1. Higher ED and THE OKLAHOMA ECONOMY
November 13, 2018
Mark C. Snead President and Economist

2. An Achille’s Heel is a weakness in spite of overall strength, which can lead to downfall.
Wikipedia

3. DATA SUGGEST:
The ‘higher education’ problem in OK is probably more severe than generally believed…
… and the economic gains from solving it are probably greater than generally believed

4. OK Continues to trail u.S. Ed attainment But the target is Shifting

5. Key shifts:
Gains on non-high school completion are largely exhausted in OK and other states
Greatest influence on labor supply is now taking place at higher levels of education
Higher ed requires extended years of training
Greatest income gains are in higher education

6. OK is struggling to boost higher education

7. ED Gaps reflect multiple years of activity

8. Education gaps are persistent

9. Human capital still works as an economic development strategy particularly Higher Education

10. Higher Ed ‘Magic’ is traced to:
Broad labor force influence
Much greater income gains per person
Education is a ‘good’ public good
Positive economic growth effects

11. Ed is a key piece of the U.S. labor force participation puzzle

12. Ed is a key factor in joblessness

13. U.S. income premiums remain intact

14. OK Income premiums Remain quite large

15. OK Income gains strong at all ed levels

16. OK Real Income gains are very strong relative to u.s.

17. Too many college grads? Data and research say probably not but,
2. College degree ≠ college education

18. Is public funding of higher ed a Good deal for taxpayers?

19. Current public opinion?
Yes, economic benefits to society result from a more educated workforce
Greatest economic benefits are from higher forms of education
Most of the costs should be borne by students who receive most of the benefits
Public spending on student financial aid is preferred over direct operational expenditures

20. OK Higher ed is a More than $5 billion Operating entity

21. spending on higher ed is not a net drain One of a handful of Govt expenditures with (+) Multipliers

22. Other aspects of State Impact:
Key sources of regional activity across the state
Higher ed employs many of the state’s most highly educated workers, particularly in medicine and research
Nearly all expenditures take place in-state
At least $500 million in out-of-state student spending
Net inflow of college students into OK is highly positive

23. Modeling economic growth effects from education

24. Link from Ed to Earnings - Levels

25. Link from ED to Earnings – Change

26. Ed is one of several ‘growth factors’
Strong agreement on:
Education
Labor force participation rates
Private capital investment
Traded activity outside the region
Much less agreement on:
Infrastructure
R&D activity
Others…

27. We construct a 50-state model using the top 4 Growth factors
Relative to the 50 states, Oklahoma has:
Low educational attainment
Low labor force participation rate
High private capital investment (oil and gas)
High traded activity outside the region
OK is weakest on labor force issues

28. Model results suggest:
Recent income strength in OK is far greater than suggested by education gains
Income in OK is far lower than suggested by the high level of traded activity
State income consistent with high use of private capital per worker
State income consistent with low participation rate

29. (Cont.) Model Results suggest:
Matching the U.S. in educational attainment would:
raise the state’s employment-population ratio from 58.1% to 60.6% and add 57,000 more jobs (36th to 24th in participation)
increase total personal income in the state by an estimated 15.5%:
$7,080 per capita; (28th to 13th)
$28 billion annually (28th to 24th)

30. Significant Barriers remain
Cultural change – missionary work
Education illusion traced to oil/gas
State funding share
State tax policy

31. Higher ed funding remains weak

32. state Tax revenue Rebound underway

33. Higher ED and THE OKLAHOMA ECONOMY