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The Univ. of Neb. at Omaha’s Contribution to the Growth of the Omaha Regional Economy. Sponsored by: Center for Faculty Dev., UNO February 27, 2007. Circular Flow of Income. UNO’s Contribution to Omaha. First Pass: $96.7 or 0.4%. Circular Flow of Income. UNO’s Contribution to Omaha.
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The Univ. of Neb. at Omaha’s Contribution to the Growth of the Omaha Regional Economy Sponsored by: Center for Faculty Dev., UNO February 27, 2007
UNO’s Contribution to Omaha • First Pass: $96.7 or 0.4%
UNO’s Contribution to Omaha • First Pass: $96.7 mill or 0.4% • Second Pass: $157.0 mill or 0.6%
The Metric (Value of SCH) • A university education increases student’s average yearly earnings • Based on US data from 2003, the average earnings with a high school degree was $28,950 • For the bachelor’s degree, the average earnings was $53,264 • The increase was $24,314 per year
Earning Increase with SCH BA/BS Earnings HS Earnings SCH
Sheepskin Effect BA/BS 16% HS
Learning Curve Function BA/BS HS FR SO JR SR
Value of SCH and Degree BA/BS $7266 $155 $137 $121 $109 FR SO JR SR
Average Increase in Earnings for One Academic Year Total FR SCH X $109 = ( ) Total SO SCH X $121 = ( ) Total JR SCH X $137 = ( ) Total SR SCH X $155 = ( ) Number Grad X $7266 = ( ) ________ Total $51.4Mill
Combined Undergrad and Grad • Carry out same procedure for Graduate Students • Average increase in earnings per year for Undergrads and Grads is $63.5 Mill
Present Value for One Academic Year • Spread average increase in earning over years of work, discount 5% gives: Present Value of $750 Mill. • Contrast: UNO expenditures on Wages and Salaries, Operations, and Capital and Equipment Expenditures is $96.7 Mill.
UNO’s Contribution to Omaha • First Pass: $96.7 mill or 0.4% • Second Pass: $157.0 mill or 0.6% • Third Pass: $810.3 mill or 3.2%
Regional Development • Obtain SCH and Degrees back to ’65. • Multiply by Ave Value SCH and Value of Degree. • Consider Mortality, Attrition from Region. • Results: Total Value Added by Embodied Human Capital due to UNO: $1,193.7 Mill ($1.2 Bill)
Other Considerations • Foreign Student Expenditure • UNO Retirees Expenditures • UNO Wage and Salaries • UNO Operations, Capital and Equipment • Add Social Benefits • Apply Multiplier for Indirect and Induced Effects
Social Benefits- Dollars per SCH • Absenteeism Savings $5.36 • Medical Costs $2.87 • Incarceration Savings $1.71 • Crime Victim Savings $1.88 • Added Productivity $ .81 • Welfare Savings $3.57 • Unemployment Savings $2.04
UNO’s Contribution to Omaha • First Pass: $96.7 mill or 0.4% • Second Pass: $157.0 mill or 0.6% • Third Pass: $810.3 mill or 3.2% • Fourth Pass: $1.74 bill or 6.9%
Investment for UNO Students: Opportunity Costs • Students Not Working- $12.98 mill • Students Working- $102.31 mill • Lost Leisure - $8.18 mill • Tuition and Fees - $31.72 mill • Books and Supplies - $10.43 mill • Pell and other Grants - ($17.22 mill) ___________ Total $148.40 mill
Summary of Value to Students • Return on investment- 17.3% • Payback 7 years 2 months
Investment for the State of Nebraska • Considerations • Attrition • University Expenditures • Indirect/Induced Earnings • Taxes • State Appropriations
Returns to the State of Nebraska • Considered as an investment, the return will be 17.4 % • Payback of state appropriations in 6 years, 7 months
Other Contributions • Attract New Industries • Flexible Work Force • Education a Consumption Good • Informed and Involved Citizens • External Effects
Faculty “Rockstars” • 200 students per year. • 3 credit hours per student. • $146 per SCH. • $87,600 increase earnings per year. • Value over students working life – approx. $1.75 mill. • Value over educator’s career – approx. $35 mill.