Penn State is economic engine, generating over $17 billion in impact

April 23, 2009

University Park, PA — A second study on the economic power of Penn State has again revealed that the University is still the single largest contributor to the state's economy, generating more than more than $17 billion annually in overall economic impact.

In an independent report released April 23, data show that Penn State not only is responsible for directly generating nearly $8.5 billion in direct and indirect economic impact and supports nearly 67,000 jobs, but also influences an additional $8.7 billion through business services, research commercialization and the activities of alumni.

According to the report, every dollar invested in 2008 by the Commonwealth to support the operations of Penn State returned $25.06 in economic impact to the Commonwealth.

Penn State also generated nearly $647 million in tax revenue for Pennsylvania in 2008. In other words, the University returned $1.91 in tax revenue alone for every $1 it received in appropriation.

"The total impact of the University goes well beyond the operation of 24 campuses located throughout the Commonwealth and the education of more than 92,000 students," said Paul Umbach, founder and senior principal of Tripp Umbach Inc., the firm responsible for the report. "Penn State is an economic powerhouse in the Commonwealth, directly or indirectly affecting every resident of the state."

The four-month study by Pittsburgh-based Tripp Umbach indicates that Penn State's impact far outweighs other industries in the state. With the total direct, indirect and induced annual economic impact equaling more than $17 billion, the University currently creates more impact than the combined total impact of all of the state's airport hubs, professional sports teams, and arts and cultural organizations.

Stated another way, Penn State generated more than 2 percent of the state's business volume, or more than $1 out of every $50 in the state's total economy. It also attracted nearly 1 million visitors to the state annually.

Tripp Umbach initially studied Penn State's economic impact in 2004 and again in 2008 to analyze the economic factors stimulated by the University and to gauge the value of the institution to the Commonwealth. As with the current study, in 2004 Penn State was identified as the single largest contributor to Pennsylvania's economy at $13.5 billion in overall economic impact, but that estimate was exceeded due to growth in operations and investment and capital expenditures.

"Penn State is clearly one of the state's most valuable resources and a vital source of an educated workforce," said Penn State President Graham Spanier. "The university engages in research projects with over 750 companies annually, more than any other public university in the nation. In this current economic climate, the University is well-positioned to help Pennsylvania respond to its challenges, contribute to stability in Pennsylvania’s economy, and push new economic growth and development."

Additional key findings in the Tripp Umbach report include:

— The total direct and indirect economic impact of Penn State is projected to grow over the next five years, from $8.5 billion to more than $9.5 billion in 2013.

— The University annually expends more than $700 million through its research activities. Research at Penn State supports more than 18,000 additional jobs in Pennsylvania, which generates more than $1.9 billion in additional economic impact and more than $61 million in additional revenue for the Commonwealth annually.

— Penn State is the largest creator of total employment among non-governmental entities. Penn State has 44,000 employees, nearly 30,000 of them full-time. The total payroll from Penn State annually generates $805 million in direct impact through faculty, staff and technical service employees' spending.

— Penn State employees donate more than $130 million annually in charitable donations and volunteer services within the Commonwealth.

— Student spending amounts to $932 million in the state's economy.

— In 2008, out-of-state visitors to Penn State generated nearly $777 million in the Pennsylvania economy.

— The more than 250,000 alumni who live in Pennsylvania generate $1.9 billion annually in additional economic impact, and produce $59 million in additional government revenue for the state.

To view the economic impact report, visit


  • Penn State students spend $932 million in the economy statewide.

    IMAGE: Andy Colwell

(Media Contacts)

Last Updated November 18, 2010