The University of California is a key economic catalyst for the state, generating $46.3 billion in annual economic activity for California and contributing $32.8 billion toward California's gross state product through direct spending and multiplier effects, according to an independent economic impact report released today.
Put another way, every $1 the California taxpayer invests in UC provides the foundational support that, supplemented by revenues from other sources, results in nearly $14 in overall economic output.
The study by Economic & Planning Systems Inc. further shows that UC supports 1 in 46 jobs in California, uses state funding to leverage significant additional non-state revenue that benefits Californians and makes economic contributions to all regions of California through the economic ripple effects of its activities. The report did not measure the impact of UC's development of human capital — additional benefits such as spinoff companies created from UC research, tax revenue generated by UC activities or the social and economic contributions of UC alumni.
"UC is a cornerstone of the California economy," UC President Mark Yudof said. "This report shows that the state receives a strong direct return on its investment in public higher education. These findings tell part of a larger story of the 143-year relationship between the university and the state it serves. But an even greater return on investment, beyond the impact of expenditures, occurs because UC helps transform lives and society through its education, research, public service and health care. It nurtures the human capital that leads to startup companies, new product lines, agricultural productivity and job creation."
The study, "The University of California's Economic Contribution to the State of California," is the first UC economic impact report conducted on a systemwide level since 2003. The study is the first to isolate the economic contributions of the UC Health enterprise, which accounts for more than a third of UC's overall economic output.
The report breaks out the economic contributions of UC spending statewide, by each of 14 regions, by general campus and by health sciences campus. Among the report's key findings:
- Every $1 that the California taxpayer invests in UC and its students results in $9.80 in gross state product and $13.80 in overall economic output. The state provides a foundation of $3.35 billion in funding for UC activities (state general funds plus Cal Grants, contracts from state agencies, the state portion of Medicare and Medicaid payments, and special state appropriations for mandated research programs); that investment, supplemented by additional revenues leveraged from other sources, produces the $32.8 billion in gross state product and $46.3 billion overall economic activity in the state.
- UC operations and outside spending by its faculty, staff, students and retirees supports 1 out of every 46 jobs in California — approximately 430,000 total.
- With more than 190,000 staff, UC itself is the third-largest employer in California, behind only the state and federal governments, and directly employs substantially more people in California than top private-sector employers such as Kaiser Permanente, Walmart, Pacific Gas & Electric or Wells Fargo.
- UC brings in about $8.5 billion in annual funding from outside the state, including $7 billion from the federal government. This leveraging of California-based funds with out-of-state money is most evident in UC's research enterprise, where every $1 from private and government sources in California is supplemented with $2.27 in funds from outside the state, much of it from the federal government.
- UC-related economic activity touches every corner of California, making important contributions even in regions without a UC campus.
- UC Health — UC's five academic medical centers and 16 health professional schools — plays a major role in UC's economic contribution to California, generating about 117,000 jobs in the state, $12.5 billion in contribution to gross state product and $16.7 billion in economic activity. Gross state product is the market value of final goods and services produced within a state in a given period.