What does REMI say? sm Oklahoma Higher Education By: Josh Brownstein Associate Economist Regional Economic Models, Inc.

what does REMI say? sm

Oklahoma Higher Education

By: Josh BrownsteinAssociate Economist

Regional Economic Models, Inc.

what does REMI say? sm

Overview

• Predict the total economic impacts of the higher educational system of the state of Oklahoma

• Major impacts on graduate earnings, student expenditures, employment effects on the Oklahoma economy

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OSRHE

• Oklahoma State Regents for Higher Education provided the necessary inputs for the policy variables being analyzed– Examples of variables: capital assets, land,

construction, furniture, fixture, equipment, machinery, library materials, and infrastructure

– Analysis used for total operating expenses

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REMI analysis

• Using Policy Insight, REMI looked at the direct impact on– Institutional employment and spending– Student and visitor spending– Graduate earnings– Productivity

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Simulations

• Run a simulation from 2008 to 2050 to analyze the results

• Look at the economic impact between non-college educated students and college graduates

• 94 occupational matrix->used for analysis within occupations and

specific industries

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Economic Growth

• Benefits for the state of Oklahoma– Creation of new jobs including teachers,

maintenance workers, and other faculty opportunities

– More competitive industries with higher education

– More investment and consumption

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Graduate Earnings14.76%

Student Expenditures

5.99%

Employment10.36% Capital and

Construction Spending

0.29%Visitors and Athletics

0.16%

Productivity68.44%

Productivity Results

• As each year colleges and universities graduate a class of seniors who will be more productive than non-college educated individuals over their entire working lives

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Baseline vs. Higher Education

2008 2018 2028 2038 2048

With Higher Education $134.852 $231.687 $370.206 $584.101 $938.634

Baseline $129.528 $205.395 $312.669 $479.102 $758.871

$0$100$200$300$400$500$600$700$800$900

$1,000

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Total Employment and Labor Force Growth

107,900

185,600

248,200

302,900

353,200

23,590

135,900

205,600

265,400

314,800

2008 2018 2028 2038 2048

Employment Labor Force

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Employment

• Employment (Thousands), Graduate Earnings– Graduate earnings’ initial effect on disposable

personal income increased consumption, which in turn increased employment

2.678

34.740

67.800

101.400

134.300

0

50

100

150

2008 2018 2028 2038 2048

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Student Expenditures

• Students tend to spend money on tuition, textbooks, room and board, and other miscellaneous consumption

Consumption (Bil Nom$)

$2.312$3.694

$5.281

$7.559

$11.484

$0$2$4$6$8

$10$12$14

2008 2018 2028 2038 2048

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Employment Effect

$3.635$5.636

$8.483

$12.757

$19.594

$0

$5

$10

$15

$20

$25

2008 2018 2028 2038 2048

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Productivity Gains by Degree Type

  Consumption (Bil Nom$)

  2008 2018 2028 2038 2048 Average

PRODUCTIVITY            

Associate's $0.01 $0.24 $0.64 $1.31 $2.43 $0.93

Bachelor's $0.06 $1.08 $2.85 $5.81 $10.79 $4.12

  Graduate/Professional $0.03 $0.57 $1.50 $3.07 $5.70 $2.17

Aggregate $0.10 $1.89 $5.00 $10.20 $18.97 $7.23

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Higher Education Scenario

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Higher Education Results

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Graduate Earnings

• Disposable Personal Income (Bil Nom$)

$0.331$5.255

$13.416

$26.684

$48.692

$0

$10

$20

$30

$40

$50

$60

2008 2018 2028 2038 2048

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Analyzing Results

• In 2008, there will be an increase of $331 ($284) million in disposable income

• Annual contribution of disposable income will increase by $8.825 billion from 2008-2048

• Long run->increase disposable income, will increase economic activity leading to more economic growth for the region

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Conclusion

Thank You!