Higher Education in New Hampshire and the Economy

Ross GittellJames R. Carter Professor

Whittemore School of Business and Economics

University of New Hampshire

Topics

High education, per capita income and high technology …”The New Hampshire Way”

Supply of and demand for the college educated in New Hampshire

The economic argument for investment in higher education in New Hampshire

Looking Forward

Over the last decade NH ranks 11th of 50 states and 1st in Northeast in employment growth. NH has the 6th highest per capita income in the US (2003) ..income rank improved from 25th three decades ago

RegionEmployment

Change 1990-2003Rank

Per Capita Income 2003

Rank

US 16.8% 31,632New England 12.4% 38,171

NH 22.7% 11 34,702 6ME 16.7% 25 28,831 34VT 16.0% 27 30,740 22RI 12.5% 37 31,916 17MA 12.2% 38 39,815 3CT 7.3% 49 43,173 1

Leading State 61.9% Nevada 43,173 ConnBottom State 5.3% Hawaii 23,448 Mississippi

New Hampshire’s Strong Economic Recovery From Early 2000s Recession

Total Employment NH …Jan04-Jan05 Total employment grew 2.9% compared to US average of 1.6%

(NH ranked 8th highest) Other fast growing states are Nevada, Arizona and Florida which have much lower per capita income

Services employment grew 5% compared to US average of 1.7% (ranked 8th)

High Tech Employment in NH ..June 03 to June 04 7.8% growth, NH ranked 4 highest big turnaround from “tech bust” decline of more than 1/3rd

and ranked 50th.. NH reliant economy ..shift within high tech to growth

sectors from commodity manufacturing… growth in engineering and life sciences R&D, engineering services and testing labs and cable and other program distribution

The Education Advantage: Educational Attainment and High Technology Employment Concentration

Percentage Of Population (25+) With Bachelors Degree 2000 vs. High Tech Employment Concentration

0%

2%

4%

6%

8%

10%

12%

14%

8% 10% 12% 14% 16% 18% 20% 22% 24%

Percent w/ BA

HT

Em

p C

on

cen

trat

ion

COMA

NHVA

MD

US Avg (15.2% , 6.12%)

Educational Attainment (% of adults with a 4-year college degree) has a strong positive correlation with per capita income across the 50 states. NH is in the top tier…

Per Capita Income correlated to Percent of Adults population with Bachelors Degree median lines denote US average (15.5%, $29,847)

20000

25000

30000

35000

40000

45000

5% 7% 9% 11% 13% 15% 17% 19% 21% 23%

Percent with bachelors degree

Per C

ap

ita In

co

me

CT

MA

CO

MD

NH

NJ

10 NH Counties Correlation: Higher Education and Income

Percentage of Population Over 25 w/ Bachelor Degree or Higher vs. Per Capita Income (2000)

Strafford (26.4%, $27140)

Cheshire (26.6%, $28217)

Carroll (26.5%, $30423)

Belknap (23.3%, $30082)

Grafton (32.7%, $31338)

Merrimack (29.1%, 30907)

NH (28.6%, $33398)

Rockingham (30.1%, $36016)

Hillsborough (31.7%, $38483)

Sullivan (19.7%, $27671)

Coos (11.9%, $25242)

20000

25000

30000

35000

40000

10% 15% 20% 25% 30% 35%

% With Bachelors Degree

Pe

r C

ap

ita

Inc

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e

The Supply Side of College-Educated Labor in New Hampshire

State 1980 1990 2000 1980 1990 2000Massachusetts 7 3 2 20.0 27.2 33.1Connecticut 4 2 5 20.8 27.2 31.2Vermont 12 8 7 18.7 24.4 29.7New Hampshire 14 9 9 18.1 24.2 28.6Rhode Island 27 19 18 15.6 21.1 25.7Maine 37 28 27 14.0 18.5 23.3

U.S. 16.2 20.3 24.4

Source: 1980, 1990, and 2000 5% Census PUMS

Rank Percent of the Population

Bachelor's Degree or Higher Educational Attainment, Population 25 and Older

Notes: In each year, the District of Columbia ranked first. Other high-ranking states in 2000 were (3) Colorado, (4) Maryland, (6) New Jersey, (8) Virginia, and (10) Washington.

NH “Imported” in a High Tech/High Per Capita Income Economy NH attracting skilled workers and entrepreneurs for many reasons

(3 of 4 adults with Bachelors+ were born in another state)

Unique Quality and Character of Life Mountains and Seacoast Strong Communities (social capital) New England History and Character

Ranked First in Nation Favorable Tax Climate (as percent of income) Safest State (crimes per capita) Lowest Poverty Rate

Ranked Among Top 3 in US Child and Family Well Being (Casey, 2003) Healthiest State (Morgan Quitno, 2003) Most Livable State (Morgan Quitno, 2003)

BUT …State-wide New Hampshire Domestic In-Migration is Slowing

In-migration increased at annual rate of 17%, 1991-96 Grew at 4% rate in late 1990s Expected to decline 5% per year 2001-2006 (New England

Economic Project) There are recognized concerns about too much growth and the

effect of significant in-migration on sprawl and the character/culture of New Hampshire

There is an economic need and social value in focusing on educating “our own.”

Who will work in high tech industries in the future? Age distribution of BA/BS holders in NH compared to other NE states and US… older workers near retirement more likely to

have college degree than entry level aged Proportion of Residents with a BA/BS or More, By Age, New

England States and the U.S.

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

0.50

Age of Resident

Pro

po

rtio

n w

ith

a B

A/B

S+

MA NH VT US

Big decline in percent change in 46-64 as baby boomer generation ages in NH and US and retires

Age 45-64 Population Change Over Selected Time Periods

4.4%

36.6%

28.7%

3.8%

14.7%

50.1%

40.2%

-2.1%

-10%

0%

10%

20%

30%

40%

50%

60%

1980-1990 1990-2000 2000-2010 2010-2034

Pe

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nta

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an

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United States New Hampshire

The Demand-Side: Higher Education and the economy

Nearly 2 of every 3 new jobs in US and NH will require some college education

While less than 1 of 3 adults currently have college degree in NH

“Even in Coos County”….“BA+” Occupational Employment 2000 to 2010 demand is significant

Coos County OccupationsCounty

Jobs 2000County

Jobs 2010Growth

Rate Growth

Rate StateGrowth: County/

Openings per year

Registered Nurses 271 334 23% 30% 77% 15General and Operations Managers 245 277 13% 16% 81% 11Postsecondary Teachers, All Other 101 117 16% 32% 49% 5Counselors, Social, and Religious 98 124 27% 28% 95% 6Business Operations Specialists, All Other 109 116 6% 19% 34% 4Network and Computer Systems 41 64 56% 73% 77% 4Accountants and Auditors 75 81 8% 20% 39% 3Financial Managers 72 80 11% 19% 58% 3Recreation Workers 63 69 10% 19% 50% 3Educational, Vocational, and School 41 47 15% 31% 47% 2Chief Executives 49 55 12% 19% 64% 2Medical and Health Services Managers 33 43 30% 39% 79% 2Instructional Coordinators 33 38 15% 33% 46% 2Financial Specialists, All Other 31 36 16% 32% 51% 2Pharmacists 32 36 13% 29% 44% 1Computer Science Teachers, 29 34 17% 32% 53% 1Business Teachers, Postsecondary 29 34 17% 32% 54% 1Insurance Sales Agents 28 25 -11% 7% na 1Loan Officers 28 25 -11% 5% na 1Industrial Production Managers 29 26 -10% 1% na 1

Totals: 1437 1661 15.59% 22.49% 69.30% 70

Demand-Side Model:Assumptions (all can be varied)

Average tenure in occupation is 20 or 25 years (or 5 or 4 percent turnover per annum)

One-third of all Bachelors requiring jobs in NH will be filled by people with out of state degrees

In-state degree graduates staying to work in state public (70% or 60%) and private (40% and 30%)

High Demand assumes high turnover and low in-state-retention. Low Demand assumes low turnover and high retention. “Mean” demand is the average of High and Low.

NH Occupations requiring a Bachelors

Statewide NH Annual Annual Filled By Filled in Filled inOccupational Cluster Totals 2000 2010 Openings Openings out of state State StateTotals 120,762 151,535 9,112 7,905 33% 5,296 6,105Business 48,197 58,353 3,425 2,943 33% 1,972 2,295Education 24,347 29,981 1,781 1,537 33% 1,030 1,193information Sciences 11,228 18,938 1,332 1,220 33% 817 893Health Services 15,782 20,523 1,263 1,105 33% 741 846Engineering, Math, Physical Sciences 13,906 14,810 786 647 33% 433 526Social, Community, Arts 7,217 8,851 524 452 33% 303 351Agriculture 85 79 4 3 33% 2 2annual turnover rate 0.05 0.04 0.04 0.05

Business and Related Occupations

Occupations (sort high to low on change between 2000 to 2010)

State-wide Jobs 2000

Forcasted State-Wide Jobs 2010

BUSINESS RELATED OCCUPATIONAL CLUSTER

Business Operations Specialists, All Other 4,361 5,187 Securities/Commodities/Financial Svcs Sales Agents 2,202 2,973 Accountants and Auditors 3,313 3,989 Financial Specialists, All Other 1,194 1,573 Property/Real Estate/Community Assoc Managers 928 1,135 Personal Financial Advisors 373 542 Training and Development Specialists 1,053 1,215 Employment, Recruitment, and Placement Specialists 676 809 Cost Estimators 766 892 Market Research Analysts 461 580 Financial Analysts 440 554 Insurance Sales Agents 1,668 1,781 Tax Examiners, Collectors, and Revenue Agents 455 519 Probation Officers/Correctional Specialists 220 278 Purchasing Agents, Ex Wholesale/Retail/Farm Prod 1,198 1,256 Loan Officers 931 977 Credit Analysts 224 256 Compensation, Benefits, J ob Analysis Specialists 199 226 Loan Counselors 103 123 Wholesale and Retail Buyers, Except Farm Products 672 691 Budget Analysts 131 149 Survey Researchers 32 45 Financial Examiners 105 113 Economists 35 40

Legal Support Workers, All Other 115 102

Requires Some Skill beyond Bachelor's General and Operations Managers 11,776 13,684 Management Analysts 2,693 4,443 Financial Managers 3,321 3,952 Chief Executives 2,514 2,993 Sales Managers 1,639 2,064 Marketing Managers 1,241 1,547 Administrative Services Managers 1,174 1,442 Advertising and Promotions Managers 433 574 Human Resources Managers 964 1,070 Purchasing Managers 587 579

Subtotal 48,197 58,353

Education

Occupations (sort high to low on change between 2000 to 2010)

State-wide Jobs 2000

Forcasted State-Wide Jobs 2010

EDUCATION OCCUPATIONAL CLUSTER Elementary School Teachers, Ex Special Ed 5,789 6,985 Secondary School Teachers, Ex Special Ed/Voc Ed 3,983 5,042 Primary, Secondary, and Adult Teachers, All Other 2,776 3,582 Middle School Teachers, Ex Special Ed/Voc Ed 3,616 4,231 Preschool Teachers, Except Special Education 2,691 3,115 Special Ed Teachers, Presch/Kindergarten/Elem Sch 882 1,283 Special Education Teachers, Middle School 535 710 Special Education Teachers, Secondary School 460 610 Kindergarten Teachers, Except Special Education 537 667 Education, Training and L ibrary Workers, All Other 505 619 Graduate Teaching Assistants 297 393 Vocational Education Teachers, Secondary School 326 393

Adult L iteracy/Remedial/GED Teachers & Instructors 90 118

Vocational Education Teachers, Middle School 76 92Requires Some Skill beyond Bachelor's Education Administrators, Elementary/Secondary 1,003 1,189 Education Administrators, Postsecondary 537 637 Education Administrators, Preschool/Child Care Prg 244 315Subtotal 24,347 29,981

Health and related occupations

Occupations (sort high to low on change between 2000 to 2010)

State-wide Jobs 2000

Forcasted State-Wide Jobs 2010

HEALTH SERVICES AND RELATED OCCUPATIONAL CLUSTER Registered Nurses 11,443 14,902 Counselors, Social, and Religious Workers, AO 1,010 1,291 Occupational Therapists 564 781 Medical and Public Health Social Workers 557 770 Physician Assistants 274 440 Child, Family, and School Social Workers 537 696

Medical and Clinical Laboratory Technologists 538 656 Dietitians and Nutritionists 222 269 Occupational Health/Safety Specialists and Techs 189 225 Recreational Therapists 192 205 Orthotists and Prosthetists 57 69 Health/Safety Engineers, Ex Mine Safety Eng/Insp 89 98 Farm and Home Management Advisors ( Health bio Ag) 58 63 Athletic Trainers 52 58Requires Some Skill beyond Bachelor's Medical and Health Services Managers 1,077 1,492Subtotal 15,782 20,523

Information occupations

Occupations (sort high to low on change between 2000 to 2010)

State-wide Jobs 2000

Forcasted State-Wide Jobs 2010

INFORMATION SCIENCES OCCUPATIONAL CLUSTER Computer Software Engineers, Applications 3,823 7,684 Computer Systems Analysts 1,701 2,645 Computer Software Engineers, Systems Software 937 1,710

Network and Computer Systems Administrators 940 1,624

Network Systems and Data Communications Analysts 596 1,121 Database Administrators 294 472 Computer Programmers 1,159 1,303

Computer Hardware Engineers 407 432Requires Some Skill beyond Bachelor's Computer and Information Systems Managers 1,371 1,947Subtotal 11,228 18,938

Engineering occupations

Occupations (sort high to low on change between 2000 to 2010)

State-wide Jobs 2000

Forcasted State-Wide Jobs 2010

ENGINEERING/PHYSICAL SCIENCES/MATH Construction Managers 1,067 1,311 Civil Engineers 805 895 Mechanical Engineers 1,421 1,509 Environmental Engineers 188 261 Environmental Scientists/Specialists, Incl Health 256 321 Technical Writers 283 346 Insurance Underwriters move tro Math 426 475 Chemists 194 239 Sales Engineers 506 545 Electronics Engineers, Except Computer 593 627 Physical Scientists, All Other 215 249 L ife Scientists, All Other 156 187 Surveyors 246 272 Industrial Production Managers 1,599 1,622 Hydrologists 66 88 Biomedical Engineers 56 77 Conservation Scientists 46 57 Geoscientists, Except Hydrologists and Geographers 36 43 Airline Pilots, Copilots, and Flight Engineers 99 101 Chemical Engineers 65 65 Foresters 80 79 Materials Engineers 302 287 Industrial Engineers 849 831 Electrical Engineers 998 970

Engineers, All Other 1,784 1,716Requires Some Skill beyond Bachelor's Engineering Managers 1,433 1,484 Natural Sciences Managers 106 119 Actuaries 31 34Subtotal 13,906 14,810

Social, Community & Arts Occupations

Occupations (sort high to low on change between 2000 to 2010)

State-wide Jobs 2000

Forcasted State-Wide Jobs 2010

SOCIAL/CULTURAL/ARTS/RECREATION Recreation Workers 1,093 1,303 Graphic Designers 821 1,023 Public Relations Specialists 432 591 Social and Community Service Managers 607 756 Editors 491 595 Writers and Authors 410 514 Architects, Except Landscape and Naval 402 492 Legal and Related Workers, All Other 200 287 Art and Design Workers, All Other 722 797 Commercial and Industrial Designers 231 268 Multi-Media Artists and Animators 125 158 Landscape Architects 113 137 Meeting and Convention Planners 73 90 Interior Designers 105 117 Cartographers and Photogrammetrists 40 51 Architects/Surveyors/Cartographers, All Other 27 38 Film and Video Editors 26 36 Fashion Designers 33 37Requires Some Skill beyond Bachelor's Public Relations Managers 347 471 Legislators 410 488 Producers and Directors 194 247 Art Directors 222 260 Admin Law J udges/Adjudicators/Hearing Officers 93 95Subtotal 7,217 8,851

“Crosswalk” assumptions..

Soc&Beh EngineerFilling Occupations (rows) x Degree (cols) Business Science PhySciMath Health Education Liberal Arts Information AgriculltureBusiness 50% 30% 20%Engineering, Math, Physical Sciences 100%Social, Community, Arts 25% 75%Information 10% 90%Health Services 10% 80% 10%Education 5% 70% 25%Agriculture 100%

Degree areas in NH projections. Biggest percent gaps in Information sciences, Education, Health and Engineering/Sciences and Math – all need a 50 percent or higher increase in degrees

Gap Analysis 2002 to 2010 Filled by Percent Change Needed Current Percent Degree Number GapNeeded Change 2002 to 2010 Public Mean High Low Level Public Mean High LowGrand Total All Bachelor Degrees 1134 28% 37% 18% 7947 50.9% 2226 2916 1537Information Sciences 391 183% 197% 169% 340 62.9% 622 669 575Education 378 85% 100% 70% 536 83.0% 456 538 373Health/Biological Sciences 268 63% 76% 51% 674 62.9% 427 509 344Engineering/Physical Sciences and Math 132 53% 68% 39% 456 54.4% 243 309 176Business and Business Management 126 22% 31% 13% 1695 34.0% 369 522 217Social Sciences 44 6% 15% -2% 1541 44.6% 98 226 -30Liberal/Creative Arts 7 1% 8% -7% 2476 59.3% 12 143 -118Agriculture -38 -22% -15% -29% 229 74.7% -51 -35 -67

The Economic Case for investment in higher education

Public $ Returns on Investment in Higher Education in NH

Income and Multiplier Effects of BA in New HampshirePopulation 24 years and over

Female MaleBA $34,570 $63,191High School $22,238 $37,911Difference Annual Income $12,332 $25,280Difference Over Lifetime (35 years) $431,620 $884,800Difference Over Lifetime + Mutliplier Effect in Economy $863,240 $1,769,600Source: PUMS 5% Census 2000

Ave. Annual Income

Traditional Aged Students With Limited Access to Higher Education in NH Counties.. the data contrasts with aspirations of surveyed NH HS seniors.. 67% of females and 55% of males to 4-year college

NH High School to College

2002 (latest year)

County HS GraduatesHS Grads to

CollegePct going to 4-yr

College Additions if at state averageCoos 377 156 41% 48Belknap 566 250 44% 56Strafford 964 429 45% 92Merrimack 1,138 563 49% 52Sullivan 366 185 51% 13Cheshire 707 365 52% 17Grafton 929 496 53% 6Hillsborough 3,903 2,219 57% Rockingham 2,927 1,680 57% Carroll 408 239 59% NH TOTAL 12,285 6,582 54% 281

Economic Opportunity ..reduce the loss from low HS

matriculation to 4-year college in some counties

Each HS Graduating Class “shortcoming” in graduates going to college results in loss of $10 million dollars a year in the state

With multiplier effects in economy …each (20 year) generation loss from low matriculation to 4-year colleges is about $.5B or 1 percent of the state’s overall economy

Looking Forward…

“other” areas to focus efforts

Non-Traditional Students

165,000 adults report their highest level of education as some college 50,000 (or 30% in survey) indicated that they

expect to obtain a college degree in next five years

Female under-representation in tech-fields … a problem and an opportunity in NH

% Female FY-2000

Field NH MA ME CO CT 4-State Ave.Health Professions 93.5% 83.2% 86.0% 89.0% 80.7% 84.7%Education 72.8% 83.5% 72.2% 65.0% 65.5% 71.6%Biological Sciences 60.5% 61.7% 56.2% 61.0% 59.0% 59.5%Total --All Degrees 57.1% 56.5% 59.5% 53.7% 56.3% 56.5%Business Management 47.8% 47.7% 55.1% 46.9% 47.6% 49.3%Social Sciences 46.6% 52.9% 48.9% 54.3% 48.2% 51.1%Mathematics 39.7% 43.8% 50.9% 39.4% 47.4% 45.4%Physical Sciences 32.1% 46.6% 44.3% 39.5% 43.1% 43.4%Information Sciences 21.7% 24.4% 19.2% 25.6% 25.7% 23.7%Engineering & Related 19.4% 24.7% 11.1% 17.0% 16.5% 17.3%

Graduate Education matters…NH at “bottom” of “elite” states with high per capita income and high %

adults with graduate degrees Per Capita Income vs Percent of Population With Graduate Degree 2000 Median Lines Denote US

Avg ($29845 , 1.8%)

MA (37756, 9.3%)

NJ (38365, 7.3%)

NY (34897, 8.0%)

MD (34257, 8.6%)

CO (33370, 7.8%)

NH (33396, 7.1%)

CT (41489, 9.3%)VA (31087, 8.1%)

0%

2%

4%

6%

8%

10%

20000 25000 30000 35000 40000

Per Capita Income

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WSBE Freshman Profile: Exploring the “Brain Drain”

Introduction to Business Classes at UNH

2003-2004

Survey Respondents85 percent of all students in the course

Semester Survey RespondentsSpring 2003 94

Fall 2003 439

Spring 2004 102

Fall 2004 519

Total All Semesters

1154

Equal percentages have none, one and two parents who are college graduates

Number of Parents Who Graduated From College

34.5 32.432.8

0

5

10

15

20

25

30

35

40

Both One Neither

Forty percent were born in New Hampshire

Born in New Hampshire

41.3

57.9

0

10

20

30

40

50

60

Yes No

54 percent graduated from NH High School

(1 of 7 moved into the state during their childhood)

Graduated from New Hampshire High School

54.1

45.2

0

10

20

30

40

50

60

Yes No

3/4ths said they are likely to go on to graduate school

Likelihood of Going to Graduate School

32.3

21.6

6.4

39.1

0

5

10

15

20

25

30

35

40

45

Highly Likely Likely Somewhat Likely Not Likely

Only about 1/3rd said they are likely to work in NH after graduation.. Compared to just less than 50 percent of NH High School senior students surveyed

Likelihood of Working in New Hampshire After Graduation

30.8

68.4

0

10

20

30

40

50

60

70

Yes No

Work in NH after graduation and WSBE Option Preference: Accounting students most likely to stay in state (46%),

International Business students least likely (13%)

Work In NH By Intended WHSBE Option

23.7

30.9

40.0

69.1 70.0

52.9

65.6

87.5

60.0

30.0

12.5

46.4

33.3

75.2

0

10

20

30

40

50

60

70

80

90

100

Marketing Management Finance Accounting Ent Ventures Int Bus/Econ Info Sys

Work in NH Work Outside NH

Where do students plan to work after 10 ten years of employment? Most (1/3rd) expect to work in MA followed by NH (22%). Over ½ plan to work in New England, 1/10th in NY followed by California. Less than 4 percent expect to work abroad.

Most Likley State of Employment 10 Years After Graduation

31.8

21.9

17.1

11.5

7.0

3.9 3.62.9

0

5

10

15

20

25

30

35

MA NH US Other NY CA Foreign ME || VT FL || GA

Looking Forward..The future of the NH economy depends on investment and

attainment in educationThe state can no longer rely on in-migrants to support a high

tech, high income economySignificant “returns” can come with:

-- increasing matriculation rates of traditional students -- programs to improve access and delivery to non-

traditional students -- science, math and engineering and related degrees and

increasing female representation in these fields -- increasing graduate education -- retaining more students who go to school in state to work

in the economy