UMaine Annual Economic Impact Estimated at $698 Million
Contact: Joe Carr at (207) 581-3571
ORONO — A new report by economist Todd Gabe estimates that expenditures associated with the University of Maine’s day-to-day operations, combined with student and visitor spending, create an annual total economic output of $698 million to the Maine economy.
Gabe’s calculations, which show $7.65 in total economy activity for every dollar of state investment, are based on data from the year ending June 30, 2006. His new report, “The University of Maine’s Contributions to State Economic Development,” updates a similar study completed five years ago.
Gabe is an associate professor in UMaine’s School of Economics.
In the report, Gabe calls UMaine — the state’s flagship, land-grant university in Orono — Maine’s “leading driver of economic development.
“Along with the institution’s sizable economic impact, the skills and knowledge obtained at UMaine allow our graduates to make productive contributions to the Maine economy,” Gabe notes. “It helps entrepreneurs come up with new ideas, and helps businesses expand and support new investments… the whole state wins with a strong UMaine.”
As part of this new study, Gabe calculated the aggregate increase in lifetime earnings from a single graduating class, projecting that amount over the course of a typical work career. By that measure, Gabe figures that each graduating UMaine class adds a total of approximately $515.5 million to Maine’s economy.
He arrived at that figure by estimating the number of graduates who stay in Maine to work and developing a formula based on 2000 U.S. Census statistics suggesting that a college degree adds “a $16,397 annual wage premium in Maine.” The additional income associated with graduate degrees makes the real number significantly larger.
The report also estimates that visitors to UMaine spend $15.2 million in the local economy on an annual basis.
“These numbers serve to quantify an important aspect of what UMaine means to the people of this state,” says UMaine President Robert Kennedy. “UMaine provides statewide outreach, most notably through Cooperative Extension operations in every Maine county, research that leads to businesses and jobs, and unique, high-quality educational opportunities. In addition, Prof. Gabe’s report demonstrates that UMaine has a tangible impact on Maine’s economy.”
Kennedy says that UMaine’s economic impact is one of several indications of UMaine’s important role as an institution with statewide reach and impact.
“This fall has shown enrollment gains across the board, with new record levels of overall enrollment and first-year enrollment.” Kennedy says. “With regard to statewide impact, it is notable that our first-year class includes more Mainers than any class ever enrolled at a Maine university — 13 percent more than last year. That group includes significantly more students from southern Maine and a sharp increase in community college transfers. UMaine is our state’s college of choice, as more Maine are recognizing it as the key to a brighter future. As Prof. Gabe’s research demonstrates the economic impact of earning a UMaine degree, it is easy to see what these trends will mean to our state’s economy for decades to come.”
Copies of the report are available upon request.