Indiana University

News Release

Tuesday, May 19, 2009

Last modified: Tuesday, May 19, 2009

With large economic footprint, IU makes vital impact on state, study says

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FOR IMMEDIATE RELEASE
May 19, 2009

BLOOMINGTON, Ind. -- Indiana University continues to lead all public and private institutions in the state of Indiana in granting baccalaureate and most graduate degrees, and a new study indicates that IU graduates are making vital contributions to the state well after they receive their degrees.

An estimated 81 percent of Indiana residents who graduated from IU between 2002 and 2005 still lived in Indiana at the start of 2008, according to an economic impact study conducted by the Indiana Business Research Center at IU's Kelley School of Business.

Through its contribution to human capital in Indiana, along with spending associated with its core missions of education and research, the civic engagement of its students and staff, and its campuses' cultural offerings, Indiana University makes a major impact on Indiana's economic health, the study reports. The total "economic footprint" of IU on the state amounts to $4.6 billion annually, and this economic activity generates approximately $187 million in state and local taxes, according to the study.

"While IU's degree output comes as no surprise, we were pleased to find that so many of the university's graduates are choosing to apply the skills they've acquired here in Indiana," said Jerry Conover, director of the IBRC. "Clearly, the settlement patterns of IU alumni have a significant impact on economic development in Indiana and Hoosiers' quality of life. And, based on the characteristics of IU's student body, we also know the university's graduates are inclined toward giving back to their communities through volunteer work and charitable donations."

In terms of its overall economic impact, IU sizes up favorably with the state's major employers. IU employs 16,320 faculty and staff, approximately the same number of Hoosiers who work in medical equipment and supplies manufacturing. Their spending -- together with student expenditures and university purchases of goods and services -- supports an additional 36,000 jobs stateside, according to study estimates.

The Indiana University Impact Study also measures the economic benefits of IU's civic contributions, a value estimated at nearly $16 million. Estimates for IU's civic engagement were based on an extensive student and staff survey that collected data on a range of topics including spending patterns, volunteer and service-learning activities and charitable contributions.

To determine IU's economic footprint, the study examined the employment and economic significance of spending by the university, students and visitors. Its estimates consider the effects of such direct expenditures as university purchases and compensation of faculty and staff as well as the "ripple effects" of these expenditures within the community.

The study divides IU's impact into "core" and "collateral" benefits. Core benefits, which relate to the university's core mission of providing excellence in education and research, highlight characteristics of IU students, as well as the number and type of degrees conferred, settlement patterns of recent graduates and the amount of research funding IU attracts. This information is useful in indicating whether IU students apply their skills in the state after graduation, whether IU curriculum supports the state's economic development priorities, including those in the life sciences, and whether IU research and development generates private-sector commerce.

Collateral benefits of IU recognize the effects that university expenditures and student and staff activities have on quality of life in the local community.

Other key findings of the study include:

The study was undertaken to measure how the lives of Hoosiers are improved by IU, and the report presents policymakers, university officials and Indiana taxpayers with comprehensive yet conservative estimates of the university's impact. It includes reports for the entire IU system as well as for each of the university's eight campuses; these reports are available at https://www.ibrc.indiana.edu/studies/IUimpact.

The study uses traditional input-output analysis to reveal economic activity related to IU's operating budget and student spending. The monetary value of student service-learning and volunteering is also added into the total of collateral benefits and the value of faculty and staff civil engagement is also measured. Conover noted that "an important element of the study is its methodological rigor. Many university impact studies have relied on shaky assumptions that magnify an institution's apparent impact. The conservative approach of our analysis made a giant leap toward the rigor of a peer-reviewed article in an effort to more realistically reflect the university's real impacts."

Established in 1925, the Indiana Business Research Center provides and interprets economic information needed by the state's business, government and nonprofit organizations, as well as users of such information throughout the nation. The IBRC maintains databases on numerous topics such as employment, taxes, income, economic activity, education, demographics and a host of other economic indicators for the nation, the state and local areas. In addition, the center conducts original research to generate needed information when existing data are not available or sufficient.


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