The Economic Impact of the University of Virginia: How a Major Research University Affects the Local and State Economies

The University of Virginia, by providing world-class educational opportunities to citizens of the state, has played an important role in the lives of Virginians since its founding in 1819. The University enhances economic opportunity and provides a steady stream of citizens prepared to assume positions of leadership in business and in public service. In carrying out its core missions of education, research, and service, U.Va. has a vital impact on its community, on its region, and on the entire state. A complete picture of the economic impact of the University requires both a close-up lens, for the impact on the local community, and a wide-angle lens, for the impact on the state as a whole. Earlier studies of this sort have concentrated mostly on the local effects of university spending. This study extends the earlier work by adding to the traditional local economic impact analysis an overview of how a large public research university can contribute to the economy of an entire state. In making our case we review the literature on the economic rationale for state support of a major research university with a large component of students from other states and from other nations.