Note to Editors: A photo of Martin Shields is available with the news release at http://www.newsinfo.colostate.edu/.
Colorado State University and its Colorado-based alumni generate about $4.1 billion in household income, making it one of the most significant economic growth engines in the state, according to a report by two state economists at CSU.
The earnings represent 3.1 percent of Colorado’s total household income and generate more than $130.8 million in income tax revenue and $50.2 million in sales tax revenue, said Martin Shields, regional economist for northern Colorado.
Shields revealed the research, funded by Colorado State and the Northern Economic Development Corp., at the 22nd Annual South Metro Denver Economic Forecast Breakfast on Wednesday. Shields, an associate professor of economics, collaborated with Harvey Cutler, also a Colorado State economics professor, on the report, "Created to Serve: Colorado State University’s Impact on the State’s Economy."
"Colorado State University serves our state’s economic and educational interests by generating jobs through startups, preparing a skilled workforce and working in partnership with industry," said Interim President Tony Frank. "As we look to build an economically competitive, entrepreneurial state for future generations, we must emphasize the value illustrated by our institution as well as other Colorado colleges and universities."
The study estimated that 50,000 alumni are employed in the state and 6,200 work for the university.
"Colorado State University is a key part of the economic health of northern Colorado, spinning off entrepreneurs with some regularity and providing jobs that have direct and indirect benefits that reverberate through the region," said Maury Dobbie, president and CEO of the Northern Colorado Economic Development Corp. "Our higher education assets are a key part of Northern Colorado’s – and the state’s – ability to compete for companies and jobs as well as improve the quality of life for our residents."
University employees use their income to purchase goods and services, which results in economic growth for the state, Cutler said. These purchases lead to expansions in sectors such as retail, grocery stores, services and housing, resulting in increases in household income earned, sales taxes and personal income taxes paid to the state.
Additionally, the university draws about $300 million in annual research dollars from federal, state and local sources.
The study concluded that people with college degrees in Colorado have a competitive edge, but they benefit the entire economy, according to the study.
In Colorado, increasing the percentage of workers with a four-year college degree by only one percentage point – about 5,372 new college workers – increases the average earnings of all college-educated workers by $481 per year. Workers without a four-year degree also benefit from such an increase – the same 1 percentage point increase in college educated workers increases the average earnings for high-school-only graduates by $250 per year.
"By increasing innovation capacity, growth in the state’s college-educated workforce spills over to other sectors, increasing the productivity of all workers," Shields said. "With rising productivity, wages increase for workers of all education levels. The benefits of individual higher education extend across society."
Other study highlights:
-CSU research results in a 0.2 percent increase in overall productivity at Colorado firms or about $79.7 million annually.
-Annual student spending in Fort Collins alone is estimated at $168 million, supporting 628 non-university jobs in the city. The total CSU effect on local Fort Collins tax revenue is $12.9 million. (Tax revenue consists of sales, property, use and other taxes.)
-CSU, Front Range Community College, University of Northern Colorado, and Aims Community College together employ more than 9,700 workers in northern Colorado and provide an annual payroll in excess of $400 million. The total employment generated by these institutions represents 4.5% of the total regional job base.
-CSU employees generate 11 percent of household income in Fort Collins, which is about $253 million annually. The combination of CSU employees and students account for 15.8 percent of total tax revenue for the city of Fort Collins. An additional 628 jobs are supported in Fort Collins alone by an estimated $168 million in annual student spending on housing, food, entertainment and more. The total CSU effect on local Fort Collins tax revenue is $12.9 million.