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University of Hawai'i |
(808) 956-8856 Telephone |
For Immediate Release: |
September 15, 2000 |
Contact: James Mak, Department of Economics, 956-8280 Jim Manke, University and Community Relations, 956-6106
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| UH a Billion-dollar Player in Hawai`i's Economy Excellent Return on Investment, Economists Say |
The University of Hawai`i generated $1.1 billion in economic activity in Hawai`i last fiscal year, accounting for nearly four percent of all business sales and total employment in the state.
The findings are part of a report commissioned from UH economists to measure the impact of the ten-campus university system on the state's economy.
"This up-to-date information confirms what we've been saying for years that the University of Hawai`i is a huge factor in the economic health of the state, and that the state's investment in UH pays big dividends. Nothing else comes close," said President Kenneth P. Mortimer.
UH Manoa economics Professor James Mak and his colleagues are preparing a multipart economic impact study, commissioned by the UH Office of Planning and Policy and funded jointly by the university and the State Department of Business and Economic Development. Initial findings will be published shortly as part of the university's "Benchmark/Performance Indicator Report, 2000 Update."
For fiscal year 1999:
- Total UH system spending was $730.4 million, of which $380 million (including fringe benefits) came from state general funds.
- Total UH system, student and out-of-state visitor spending (by those who come to Hawai`i for UH-related conferences, symposia, athletic events, etc.) was $1.1 billion.
- Thus, for every $1 of state money appropriated to the university, the UH system generates another $1.87 of education-related expenditures in the economy.
- Total UH-related expenditures generated directly and indirectly $1.6 billion in business sales, 29,000-plus jobs, $1.1 billion of income to Hawai`i households, and $183 million in state and local taxes.
- These expenditures represent about 3.8 percent of total business sales, 3.9 percent of total employment, 4.7 percent of labor income, and 4.7 percent of total state and local taxes for the entire state of Hawai`i.
- Every $1 of general funds invested in UH generates $4.10 of total business sales, $2.89 of labor income, and $0.48 of state and local taxes in the economy of Hawai`i.
- For every $1 million of general funds invested in UH, 77 fulltime-equivalent jobs are generated.
"The University of Hawai`i's impact can also be measured in other terms," Mak said. "It's important to understand that the university contributes in a longer term way to the overall health of the community through the development of human capital, and a basic knowledge infrastructure."
"It is becoming very clear that integrating Hawai`i into the global academic, business and technology communities is not possible without the university, Mak says.
As supporting examples, the study points out that the University of Hawai`i
- Fosters new businesses, assists existing business and creates long-term job growth
- Promotes innovation and capitalizes on the state's unique natural and cultural attributes
"The university is a laboratory for the creation of new knowledge and a warehouse for additions to the pool of knowledge," Mak says."Developing human capital, has a direct effect on individuals, lifetime incomes, and certainly an educated populace makes Hawai`i a better place for every one of us."
The final report will include a section analyzing the return on investment , in a University of Hawai`i education. Among significant findings are the following:
- A typical Hawai`i resident who currently earns a bachelor's degree from UH can expect to earn in excess of $1 million more over her or his lifetime than a resident with a high school diploma.
- A resident UH bachelor's degree holder pays $136,563 more in state taxes over his or her lifetime than a resident with a high school diploma.
- For Hawai`i residents, the annual return on investment in a bachelor's degree from the University of Hawai`i is 15.8 percent.
The University of Hawai`i economic impact study is expected to be completed later in the fall semester. In its final form, it will include both quantitative analyses of the university's contributions to the Hawai`i economy and discussion of the long-term effects of human capital development on Hawai`i' s economy.
