New York City Economic Impact
For over a century, Pace University’s New York City Campus has been an educational and economic asset to the greater New York area. The NYC campus enrolls over 9,000 students, employs nearly 3,000 people, and coordinates placement of students in thousands internships and clinical practice each year. In addition to our faculty, staff, and student community, Pace NYC activities and special events bring over 178,000 visitors to the area each year. As Lower Manhattan’s only research university, Pace is an important academic presence with an economic impact reaching throughout the region.
Pace University spending on payroll, construction, procurement and other expenses has a significant impact, generating hundreds of millions of dollars of economic activity for the City and the region. Likewise, our students and visitors to our NYC campus spend on meals, entertainment, transportation and retail purchases, all of which has a tremendous impact on the local economy.
In total, Pace University NYC’s impact on the regional economy amounts to $681.9 million in increased output, $220.7 million in earnings, and 5,861 jobs1. This can be broken down into three major areas of impact: University Spending, Student Spending and Visitor Spending.
- University Spending: In the 2017 fiscal year, our NYC campus expenditures topped $229.8 million, contributing $85.1 million in salaries and benefits, $4.8 million in sponsored research, $105.8 million in scholarships, $15.7 million in capital projects, and $54.1 million in procurement, utilities and plant contracts. The multiplier effect, or secondary impact, of Pace NYC expenditures, as determined by the Regional Input- Output Modeling System (RIMS II) developed by the Bureau of Economic Analysis of the U.S. Department of Commerce, generates an estimated $473.8 million in increased economic output, $165 million in earnings and 4,055 additional jobs.
Additionally, Pace makes significant contribution to state and local government taxes. In fiscal year 2017, the University withheld more than $9.5 million in NYC and NYS taxes from the employment income of all NYC and Westchester employees. In addition, we contributed over $500,000 in Metropolitan Commuter Transportation Mobility (MCTM) tax, and $1.5 million in property taxes.
- Student Spending: Off-campus student spending also generates economic activity in the region. In fiscal year 2018, our NYC students spent $93.3 million for off-campus housing, food, entertainment, housing, transportation, books, and other personal expenses. This spending supports employment, economic output and earnings in industries such as retail trade, real estate, food services, among others thereby generating $162.5 million increase in economic output, $41.3 million in earnings and 1,325 jobs.
- Visitor Spending: In fiscal year 2018, over 178,000 people visited the NYC campus for theater and other performances, as well as conferences, camps and speaking engagements. Visitors spent $23.9 million at restaurants, hotels, retail stores, and other community businesses. The secondary impact of visitor spending generates an estimated $45.6 million in economic output, $14.4 million in earnings and 480 full-time equivalent jobs.
Putting it all Together
Pace University’s NYC has been an important neighbor to the Lower Manhattan community for over a decade – and indeed Pace is a strong economic vehicle generating nearly $700 million in economic impact in the area.
In order to define the economic impact of Pace University, New York City, we looked at several measures and estimates including the overall operating budget for the campus, the number and profile of students, and visitor spending. We calculated the multiplier effect, or secondary impact, of Pace NYC expenditures as determined by the Regional Input-Output Modeling System (RIMS II) developed by the Bureau of Economic Analysis of the U.S. Department of Commerce.
Economic Impact of University Spending
Economic multipliers were obtained from the BEA and applied to the overall University expenditures. In order to estimate how Pace NYC expenditure contributed economic activity in the region, we applied output, earnings, and employment multipliers associated with the industry Junior colleges, colleges, universities and professions schools-611A00. According to the BEA:
(1) Output represents the total dollar change in output that occurs in all the industries for each additional dollar of output delivered to final demand by the Industry corresponding to the entry
(2) Earnings represents the total dollar change in earnings of households employed by all industries for each additional dollar of output delivered to final demand by the Industry corresponding to the entry
(3) Employment represents the total change in number of jobs that occurs in all industries for each additional 1 million dollars of output delivered to final demand by the industry corresponding to the entry
These multipliers were applied to the NYC Campus expenditure of $229.8 million to determine the indirect and induced impact University spending contributed to the major industries.
Economic Impact of Student Spending
While tuition and fees, and room and board for on-campus students, is already included in the overall University budget, we further estimated student spending off-campus. Estimates of student spending on books, living allowance, food, travel, and personal expenses are available in the University’s Cost of Attendance (COA) budget. With this information, and numbers of in- residence students and non-resident students, both independent and dependent, we able to allocate students to several spending profiles.
Multipliers for Retail Trade: Industry Codes 29 & 30 were applied to all student spending on personal expenses, books, and food, estimated at $33.9 million. Multipliers for Real estate: Industry Code 48 were applied to the housing budgets for students classified as “living independently.” These off-campus housing expenditures were estimated at $54.9 million. Summer student spending was estimated at 25% of the annual COA, in line with comparable reports. We further assume that 70% of our part-time students are already living and working in NYC, therefore we estimated their spending at 30% of COA.
Economic Impact of Visitor Spending
In accordance with comparable reports, to determine the economic impact of visitor spending we obtained actual and estimated numbers of visitors from the University Departments of Special Events and Cultural Affairs. These included non-Pace visitors who attended events, conferences, meetings, and other activities on our NYC campus during the 2018 fiscal year. These events were categorized as “internal” special events and “external” special events. When actual numbers of non-Pace attendees were not available, we estimated the total Pace attendees to “external” events to be 10% and the number of overnight visitors at external events to be 10% of the total.
Visitors to Pace University may include prospective students, families, conference and special event participants. The visitors were categorized Day Trip and Overnight Visitors. As Pace event surveys of visitor spending are not available, we approximate visitor spending on food, entertainment, accommodation, and travel based on findings of recent comparable reports and publications2 which were then averaged:
- Day trip: $76.00
- Overnight: $364.00
Total visitor spending was estimated to be $23.4 million. Multipliers for Retail Trade-Industry Codes 29 & 30 were applied to the direct visitors spending to determine economic impact.
1 According to the BEA: Output represents the total dollar change in output that occurs in all the industries for each additional dollar of output delivered to final demand by the Industry corresponding to the entry; Earnings
represents the total dollar change in earnings of households employed by all industries for each additional dollar of output delivered to final demand by the Industry corresponding to the entry; Employment represents the total change in number of jobs that occurs in all industries for each additional 1 million dollars of output delivered to final demand by the industry corresponding to the entry.
2 US General Services Administration