EIS: University Contributes $700 Million to State Economy Each Year
Last summer, Assistant Professor of Public Administration Frank Papa developed an Economic Impact Study (EIS) to put a dollar figure on CSUDH’s role in the local South Bay economy and in the state of California. Using conservative measures, what he found is that the University’s impact goes well beyond the $711 million brought to California and $574 million put into the local community each year. 

“I think these numbers are much larger than most would expect,” says Papa, who divided the University’s impact into two categories: the money spent by the University that goes directly into the economy, and the increase in earning potential each graduate receives over the course of their career because of their college degree. “That we’re adding almost three-quarters of a billion dollars in the state economy every year – that’s a lot of money. But to me, the important stuff is the subtext. It’s the fact that a lot of these dollars stay in the local economy and that we’re doing more than just increasing the earning potential of graduates.” 

What Papa refers to is that a majority of CSUDH’s graduates stay local after completing their degrees and contribute not only through their growing wallets, but as educated citizens as well. “It’s been shown that areas with college-educated citizens are areas with reduced crime, better citizens, better voters, and they’re more tolerant.” After looking at several years of data with Executive Director of Institutional Research, Assessment, and Planning Steve Frieze, they agreed a conservative estimate was that 80 percent of CSUDH graduates stay in the local area. Using that figure, Papa contends that this University contributes more than other big name universities.  

“USC or an Ivy League school may triple the earnings of their graduates, but a larger percentage of our graduates stay right here. So we may not be viewed as a large institution, and I think it’s safe to say we’re often underrated and under-appreciated, but we may have a bigger impact on our local economy than other larger schools have on their local economies,” says Papa. 

To arrive at these conclusions, Papa studied and analyzed the data for three months last summer. He always erred on the side of being conservative so that the EIS is regarded as scholarly work, not promotional. “Sometimes reports like this can be propaganda to boost the University’s image. That’s not what this is. I’m a professor standing behind this research. I crossed all the t’s and dotted all the i’s,” he says.  

Papa only had to look as far as the University’s financial statements to deduce the direct influence on the economy. But to calculate graduates’ future increased earnings was much more complicated. Using 2000 Census data, he calculated that a true freshman will earn an average of just over $20,000 per year over the course of their entire career with a college degree – it will start off as less as graduates enter the work force, peak in the middle of their careers, and wane a bit as they move toward retirement.  

Yet, CSUDH’s student population is comprised of much more than first-time freshman – another kink in the equation. To make the EIS accurate and continue the conservative thread, he considered inflation, those who came to CSUDH half-way through their careers, the number of students who had already earned an associate’s degree upon arriving at CSUDH (and thus reducing the earning differential between an associate’s and bachelor’s), and those who came later in life (and thus reducing the number of years of earnings potential before retiring). He also used a low multiplier of .7 for indirect contributions to the economy and looked at one particular year of graduates to arrive at these figures instead of trying to estimate the current earnings of all alumni in the work force. This last tactic means that as the University’s enrollment grows, so would the figures in the EIS. 

After all of this work, Papa says it was actually an enjoyable experience: “One of the reasons I am at this school is that I really believe what I’m saying here. I can’t say I was surprised by the numbers, though I think many will be, but I enjoyed being able to put numbers to this to say, ‘look, we really are doing something here for our students and this area. We are providing a value added education that benefits not only our students, but the communities that we serve.’”

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