PO Box 53217, Oklahoma City, Oklahoma 73152-3217 | 405.235.3669 | www.okresearchfoundation.org

THE ECONOMIC ROLE OF OKLAHOMA’S PUBLIC COLLEGES AND UNIVERSITIES JANUARY 2019

Prepared for

RegionTrack, Inc. (regiontrack.com) is an Oklahoma City-based economic research firm specializing in regional economic forecasting and analysis. Principal authors of the report are RegionTrack economists Mark C. Snead, Ph.D. and Amy A. Jones, M.A.

TABLE OF CONTENTS

Key Findings ______________________________________________________________________________________________ 1

Introduction and Executive Summary __________________________________________________________________ 3

Studies of the System __________________________________________________________________________________ 3

System Size, Structure, and Activities _________________________________________________________________ 5

Educational Attainment in Oklahoma ________________________________________________________________ 6

Education and The Labor Force _______________________________________________________________________ 7

Economic Growth Effects of Higher Education ______________________________________________________ 9

Economic Contribution of Higher Education Operations _________________________________________ 11

I. Oklahoma System of Higher Education _____________________________________________________________ 14

Structure of the System ______________________________________________________________________________ 14

Enrollment Size and Trends _________________________________________________________________________ 15

Degree Completion Trends __________________________________________________________________________ 19

System Income and Expenditures __________________________________________________________________ 20

System Employment and Compensation ___________________________________________________________ 27

II. Educational Attainment in Oklahoma ______________________________________________________________ 29

Lagging Educational Attainment in Oklahoma _____________________________________________________ 29

Raising Overall State Educational Attainment _____________________________________________________ 31

Oklahoma Education Relative to Peer States _______________________________________________________ 38

State Policy Toward Higher Education _____________________________________________________________ 44

III. Role of Higher Education in Labor Force Development __________________________________________ 46

Education and The Labor Force _____________________________________________________________________ 46

Are Education Benefits Accruing to Residents or In-Migrants?___________________________________ 56

Student and Worker Mobility _______________________________________________________________________ 58

IV. Economic Growth Effects of Higher Education ____________________________________________________ 61

Historical Link Between Income and Education ___________________________________________________ 61

Modeling State Income Growth _____________________________________________________________________ 66

Estimating the Model ________________________________________________________________________________ 72

Potential Long-Run Income Gains from Education ________________________________________________ 75

TABLE OF FIGURES

Figure 1. Oklahoma Higher Education..................................................................................................................... 14

Figure 2. Enrollment at Oklahoma’s Public Colleges and Universities ...................................................... 16

Figure 3. Oklahoma Headcount Enrollment by Public Institution Type.................................................... 17

Figure 4. U.S. Headcount Enrollment at Public Institutions by Type .......................................................... 18

Figure 5. Change in Public University FTE Enrollment by State – Fall 2005 to Fall 2015 .................. 18

Figure 6. Oklahoma Public Institution Degree Awards by Type ................................................................... 19

Figure 7. Income Sources – All Institutions and Constituent Agencies (FY2016) ................................. 21

Figure 8. State Appropriations for Oklahoma System of Higher Education ............................................. 23

Figure 9. Total Expenditures – Oklahoma System of Higher Education .................................................... 24

Figure 10. State Appropriations Share of Higher Education Expenditures ............................................. 25

Figure 11. Higher Education Expenditures by Activity/Function ................................................................ 26

Figure 12. Oklahoma Higher Education Employment and Earnings .......................................................... 27

Figure 13. Oklahoma Educational Attainment Shares Relative to the U.S. for Ages 25+ (2016) ..... 30

Figure 14. Average Years of Schooling By State ................................................................................................... 33

Figure 15. Oklahoma Educational Attainment by Major Group – Ages 25 and Over ........................... 35

Figure 16. Change in Oklahoma Educational Attainment Shares ................................................................. 36

Figure 17. Contribution to Average Years of Schooling by Education for Ages 25+ (2016) .............. 37

Figure 18. Projected Employment Change (2016-2026) by Educational Attainment – U.S. ............. 38

Figure 19. Peer State Educational Attainment Shares and Ranks (2016) ................................................ 39

Figure 20. State Educational Attainment Relative to the U.S. For Ages 25+ (2016) ............................. 40

Figure 21. Oklahoma Educational Attainment by County (2016) ................................................................ 42

Figure 22. Share of Population 18-24 Years Enrolled in College or Graduate School .......................... 43

Figure 23. U.S. Earnings by Educational Attainment Ages 25+ (2016) ...................................................... 47

Figure 24. Distribution of U.S. Earnings by Educational Attainment Ages 25+ (2016) ...................... 48

Figure 25. Share of U.S. Population Ages 25+ With Earnings (2016) ......................................................... 49

Figure 26. U.S. Unemployment Rate by Educational Attainment ................................................................. 50

Figure 27. Median Earnings by Educational Attainment – OK and U.S. ..................................................... 51

Figure 28. Median Earnings Ratios Relative to High School – OK and U.S. ............................................... 52

Figure 29. Oklahoma Cost-of-Living Adjusted Share of U.S. Earnings ........................................................ 54

Figure 30. Oklahoma Native vs. Non-native Born Educational Attainment ............................................. 57

Figure 31. State-to-State Mobility Rate by Age Group (2012-2016) ........................................................... 58

Figure 32. Income and Educational Attainment by State ................................................................................ 63

Figure 33. Sample Correlation Matrix – Levels (50 States) ............................................................................ 71

Figure 34. Sample Correlation Matrix – Differences (50 States) .................................................................. 72

Figure 35. Long-Run Cointegration Coefficients (50 States) .......................................................................... 73

Figure 36. Estimated Long-Run Error Correction Terms - Oklahoma ........................................................ 74

TABLE OF FIGURES

Figure 37. Oklahoma Higher Education System Expenditure Impacts (FY2016) ................................. 79

Figure 38. Operational Expenditure Spillover Effects – State of Oklahoma ............................................. 83

Figure 39. Direct Expenditure Impacts by Institution and Agency ............................................................. 88

Figure 40. Estimated Economic Impacts by Institution and Agency .......................................................... 89

Figure 41. Ratio of Gross Economic Output to Appropriations ..................................................................... 90

Figure A1. Oklahoma Public Higher Education Enrollment by Institution .............................................. 92

Figure A2. Total Expenditures by Activity/Function – Research Universities (FY2016) ................... 93

Figure A2 (Cont). Total Expenditures by Activity/Function – Regional Universities (FY2016) ...... 94

Figure A2 (Cont). Total Expenditures by Activity/Function – Two-Year Colleges (FY2016) ............ 95

Figure A2 (Cont). Total Expenditures by Activity/Function – Constituent Agencies (FY2016) ...... 96

Figure A3. Capital Expenditures - Oklahoma State System of Higher Education ................................... 97

ECONOMIC ROLE OF OKLAHOMA’S