The Economic Contribution of America’s Community and Technical Colleges

July 15, 2008 by Emsi Burning Glass

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This study, “Economic Contribution of America’s Community and Technical Colleges” (PDF link), was authored by CCbenefits (now EMSI) in 2004, and showcases the socioeconomic impact model (SEIM) framework used in EMSI’s college studies.

The analysis is based on a sample of 262 colleges in 14 states, representing roughly one-third of the current total enrollment in community and technical colleges in the country. The findings from the sample were used to generate results by inference for the some 1,200 colleges in the United States. Two major analyses are conducted: 1) investment analyses from the perspectives of the students and the taxpayers, and 2) economic growth analysis to determine the relative contribution to GDP by the community and technical colleges.

Some of the findings include:

  • The average associate’s degree holder will earn $9,000 more annually ($325,000 lifetime) because of that degree.

  • Associate’s-level education confers a number of benefits to students as well as the general public. The analysis translates the economic growth effect of community and technical college education into increased state and local government revenues (via increased tax receipts). Added to these are an assortment of social savings, e.g., avoided costs stemming from reductions in incarceration, welfare, health care support, and others.

  • Taxpayers, who bear about 58% of community and technical college costs, receive a 16% return on their investment in the colleges—well above the 4% opportunity cost of funds.

  • The bottom line: colleges return more to taxpayers than they cost.