Presenting the Socioeconomic Benefits of

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Presenting the Socioeconomic Benefits of
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Reports Produced by CCbenefits, Inc.

• Main Volume (99 pages)

• Executive Summary (6 pages)

• Fact Sheet (1 page)

• Detailed Results (10 pages)

• Narrow Broad Taxpayer Results (1 page)

• PowerPoint Presentation

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Economic Region
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Components of the Study
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Beginning with the
Regional Analysis
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Regional Economic Development
What we measure

• We begin with the usual multiplier impacts due
  to college operations spending.

• To this we add impacts associated with past
  students still active in the state workforce.

• Together, these measure the impact of the
  colleges relative to total earnings in the state.
  

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College Operations Spending
Colleges are similar to other local industries in
that they spend money and employ people. College
operations spending include direct earnings of
faculty and staff, as well as the indirect
earnings due to associated multiplier effects.
1. College Operations Spending
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College Operations Spending
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Past-Student Productivity Effects
1. College Operations Spending
2. Past-Student Productivity Effects
In addition to college operations spending, we
add the impacts (higher earnings) associated with
students who have obtained their education at the
colleges and are still active in the state
workforce.
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Past-Student Productivity Effects
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Total Earnings in State
1. College Operations Spending
2. Past-Student Productivity Effects
3. Total Earnings in the State
This comprises all of the earnings in the state.
This provides the backdrop for expressing the
relative role of college operations spending and
past student productivity effects in the state
economy.
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Total Earnings in State
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To Summarize
This comprises the total earnings in the state.
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To Summarize
This is the salaries and wages of the college,
expressed as a fraction of the states total
earnings.
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To Summarize
The multiplier is the sum of direct and indirect
earnings divided by direct earnings.
Indirect earnings stem from the action of
multiplier effects. They occur as college
salaries and operating expenditures ripple
through the state economy.
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To Summarize
We now add the direct earnings of past students
still active in the state workforce. These
students add value because of the education they
obtained while attending college.
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To Summarize
Next we add the earnings indirectly explained by
the actions of past students in the state economy.
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To Summarize
The total shows the extent to which the
activities of the college impact the state
economy.
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Investment Analysis
Continuing with the
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Investment Analysis Component
What we measure

• The student benefits due to higher earnings

• A broad collection of external social benefits
• Medical savings
• Crime savings
• Welfare and unemployment savings

• The return to taxpayers for their support
• Broad taxpayer perspective
• Narrow taxpayer perspective

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Student Benefits
This figure shows the present value of increased
future earnings as a direct result of the
students education.
Student costs consist of the tuition paid by the
students and, most importantly, the opportunity
cost of time (earnings foregone).
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Student Benefits
Benefit/Cost Ratio The ratio of benefits over
costs. A 1.5 ratio, for example, means that every
dollar invested will return a cumulative 1.50 to
the investor over the time period
analyzed. Criterion for feasibility The B/C
ratio must be greater than or equal to 1.
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Student Benefits
Rate of Return the average earning power of the
money used over the life of the investment. A 15
rate of return, for example, means that the
revenues collected over time will equal the
costs, plus generate a 15 return. Criterion for
feasibility the rate of return must exceed the
returns from alternative uses of the same money.
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Student Benefits
Payback Period This is the length of time needed
from the beginning of the investment before the
cumulative future revenues return all of the
investments made.
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Student Benefits
Some Key Findings
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Social Benefits
The medical, crime and welfare/unemployment
savings are avoided costs, i.e., the reduced
burdens on employers and taxpayers. These
external social benefits are generated annually
as the education level of the workforce
increases.
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Return to Taxpayers
Broad Taxpayer Perspective
Taxpayers Costs State Appropriations Property
Taxes Taxpayer Benefits Higher Earnings
Social Benefits
The broad perspective State taxpayers invest,
but beneficiaries are widely dispersed (students,
business community, society). We count all of the
benefits regardless of to whom they accrue.
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Return to Taxpayers
Narrow Taxpayer Perspective
Taxpayers Costs State Appropriations Property
Taxes Taxpayer Benefits More Taxes Collected
Social Benefits
Here we only count the book revenuesthe monies
actually returning to the state treasury. For
example, as students increase their earnings, the
state collects more sales, income, and property
taxes.
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Return to Taxpayers
Narrow Taxpayer Perspective
Note that for a public investment, the typical
expectation is that the benefit/cost ratio be gt 1
and that the rate of return be gt 4. As you can
see, the results far exceed these expectations.
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What does all this mean?
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To Summarize
IT PAY BACK
IT PAY TO INVEST
IT PAY TO LEARN