The state of Colorado defines its economy as one that is as diverse as its residents. Tourists generate revenue for the state, while other areas of Colorado like its ranching, farming and mining industries help to anchor the state’s economy.
Currently, Colorado’s economic activity is expected to expand this year and next year, according to a December economic and revenue forecast published by Colorado Legislative Council staff. The report’s economic outlook says ongoing job gains, rising wages and moderate consumer spending continues to sustain economic expansion in the state. However, with trade tensions and slower global economic demand, manufacturing, the energy industry and export activity are being impacted.
While Colorado’s economy is expected to expand, there’s another avenue that can be an important generator for states — colleges.
According to a report from the Brookings Institution, a nonprofit public policy organization based in Washington, D.C., the average bachelor’s degree holder contributes around $278,000 more to local economies than the average resident who holds a high school diploma.
Meanwhile, economists have found a correlation between regional economic growth and higher educational attainment. That is because areas that are educated see their residents have higher earnings. That means it is more likely that growth will occur for things like new companies and more.
When residents are educated, they are more likely to spend their money on local businesses, according to the Brookings Institution. The organization says that just because a resident doesn’t have a college degree doesn’t mean they won’t spend their money on local goods and services. However, residents are more likely to spend twice as much on local goods and services when they have a college degree, as opposed to those who don’t.
According to the Consumer Expenditure Survey, around 40 percent of pre-tax income goes toward local goods and services. That number ends up equating to $3.4 trillion a year of pre-tax income is spent on local goods and services. Around 49 percent of all spending goes toward local goods and services.
According to the Martin Prosperity Institute, an organization at the University of Toronto’s Rotman School of Management that explores requirements to achieve a prosperous future, college graduates from four-year schools added $10,985 of value to Denver, Aurora and Broomfield in 2013. The organization found that four-year college graduates in the Denver, Aurora and Broomfield areas spent an average of $13,088 in 2013 on their local economy. Other cities like New York, Los Angeles, San Francisco and Seattle saw similar spending from their four-year college graduates.
Signs and statistics from studies carried out over the years show that college graduates can help launch and maintain local economies. It’s just a matter of getting people their degrees and giving them the resources they need.