbondale campus and at the School of Medicine in Springfield provided key data and information.  “It documents the significant and lasting contributions that our faculty, staff, students, alumni and retirees make not only in southern and central Illinois, but throughout the state.”

The full report is available here.

The study examines SIUC’s annual, or short-term impact, long-term impact and overall impact on the Illinois economy. It also estimates the annual impact in 23 counties in Southern Illinois and nine counties in central Illinois, for the period July 1, 2009, to June 30, 2010.

Southern Illinois counties included in the study are: Alexander, Edwards, Franklin, Gallatin, Hamilton, Hardin, Jackson, Jefferson, Johnson, Massac, Monroe, Perry, Pope, Pulaski, Randolph, St. Clair, Saline, Union, Wabash, Washington, Wayne, White and Williamson.

Central Illinois counties included in the study are: Adams, Christian, Logan, Macon, Macoupin, Menard, Montgomery, Morgan and Sangamon.

SIUC’s annual, or short-term contributions to the state and regional economies reflect employees’ spending, students’ spending, University purchases and operating expenses, capital/permanent improvement projects, research grants and the impact of visitors to the region.

Among short-term impacts:

• Both directly and indirectly, SIUC supports nearly 24,000 jobs in the state and nearly $1.2 billion in personal income (a component of the state output).

• For every $1 appropriated by the state to SIUC, it generates roughly $7.72 of economic activity annually in Illinois.

• For every $1 appropriated by the state to the University, 41 cents are returned to the state and local governments in annual tax revenues.

Long-term contributions reflect SIUC graduates who work in Illinois and contribute to the state economy for the next 40 years of their work life.

The authors note that a doctoral degree will gain $2.9 million more than a high school degree over a typical 40 years of work life.  For professional, master’s and bachelor’s degrees, the incremental gains are $4.3 million, $1.95 million and $1.2 million, respectively.

Long-term impacts include:

• SIUC contributes approximately $8.14 billion in increased expected work life earnings for its graduates each year.  Since 50 percent of SIUC graduates remain in Illinois, $4.07 billion is circulated in the state’s economy.

• That $4.07 billion in impact creates an additional $7.4 billion in economic activity in the state, meaning each year’s SIUC graduates create about $11.4 billion in economic activity (in 2010 dollar value) in the long run.

• Each $1 appropriated by the state to the University generates approximately $38.60 of economic activity in the long run in the state.

• Fiscal year 2010 graduates will pay at least $458.8 million in state and local taxes (in 2010 dollar value) in their work life.  When compared to the $296.2 million state appropriation to SIUC in fiscal 2010, there is a net gain of $162.6 million to the state.

And, overall impacts include:

• Ultimately (in the long- and short-run), each $1 appropriated by the state to SIUC will return $2 in the form of state and local taxes, and will generate $46 of economic activity in the state.

• Of nearly 210,000 alumni, at least 104,600 live in Illinois, including 44,752 living in southern and central Illinois, and 37,000 living in the 23-county region of Southern Illinois.  Also, 2,436 SIUC annuitants live in Illinois.  SIUC alumni and annuitants annual contribute $17.4 billion in economic activity in the state, and generate directly and indirectly $1.1 billion in state and local taxes. Their contribution is in addition to the short- and long-term contributions.

In terms of the impact on the economy of southern and central Illinois, SIUC’s activities contribute approximately $1.4 billion, 17,707 jobs (directly and indirectly) and nearly $838 million in personal income to the economy of the 32 counties.

In Southern Illinois, SIUC contributes $859 million of total economic activity, directly and indirectly supports 12,402 jobs and generates approximately $551.5 million in personal income.

During fiscal year 2010, the School of Medicine in Springfield contributed nearly $332 million in total economic activities in a 10-county region.  A total of 3,801 jobs (direct, indirect and induced) were created as a result of the School of Medicine, and its activities generated $14.5 million in direct and indirect taxes to the state.

As a research institution, SIUC attracts significant external funding.  During the last five years (fiscal years 2006-2010), the University generated $357.5 million in research grants.  In terms of 2010 dollars, the report reveals that the research grants generated $1.12 billion in the 32 counties of central and Southern Illinois, and directly and indirectly supported 8,550 jobs and $548 million in personal income.  In addition, over the five-year period, these grant activities also generated $41.7 million in direct and indirect state and local taxes.

The authors also point out that SIUC provides extensive community service to the region and the state in the areas of economic development, health and social services, culture and volunteerism.  In fiscal 2010, SIUC’s Office of Economic and Regional Development assisted 51 businesses in Southern Illinois start and expand; in terms of volunteer contributions, more than 3,600 students provided 50,965 hours of service to not-for-profit agencies.

Additionally, the School of Medicine (SOM) provides a significant amount of community service through specialty and primary care at 100 outreach sites in nearly 50 communities.  The school also offers public education programs at various locations concerning a variety of illnesses and injuries.

The report states that “the most important impact of SIUC, which cannot be quantified, is the effect on the community through social and voluntary services provided by SIUC and SOM employees and students, and the SIUC graduates overall being responsible citizens.”