The Economic Impact
of Higher Education
West Virginia’s colleges and universities are not only critical
for improving the state’s educational attainment and training
the state’s workforce, but they are also economic drivers in
their communities and the state as a whole.
Just 11 percent of the state’s base budget, or about $497
million, is appropriated for higher education, ac-
cording to a study by the West Virginia Center on
ExEdge Budget & Policy. The West Virginia Legislature
In 2011, cut higher education appropriations in Fiscal Year
the average
2015 more than any other state except Wyoming,
worker with
and it has decreased the per-student funding by
a bachelor’s
more than 20 percent since the 2008 recession.
degree earned
about $1,000
As West Virginia’s population continues to
per week, two-
decline and higher education appropriations face
thirds more than
additional cuts, there is a growing need to assess
those with high
school diplomas. the value of public higher education and its con-
tribution in both the state and local economies.
Source: www.
Despite these ongoing cuts to higher education
treasury.gov
appropriations, the state’s public higher educa-
tion institutions continue to generate revenue
that contributes one of the largest economic impacts of any
agency or organization.
Measuring the Impact
In a summer 2016 study for the West Virginia Higher Educa-
tion Policy Commission, the Bureau of Business and Economic
Research (BBER), part of West Virginia University’s (WVU)
56
WEST VIRGINIA EXECUTIVE
KATLIN SWISHER
College of Business and Economics, examined the economic
impact of the state’s public two-year and four-year higher ed-
ucation institutions.
In 2014, the state’s 21 institutions spent approximately $1.5
billion, which generated another $1.2 billion in additional
revenue, making public higher education’s overall economic
return to the state $2.7 billion. Of this total, $401 million were
appropriated by the state government while $1.1 billion came
from institutional sources. This effort also supported approxi-
mately 24,000 in-state jobs.
“I was amazed at the size of the impact of all of the institu-
tions collectively,” says Eric Bowen, a research assistant profes-
sor for the BBER and the study’s primary investigator. “Higher
education has a massive presence in this state.”
Using budget and expenditure data from the Integrated Post-
secondary Education Data System, the core postsecondary educa-
tion data collection entity for the National Center for Education
Statistics, the study estimated each institution’s total spending in
its local economy. The model used considered both primary and
secondary impacts from institutional spending.
The primary impact from this spending originates from direct
university expenditures, such as supplies, services and utilities,
as well as their payrolls, including wages and benefits to their
employees. For the four-year institutions, the primary impact
also included out-of-state student expenditures because the
addition of revenue from sources outside the state has the po-
tential to increase the profits of local businesses.