Investment in Higher Ed is Investment in Arizona’s Future Economy

Arizona Student Regents
5 min readDec 14, 2020

As a native Arizonan, I have had the opportunity to see our state grow at an unprecedented rate. Just last year, Maricopa County was ranked the highest in the nation for population growth by county for the third year in a row. With Arizona attracting people from throughout the country, our state is both a symptom of — and a catalyst for — a rapidly accelerating economy and increasingly demanding job market. However, it is pivotal to advance drivers accelerating the growth of Arizona in the New Economy. Herein lies the critical importance of higher education — at the intersection of driving Arizona’s future economic success and addressing emerging challenges brought on by our state’s staggering economic growth.

The College Wage Premium Remains Substantial

Regarding the direct impact of higher education on the economy, the benefits are obvious. On average, a college graduate earns $33,000 more than a high school graduate when entering the workforce, allowing for economic benefits for individuals and increased income taxes collected by the state.

These higher annual wages are an economic marker of the value of a college degree in today’s workforce. A well-educated public not only earns more on average but is also more competitive in the postsecondary employment market, drawing an influx of businesses that capitalize on a thriving economy and a highly qualified workforce. In turn, these new industries bring a wealth of economic benefits. Universities also drive economic prosperity by generating jobs and attracting students and employees from around the world. In 2017 alone, the economic output of the three public universities in Arizona was estimated at $11.1 billion dollars when accounting for university employment, non-payroll operating expenditures, university construction, and spending by faculty, staff, students and visitors.

Fiscal benefits of higher education are considerable as is the social role that education plays in our democracy. In Democracy and Education (1903), John Dewey describes knowledge disseminated through education as

“humanistic in quality, not because it is about human products in the past, but because of what it does in liberating human intelligence and human sympathy.”

This intelligence and sympathy give rise to the important mechanisms of a healthy democracy such as civil discourse, but the social benefits of higher education do not end there. In fact, the social impacts of higher education are intrinsically linked to economic competitiveness. For example, research indicates that college-educated students have better health than those with only a high school diploma. Thus, a well-educated public is likely to see vast improvements in public health, reducing the state’s spending on Medicare and Social Security disability income, and also freeing up capital for individuals to stimulate the economy. A highly educated population is also likely to receive better healthcare benefits from employers.

Risk Estimates of Cardiovascular Disease From Age 45 to 85 Years According to Educational Attainment, 1987 Through 2013

Another testament to the fiscal benefits from the social impact of education comes in the form of public incarceration. It is well documented that college graduation and postsecondary attainment rates are directly tied to the prevention of adult incarceration. This means less government spending on corrections and crime prevention as well as reduced crime-related social costs, including lower property values and insurance. With less incarceration, there are more members of the public available to drive economic success.

Inherently, higher education institutions bring substantial return on investments for the state. Not only do the universities return substantial direct fiscal benefits to the population and its economy, but the resulting cost reductions in areas indirectly related to education allow for the allocation of newly freed capital into other priority areas, including infrastructure and law enforcement. With this increase in economic stimulation comes new challenges and opportunities. A state with high population growth like Arizona must now find a way to prepare a continually increasing number of new residents for a growing workforce. Higher education institutions again serve at the crux of this issue — ensuring the next generation of citizens is competitive in the technology-driven New Economy and its workforce.

Arizona’s Universities

How high is the ROI for the state? College Success Arizona breaks down how attainment rates in Arizona would directly impact the Arizona economy. Investments that would promote equity in college-going rates across different ethnic backgrounds would double our current economic growth rate, leading to some $3 billion in realized gains. If we invest in our K-12 pipeline and higher education institutions so we have attainment levels equal to Colorado, our state could expect gains closer to $12 billion. It is important to remember that this is not only material; these social and fiscal returns yield a higher quality of life for all citizens of Arizona.

The Economic Benefits of Increasing Educational Attainment in Arizona

Outstandingly, in the past five years Arizona has gone from a state with nearly $1 billion in debt to a state with $1 billion in its rainy day fund. Investing in education now ensures a more competitive economy in the future-focused on bettering the lives of its constituents rather than spending on costs such as incarceration. Of course, there are many barriers to accelerating attainment rates across the board. We must continue to invest in our teachers, the K-12 pipeline, and our higher education systems, and we must continue to invest in a culture centered around education. A better Arizona is one that focuses on education for the generations to come.

Until next time,

Nikhil Dave



Arizona Student Regents

The appointed student regents of the Arizona Board of Regents: Anthony Rusk and Nikhil Dave