James Madison University
Office of Institutional Research

 

Research Notes

Volume 16, Number 4

October, 2002

The Economic Impact of James Madison University on the City of Harrisonburg and Rockingham County

The significant economic and cultural impact of institutions like James Madison University is generally accepted. Understanding the magnitude of the impact is helpful to both institution and community for fiscal and program planning. The Office of Institutional Research (OIR) at JMU, with technical support from the Virginia Employment Commission, periodically estimates the economic impact of the institution on the City of Harrisonburg and Rockingham County.

During spring and summer of 2002, OIR compiled estimates of University related spending within the community. University staff from Accounting Services, Payroll Services and Facilities Planning and Construction contributed valuable data and consulting services to the analysis. The Virginia Employment Commission “fed” these estimates into the IMPLAN (Impact Analysis for Planning) model. IMPLAN generated an estimate of the multiplier effect of the spending, i.e., the proportion of University related expenditures that are respent within the community by businesses and their employees. IMPLAN also estimated the total number of jobs created by the spending.

OIR found that James Madison University continues its significant economic and cultural presence within the City of Harrisonburg and Rockingham County.  In the 2000-01 academic year, JMU enrolled around 15,000 students, employed over 2,000 people in full-time positions, and had a total operating budget of  $211 million. Highlights of the study are that:

  • Over $278 million dollars in the local economy were related to spending by students, employees, and University operations. Over $195 million in direct expenditures generated an additional $83 million that was respent in the community by businesses and their employees. These conservative estimates do not include dollars generated by almost $28 million in construction expenditures per year. The analysis also could not include spending by parents and visitors that fill local hotels and restaurants for events like Homecoming, Parents Day, and December and May Commencements.

  • Total employment related to the University, including its employees, was between 4,422 and 5,382 full-time equivalent jobs. This represents between roughly seven and nine percent of all employment in the area. Between 1,763 and 2,723 jobs outside the institution were attributed to this spending. For every $1 million spent by students, employees and the institution, between 12.5 and 17.4 jobs were created in the community.

The full text of this OIR study may be found on-line at: http://www.jmu.edu/instresrch/resrchstud/economic/ECOIMP02.pdf

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