Contact: Anthony P. de Bruyn, (512) 499-4363

Date: March 9, 2005

UT System News Release

Economic study cites UT System's impact on Texas economy

A new study of the economic impact of the University of Texas System's 15 institutions on the state of Texas shows a multi-billion dollar return on the state's investment in higher education.

According to the study -- prepared for the UT System Administration by the Institute for Economic Development at UT San Antonio -- UT institutions add $4 billion in personal income and a total economic impact of $12.8 billion to the state.

"This study demonstrates that even by the most conservative standards, the UT System has a tremendous impact on the Texas economy. But I think we all realize that it is difficult to put a firm dollar figure to the System's contribution to Texas and its economy," said UT System Chancellor Mark G. Yudof. "The true wealth of Texas lies in education and research – in the minds that we nurture and the advances they create for all of us. They are infinitely renewable resources that we are proud to help develop."

The institutions of the UT System have a huge employment impact on Texas. On average, for every on-campus job that exists, an additional 1.5 jobs are added because of institutional related spending, the study says. The combined employment impact of all 15 institutions on their host regions was 215,500 jobs.

Universities attract students who are not from the region, and those non-resident students add $1.5 billion to the local regions and support 17,200 Texas jobs.

The future earnings of graduates from UT System institutions also have a profound effect on the state's economy. For every $1 the state invests in UT System higher education, that dollar serves as a catalyst for, and ultimately results in, an additional $24 of gross work-life incremental earnings that go into the Texas economy, according to the study. Graduates can look forward to increased incremental earnings from a college degree: a bachelor's degree recipient would typically add over $1 million beyond the baseline average for a high school degree.

"The UT System's economic impact exceeds $12.8 billion annually along with 215,700 jobs in Texas, and further contributes to our prosperity with 35,000 graduates every year," said Robert McKinley, lead investigator of the study. "With each successive class of new workforce entrants fulfilling their higher potential, and leading our knowledge-based industry growth, Texas can compete and win in the global marketplace."

Construction on UT campuses is another major factor impacting the state's economy. Capital expenditures in fiscal year 2004 contributed an estimated $2 billion in local regions. During the next six years, UT institutions are projected to spend an estimated $5 billion on construction projects, and with additional expenditures resulting from those purchased, the combined impact of that construction will be $7.7 billion.

The System's six health institutions have an impact on the state that goes beyond education and research. They provide health care services, including uncompensated health care. Collectively, these institutions add $7.7 billion and 111,700 jobs into their regions, the study found. In fiscal year 2004, the service levels at the health care institutions had increased to more than $5.8 billion.

A group of expert advisors worked with the study's research team in developing the report. Those advisors included Texas economist Ray Perryman and state demographer Steve Murdock.

"The researchers have utilized a widely accepted methodology for assessing the impacts of a university, although one that does not fully capture all economic interactions. I consider this a significant but conservative assessment of the overall annual economic impacts of the University of Texas System," said Perryman. "When coupled with the long-term effects of improving the education of Texans, these results show that the University of Texas System has an important and significant impact on the economic development of the state of Texas."

The UT System has an annual operating budget of $8.5 billion (FY 2005). Student enrollment exceeded 182,000 in the 2004 academic year. The UT System confers one-third of the state's undergraduate degrees and educates three-fourths of the state's health care professionals annually. With more than 76,000 employees, the UT System is one of the largest employers in Texas.

Economic Impact Study - Full Report

Economic Impact Study - Executive Summary

UT System website

UTSA Institute for Economic Development website