Hampshire County’s four colleges add $1.5B to state economy yearly


Staff Writer

Published: 07-16-2023 6:28 PM

The four private colleges in Hampshire County generate an annual economic impact of more than $1.5 billion to the Massachusetts economy, including more than 8,000 jobs, according to a report from the Association of Independent Colleges and Universities.

Though the four colleges’ total economic impact is measured across the state, the AICU report notes that within the western Massachusetts region, the impact is $1.1 billion — about one-sixth of the total real GDP of Hampshire County, according to the latest figures from the Bureau of Economic Analysis. That doesn’t include the economic impact of University of Massachusetts Amherst, which is a publicly funded university.

The report is the first such one produced by the AICU, which represents 59 private universities and colleges across the state. The report was published in March to demonstrate to the new administration of Gov. Maura Healey how much value these schools provide.

“Higher education is such a crucial part of the Massachusetts economy,” said Rob McCarron, CEO of the AICU. “It attracts talent, researchers and students from around the world, but we never really knew exactly what it meant. So we commissioned this report to really look at the hard data to help remind elected officials of just how important these institutions are.”

The study broke down the economic impact the colleges provide to the state into four categories:

■Operations, which include the institution’s employment opportunities and purchasing of goods.

■Capital, what the colleges spend on investments and improvements.

■Ancillary spending, by students and those visiting them.

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■Alumni wage premium, the value-added amount that graduates of these colleges are likely to earn in the future.

Smith College in Northampton led all private colleges in Hampshire County in terms of its total economic impact, at $621 million, including supporting more than 3,000 jobs in the state.

Some of the ways Smith contributes to the local economy includes sizable donations to the city of Northampton’s planned Community Resilience Hub, as well as to Cooley Dickinson Hospital for its expansion and renovation of the Emergency Department and mental health services, said Carolyn McDaniel, a spokesperson for the college.

“We are one of the largest employers in the area and the second largest in Northampton after Cooley Dickinson Hospital,” McDaniel said. “We are committed to supporting the city of Northampton and many local entities through contributions to efforts aligned with our priorities.”

Amherst College came in second with an economic impact of $468 million, including supporting 2,720 jobs. Mount Holyoke had an impact of $344 million, including supporting 1,910 jobs; and Hampshire College had an impact of $82 million, including supporting 510 jobs.

“We really wanted to show that the impact goes from one end of the state to the other,” McCarron said. “Each of the institutions and campuses are really generating a significant economic impact.”

McCarron has met with Yvonne Hao, the state’s secretary of economic development, to discuss the AICU’s report. He said Hao agreed with the assessment, referring to the state’s higher education as its “crown jewel.” AICU is also working with the Healey administration on its economic development strategy.

“We’re engaged in that process right now, to think about how we can be partnering with the state to attract and retain more talent,” McCarron said. “What can we be doing to serve needy and deserving students from Massachusetts, to incentivize them to stay here to attend college?”

The total impact for all 11 private colleges across western Massachusetts, including those in Berkshire, Hampden and Franklin counties, totaled $3.3 billion, including supporting 19,400 jobs in the state. Statewide, the total economic impact of private colleges and universities was $71 billion, supporting 320,000 jobs, about one-eighth of the state’s GDP.

Alexander MacDougall can be reached at amacdougall@gazettenet.com.