Hi! I'm doing an economic contribution study for a public university. I understand the employee compensation is the full load cost, including the payroll, and the other employer cost (fringe benefit), such as the pension match and medical insurance match. The university has multiple campuses in the state, so I got the employee counts and payroll by county (based on the employee address and postal code). The intention for the analysis is to calculate the contribution to those counties, and the contribution to the whole state. Currently I have the total fringe benefit cost of the whole university, my question is, do I need to get the data of the fringe benefit also by county, to model the contribution to each county where there are campuses? Thank you!
Employee compensation in pubic university contribution study
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Official comment
Hello!
That is correct. You would need to have the fringe benefits by county in order to model the county level impacts of the universities operations and payroll across the state, because as you have noted, those should be included in the modeled Employee Compensation value. If this is something that you are not able to get your hands on, I would suggest utilizing the relative concentrations of income to parse your known total fringe benefit out to counties, or utilize the document found here to convert the income values to Employee Compensation.
Best,
Michael Nealy
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Thank you. I have a further question regarding this study. When estimating the economic contribution from student spending, for the specific county the campus is located, we could say the spending would have not happened if the campus were not there, thus that's a contribution, but for the whole state, can I count all the students spending? If this university weren't here, the students might attend other universities in the state and those spending would still occur. If that's the case, how do I estimate the student spending's contribution when I model the contribution to the state in general?
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Hello!
It would certainly be a more conservative approach to not consider the off campus spending of students when analyzing all of this university's campuses throughout the state, with the assumption that they might have attended another university within the same state. Another option here would be to parse out local students vs non-local students. With this option, you could model only the spending from students that come from outside of the state you are studying, the assumption here being that had it not been for this university, the spending of these non-local students would have occurred outside of this state.
Best,
Michael Nealy
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Now I think about even within a county, if one of the campus of this university weren't here, there are still other universities there for those students to attend. Can we say the students spending is not part of this university's contribution? If we take this campus out, the contribution would be from another university; but since this university is present, the contribution is made by this one. Same to the state, although there are other universities and students would go to those universities and make expenditures if this one didn't exist, that doesn't mean the students spending's contribution isn't made by this university. Students from out of the state might attend other universities in this state. What confuses me is how the "hypothetical shut down" work with the students spending (the same as increased income due to higher education, and retiree spending). It seems to me if this university shut down, those will still happen somewhere (in terms of where, it's hard to determine), but since this university is here, the spending by the students who attend this university full time should be the contribution by this university.
Also, I don't model the on campus students housing and food expenditure happened on campus, since those will become part of the university revenue and spent on university operation. I'm modeling the payroll cost and operational and capital expenditure as part of the analysis. What I'm not sure is the student spending. Do you think it's legitimate to model all the full-time students spending happened off campus?
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Hello!
While this approach is one that we have seen others use in such studies, it is a bit harder to defend. If these are students that come from the state you are analyzing, they likely would have been spending this money in a similar fashion even if they did not attend the university (or another university in the state). The more conservative approach would be to model the off-campus spending only for non-resident students, as it can be more easily argued that they would not have been in the state spending this money had it not been for them attending the school.
Best,
Michael Nealy
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