Economic Impact of the University of Illinois System

The University of Illinois System contributes $19 billion annually to the state’s economy through its research, hospital and entrepreneurial activities, along with the universities' students, visitors and alumni, according to a recent study. The U of I System's impact supports nearly 164,200 jobs – which means that one out of every 46 jobs in Illinois is supported by the activities of the universities and their students.

Students who invest in their U of I education will collectively receive a present value of $12.8 billion in increased earnings over their working lives. This translates to a return of $5.20 in higher future earnings for every $1 students invest in their education. The average annual return for students is 15.7%.

The study was conducted by Idaho-based Lightcast (formerly Emsi Burning Glass), which performed its analysis based on data from FY 2021 (July 1, 2020 through June 30, 2021).

Operations spending

The U of I System employed nearly 28,700 full-time and part-time employees (not including research and hospital employees) in FY 2021. Payroll amounted to $4.3 billion (not including payroll from research and hospital employees), much of which was spent in Illinois to purchase groceries, mortgage and rent payments, dining out, and other household expenses. The universities spent another $1.4 billion to support their day-to-day operations (excluding research and hospital expenditures).
The net impact of the universities’ payroll and expenses in Illinois during the analysis year was approximately $5.0 billion in income

Research spending

Research activities at the U of I System impact the state economy by employing people and making purchases for equipment, supplies, and services. They also facilitate new knowledge creation in Illinois through inventions, patent applications, and licenses. In FY 2021, the U of I System spent $560.4 million on payroll to support research activities.
The U of I System’s research spending generated $1.3 billion in added income for the Illinois economy.

Hospital spending impact

The University of Illinois Hospital & Health Sciences System (UI Health) would not exist without the U of I System. The hospital provides a hands-on learning and research environment for students and employs thousands of workers.
In FY 2021, $1.3 billion was spent on UI Health operations. These expenditures added a net impact of $1.6 billion in added income to the state.

Start-up and spin-off company impact

The U of I System creates an exceptional environment of discovery that fosters innovation and entrepreneurship, evidenced by the number of related start-up and spin-off companies created in the state.
In FY 2021, start-up and spin-off companies related to the U of I System generated $838 million in added income for the Illinois economy.

Impact of student spending

Around 33% of graduate and undergraduate students attending one of the U of I System universities originated from outside the state. Some of these students relocated to Illinois. In addition, some in-state students, referred to as retained students, would have left Illinois for other educational opportunities if not for the U of I System. These relocated and retained students spent money on groceries, transportation, rent, and other household expenses at state businesses.
The expenditures of relocated and retained students during the analysis year added approximately $387.2 million in income to the Illinois economy.

Visitor spending impact

U of I System brought new dollars to the economy through visitor spending at hotels, restaurants, gas stations, and other state businesses.
Typically, the U of I System universities host thousands of out-of-state visitors attracted to Illinois for on-campus events. In FY 2021, the COVID-19 pandemic reduced the number of these types of activities and out-of-state visitors.
Visitor spending in FY 2021 added approximately $3.6 million in added income for the Illinois economy.

Alumni impact

Over the years, students have studied at the U of I System's universities and entered or re-entered the workforce with newly acquired knowledge and skills. Today, hundreds of thousands of these former students are employed in Illinois.
The impact of former students currently employed in the state workforce amounted to $9.5 billion in added income during the analysis year.

Return on investment

Student perspective

The U of I System’s FY 2021 students paid a total present value of $1.3 billion to cover the cost of tuition, fees, supplies, and interest on student loans. They also forwent $1.1 billion in money that they would have earned had they been working instead of learning.
In return for the monies invested in the universities, students will collectively receive a present value of $12.8 billion in increased earnings over their working lives. This translates to a return of $5.20 in higher future earnings for every $1 that students invest in their education. The average annual return for students is 15.7%.

Taxpayer perspective

In FY 2021, taxpayers in Illinois provided $1.5 billion, equal to the contribution equal to the funding received from the state for operations, grand, and th enormal cost of pensions and benefits to the U of I System. The net present value of the added tax revenue stemming from the students’ higher lifetime earnings and the increased output of businesses amounts to $4.2 billion in benefits to taxpayers. Savings to the public sector add another $532.6 million in benefits due to a reduced demand for government-funded services in Illinois.
Dividing benefits to taxpayers by the associated costs yields a 3.1 benefit-cost ratio, i.e., every dollar in costs returns $3.10 in benefits. The average annual return on investment for taxpayers is 60.8%.

Social perspective

Society as a whole in Illinois benefits from the presence of the U of I System through an increased economic base and by savings generated by the improved lifestyles of Illinois student, savings such as reduced crime, lower unemployment, and increased health and well-being. Together, the social benefits of the U of I System equal a present value of $43.5 million.
For every dollar that society invested in the U of I System in FY 2021, society will receive a cumulative value of $4.40 in benefits, for as long as the FY 2021 student population at the U of I System remains active in the state workforce.