Study updates economic impact of University of Missouri | St. Louis Public Radio

Study updates economic impact of University of Missouri

Apr 11, 2016

Backers of a study of the economic impact of the University of Missouri hope that its dollar figures speak loudly enough to drown out criticism of the system prompted by protests last fall in Columbia.

The study, released Monday, updates a 2007 study that looked at how much the four-campus university system contributes to the economy of the state. It was paid for by Missouri 100, a group that promotes the system politically and economically, and was conducted by two economics professors at Mizzou.

Key findings of the study include:

  • A bachelor’s degree from the university increases present-value lifetime earnings by about $415,000.
  • About 60 percent of system graduates remain in Missouri, adding to the productivity in the state.
  • Over a generation, state appropriations for the four-campus system — estimated at $6.2 billion — will return $238.4 billion in goods and services to the state.
  • Every dollar in reduced appropriations to the university reduces Missouri’s gross domestic product by $38.43.
  • Every dollar spent in appropriations increases state revenue by $1.46.

Noting that the activities of the university are primarily teaching and research, the authors said:
“None of these actions is captured by a ‘snapshot’ of the economy. Indeed, the effects of newly discovered knowledge and the returns to higher education are processes that occur over time. Therefore, our approach is to present a ‘video’ of the economic impacts.”

To provide that view of benefits over time, the study includes several comparisons of what an individual’s earning power would be with and without a degree from an institution like the University of Missouri. Consistently, the educated worker’s lifetime earnings outpace those of others.

Influencing Jefferson City

Credit University of Missouri-Columbia

In an interview, one of the researchers who conducted the study, Joseph Haslag, said that the update didn’t really yield any surprises in terms of the state’s economic health or the relationship of the university to the benefits to the state from two key parts of the school’s mission.

“It’s pretty sizable,” he said. “The important part is that there are spillovers, especially from the research and development activity that goes on on the campuses.

“Through the classroom instruction process and teaching, we add value to students. When they come out, they are more productive. They’re better problem solvers. They have knowledge that helps them do their job better. And the research universities create new technology, new products, all sorts of new things, and that adds to the growth rate in the state.”

Haslag said the economic impact study can refocus public attention on those activities of the university after all of the publicity on the protests in Columbia.

“The past few months,” he said, “there have been other issues on people’s minds, and I think it’s a useful thing to periodically remind them that what our real business is, is research and instruction. We discover knowledge, and we disseminate it. That’s what we do.”

And, he added, disruptions at the university in terms of its everyday activities were far less than what the public might believe, based on reports in what he called the “24/7 news cycle.”

“I think if you were to talk to most faculty,” Haslag said, “either at MU’s campus, where everything was going on, or on the other three campuses, people were going into work. They were teaching their classes. They were conducting their experiments and doing their basic research.

“My guess would be if you tried to quantify it, the impact would be trivial compared with the numbers we generated, really trivial.”

Getting that message across will be the work of Missouri 100. After the House cut funding to the system, the Senate restored most of it. A conference committee will determine the final number.

'We hope that the Missouri legislature has kind of put behind it the efforts to punish Mizzou for the events of last fall.' — Dudley McCarter, head of the group Missouri 100

Missouri 100’s president, Clayton lawyer Dudley McCarter, said that the group will make sure the study is presented to legislators and others so that its economic lesson comes across clearly.

“We are certainly hopeful that the Missouri General Assembly takes note of the findings and realizes that the money that’s given to the University of Missouri system is a good investment for the state,” McCarter said.

He said the numbers should show lawmakers that the university is making good use of the dollars appropriated to it, and the events of last fall shouldn’t loom large in their deliberations.

“We hope there’s been some healing,” McCarter said, “and we hope that the Missouri legislature has kind of put behind it the efforts to punish Mizzou for the events of last fall and recognize that punishment of the University of Missouri only hurts Missouri families and Missouri students.

“We’re doing our best to educate students, and if funding is cut, it’s just an invitation for students to leave the state of Missouri and never come back.”

As St. Louis Public Radio's Marshall Griffin reported last week, even though the Senate budget would restore most of the money the House budget cut, senators are still focused on what they see are management problems at the university. Budget Committee Chair Kurt Schaefer of Columbia said fiscal reprimands may be necessary, but need to be targeted.

He asked what you do when you say you are going to require accountability and don't get it: "How do you get your message out there in a way without hurting students?"

The University of Missouri’s Board of Curators holds the license for St. Louis Public Radio.

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