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The Univ. of Neb. at Omaha’s Contribution to the Growth of the Omaha Regional Economy

The Univ. of Neb. at Omaha’s Contribution to the Growth of the Omaha Regional Economy. Sponsored by: Center for Faculty Dev., UNO February 27, 2007. Circular Flow of Income. UNO’s Contribution to Omaha. First Pass: $96.7 or 0.4%. Circular Flow of Income. UNO’s Contribution to Omaha.

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The Univ. of Neb. at Omaha’s Contribution to the Growth of the Omaha Regional Economy

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  1. The Univ. of Neb. at Omaha’s Contribution to the Growth of the Omaha Regional Economy Sponsored by: Center for Faculty Dev., UNO February 27, 2007

  2. Circular Flow of Income

  3. UNO’s Contribution to Omaha • First Pass: $96.7 or 0.4%

  4. Circular Flow of Income

  5. UNO’s Contribution to Omaha • First Pass: $96.7 mill or 0.4% • Second Pass: $157.0 mill or 0.6%

  6. The Metric (Value of SCH) • A university education increases student’s average yearly earnings • Based on US data from 2003, the average earnings with a high school degree was $28,950 • For the bachelor’s degree, the average earnings was $53,264 • The increase was $24,314 per year

  7. Earning Increase with SCH BA/BS Earnings HS Earnings SCH

  8. Sheepskin Effect BA/BS 16% HS

  9. Learning Curve Function BA/BS HS FR SO JR SR

  10. Value of SCH and Degree BA/BS $7266 $155 $137 $121 $109 FR SO JR SR

  11. Average Increase in Earnings for One Academic Year Total FR SCH X $109 = ( ) Total SO SCH X $121 = ( ) Total JR SCH X $137 = ( ) Total SR SCH X $155 = ( ) Number Grad X $7266 = ( ) ________ Total $51.4Mill

  12. Combined Undergrad and Grad • Carry out same procedure for Graduate Students • Average increase in earnings per year for Undergrads and Grads is $63.5 Mill

  13. Present Value for One Academic Year • Spread average increase in earning over years of work, discount 5% gives: Present Value of $750 Mill. • Contrast: UNO expenditures on Wages and Salaries, Operations, and Capital and Equipment Expenditures is $96.7 Mill.

  14. UNO’s Contribution to Omaha • First Pass: $96.7 mill or 0.4% • Second Pass: $157.0 mill or 0.6% • Third Pass: $810.3 mill or 3.2%

  15. Regional Development • Obtain SCH and Degrees back to ’65. • Multiply by Ave Value SCH and Value of Degree. • Consider Mortality, Attrition from Region. • Results: Total Value Added by Embodied Human Capital due to UNO: $1,193.7 Mill ($1.2 Bill)

  16. Other Considerations • Foreign Student Expenditure • UNO Retirees Expenditures • UNO Wage and Salaries • UNO Operations, Capital and Equipment • Add Social Benefits • Apply Multiplier for Indirect and Induced Effects

  17. Social Benefits- Dollars per SCH • Absenteeism Savings $5.36 • Medical Costs $2.87 • Incarceration Savings $1.71 • Crime Victim Savings $1.88 • Added Productivity $ .81 • Welfare Savings $3.57 • Unemployment Savings $2.04

  18. UNO’s Contribution to Omaha • First Pass: $96.7 mill or 0.4% • Second Pass: $157.0 mill or 0.6% • Third Pass: $810.3 mill or 3.2% • Fourth Pass: $1.74 bill or 6.9%

  19. Investment for UNO Students: Opportunity Costs • Students Not Working- $12.98 mill • Students Working- $102.31 mill • Lost Leisure - $8.18 mill • Tuition and Fees - $31.72 mill • Books and Supplies - $10.43 mill • Pell and other Grants - ($17.22 mill) ___________ Total $148.40 mill

  20. Summary of Value to Students • Return on investment- 17.3% • Payback 7 years 2 months

  21. Investment for the State of Nebraska • Considerations • Attrition • University Expenditures • Indirect/Induced Earnings • Taxes • State Appropriations

  22. Returns to the State of Nebraska • Considered as an investment, the return will be 17.4 % • Payback of state appropriations in 6 years, 7 months

  23. Other Contributions • Attract New Industries • Flexible Work Force • Education a Consumption Good • Informed and Involved Citizens • External Effects

  24. Faculty “Rockstars” • 200 students per year. • 3 credit hours per student. • $146 per SCH. • $87,600 increase earnings per year. • Value over students working life – approx. $1.75 mill. • Value over educator’s career – approx. $35 mill.

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