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Economic Impact of Investment in College Education: An Analysis from Three Perspectives

This study analyzes the economic contribution of investment in college education from student, social, and taxpayer perspectives. It covers benefits, costs, and returns on investment, including added income and social savings. Economic growth analysis focuses on college operations and student productivity, emphasizing the net contribution to regional income and multiplier effects.

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Economic Impact of Investment in College Education: An Analysis from Three Perspectives

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  1. Economic Contribution of

  2. Investment analysis Economic growth analysis Study consists of…

  3. Investment Analysis • Student perspective • Social perspective • Taxpayer perspective

  4. INVESTMENT ANALYSIS:Student Perspective • Benefits—present value of increased future income • Costs—tuition and fees, books and supplies, and opportunity cost of time

  5. INVESTMENT ANALYSIS:Student Perspective benefit/cost ratio

  6. INVESTMENT ANALYSIS:Student Perspective return on investment

  7. INVESTMENT ANALYSIS:Student Perspective

  8. Added income—higher earnings and increased property income Social savings—reduced medical costs, lower crime rates, and reduced income assistance INVESTMENT ANALYSIS:Social Perspective

  9. INVESTMENT ANALYSIS:Social Perspective

  10. Benefits—added tax revenue and avoided costs to government Costs—state and local government funding INVESTMENT ANALYSIS:Taxpayer Perspective

  11. INVESTMENT ANALYSIS:Taxpayer Perspective benefit/cost ratio

  12. INVESTMENT ANALYSIS:Taxpayer Perspective return on investment

  13. Economic Growth Analysis • College operations • Student productivity

  14. Direct income of faculty and staff Associated multiplier effects Adjustment for alternative uses of funds ECONOMIC GROWTH:College Operations Effect

  15. ECONOMIC GROWTH:College Operations Effect net contribution to regional income

  16. Higher income of former students who are still active in the regional workforce Associated multiplier effects ECONOMIC GROWTH:Student Productivity Effect

  17. ECONOMIC GROWTH:Student Productivity Effect net contribution to regional income

  18. So what does all this mean?

  19. Enriches the lives of students • Increases students’ lifetime income • Generates government revenue • Reduces the demand for social services • Contributes to the growth of the economy

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