Miami Dade College Boosts Local Economy by $3.3 Billion Annually, Study Finds
Miami, March 18, 2013 - At a time when many economic challenges exist, a recent study by Economic Modeling Specialist, Inc. (EMSI), a provider of employment data and economic analysis, found that the average annual added income to the community due to the activities of Miami Dade College (MDC) and its former students equals$3.3 billion.
“This study reinforces the major role that MDC plays in the community as its great equalizer. We are very proud of the many contributions that MDC has made academically, culturally and economically. However, the greatest contribution is the people, nearly 2 million alumni,” said Dr. Eduardo J. Padrón, president of MDC. “This study reconfirms the college’s commitment to provide its students with the knowledge, skills and values they will need to succeed, and the entire community benefits.”
The study goes on to say that for every dollar students invest in MDC, they receive a cumulative $6.50 in higher future income (discounted) over the course of their working careers. Florida benefits from improved health and reduced welfare, unemployment, and crime, saving the public some $35.4 million per year. And, taxpayers see a rate of return of 10.0% on their investment in MDC.
In this study, EMSI applies a comprehensive model designed to quantify the economic benefits of community and technical colleges and translate these into common sense benefit/cost and investment terms. The study includes two major analyses:
1. Investment Analysis: Treats education funding as an investment, calculating all measurable returns and comparing them to costs, from the perspectives of students, taxpayers, and society as a whole.
2. Economic Growth Analysis: Measures added income in the region due to college operations, student spending, and the accumulated skills of past and present students still in the workforce.
Benefits of higher education are most obvious from the student perspective: students sacrifice current earnings (as well as money to pay for tuition) in return for a lifetime of higher income. Compared to someone with a high school diploma, associate’s degree graduates earn $11,000 more per year, on average, over the course of a working lifetime (undiscounted).
From an investment standpoint, MDC students enjoy a 19.8% rate of return on their investments of time and money. This compares favorably with returns on other investments, e.g., long-term return on stocks and bonds.
The corresponding benefit/cost ratio is 6.5, i.e., for every dollar students invest in MDC education, they receive a cumulative of $6.50 as noted earlier in higher future income over their working careers. This is a real return that accounts for any discounting that occurs during the entire period. The payback period is 7.6 years.
From the perspective of society as a whole, the benefits of education accrue to different publics. For example, MDC students expand the state’s economic base through their higher incomes, while the businesses that employ them also become more productive through the students’ added skills. These benefits, together with the associated ripple effects, contribute an estimated $575.8 million in taxable income to the Florida economy each year.
As they achieve higher levels of education, MDC students are also less likely to smoke, abuse alcohol, draw welfare or unemployment benefits, or commit crimes. This translates into associated dollar savings (i.e., avoided costs) to the public equal to approximately $35.4 million annually, as mentioned above. These are benefits that are incidental to the operations of MDC and accrue for years into the future, for as long as students remain active in the workforce.
MDC affects the local economy in three ways: (1) through its local purchases, including wages paid to faculty and staff; (2) through the spending of students who come from outside the region; and (3) through the increase in the skill base of the local workforce.
In conclusion, the results of this study demonstrate that MDC is a sound investment from multiple perspectives. The college enriches the lives of students and increases their lifetime incomes. It benefits taxpayers by generating increased tax revenues from an enlarged economy and reducing the demand for taxpayer-supported social services. Finally, it contributes to the vitality of both the local and state economies. These results are also very timely as MDC seeks local funding for the college as exists in most other states to continue its mission of open access, affordability and excellence.
Juan Mendieta, 305-237-7611, firstname.lastname@example.org, MDC communications director
Sue Arrowsmith, 305-237-3710, email@example.com, media specialist
Kai Hill, 305-237-3359, firstname.lastname@example.org, media specialist
Roxana Romero, 305-237-3366, email@example.com, media specialist
Alejandro Rios, 305-237-7482, firstname.lastname@example.org