Economic Impact of the University of Illinois System

A new study shows the University of Illinois System is a driving force behind Illinois’ economy - contributing $24.9 billion annually through research, healthcare, entrepreneurship, and the ripple effects of its students, alumni, and visitors. That economic activity supports 225,171 jobs statewide, meaning 1 in every 37 jobs in Illinois is tied to the U of I System.

The value doesn’t stop there. Students who invest in a U of I education see meaningful personal returns. Collectively, they are projected to earn an estimated $33.7 billion more over their careers thanks to their degrees. That translates to $4.80 in increased earnings for every $1 invested—an average annual return of 18.1%.

The analysis was conducted by labor market analytics firm Lightcast (formerly Emsi Burning Glass), using data from fiscal year 2023 (July 1, 2022 – June 30, 2023).

Operations spending

The U of I System adds economic value to Illinois as an employer of state residents and a large-scale buyer of goods and services. In FY23, payroll at the U of I System was $2.5 billion, much of which was spent in the state for groceries, mortgage and rent payments, dining out, and other household expenses. In addition, the universities spent $1.3 billion on expenses related to facilities, supplies, and professional services.
The U of I System’s operations spending added $3.0 billion in income to the state during the analysis year. This figure represents the universities’ payroll, the multiplier effects generated by the in-state spending of the universities and their employees, and a downward adjustment to account for funding that the universities received from state sources. The $3.0 billion in added income is equivalent to supporting 28,323 jobs in the state.

Research spending

Research activities at the U of I System impact the state economy by employing people and making purchases for equipment, supplies, and services. They also facilitate new knowledge creation in Illinois through inventions, patent applications, and licenses. In FY 2023, the U of I System spent $609.8 million on payroll to support research activities.
The U of I System’s research spending generated $1.2 billion in added income for the Illinois economy.

Hospital spending impact

The University of Illinois Hospital & Health Sciences System (UI Health) would not exist without the U of I System. The hospital provides a hands-on learning and research environment for students and employs thousands of workers.
In FY 2023, over $1.2 billion was spent on UI Health operations. These expenditures added a net impact of $1.6 billion in added income to the state.

Start-up and spin-off company impact

The U of I System creates an exceptional environment of discovery that fosters innovation and entrepreneurship, evidenced by the number of related start-up and spin-off companies created in the state.
In FY 2023, start-up and spin-off companies related to the U of I System generated $511.3 million in added income for the Illinois economy.

Impact of student spending

Around 33% of graduate and undergraduate students attending one of the U of I System universities originated from outside the state. Some of these students relocated to Illinois. In addition, some in-state students, referred to as retained students, would have left Illinois for other educational opportunities if not for the U of I System. These relocated and retained students spent money on groceries, transportation, rent, and other household expenses at state businesses.
The expenditures of relocated and retained students during the analysis year added approximately $387.2 million in income to the Illinois economy.

Visitor spending impact

U of I System brought new dollars to the economy through out-of-state visitor spending at commencement, sports events, and other activities hosted by the universities. While in the state, visitors spent money on lodging, food, transportation, and other personal expenses.
The off-campus expenditures of the universities’ out-of-state visitors generated a net impact of $125.3 million in added income for the state economy in FY 2023.

Alumni impact

Over the years, students have studied at the U of I System's universities and entered or re-entered the workforce with newly acquired knowledge and skills. Today, hundreds of thousands of these former students are employed in Illinois.
The impact of former students currently employed in the state workforce amounted to $18.0 billion in added income during the analysis year.

Return on investment

Student perspective

The U of I System’s FY 2023 students paid a total present value of $2.5 billion to cover the cost of tuition, fees, supplies, and interest on student loans. They also forwent $1.0 billion in money that they would have earned had they been working instead of learning.
In return for the monies invested in the universities, students will collectively receive a present value of $12.2 billion in increased earnings over their working lives. This translates to a return of $4.80 in higher future earnings for every $1 that students invest in their education. The average annual internal rate of return for students is 18.1%.

Taxpayer perspective

In FY 2023, taxpayers in Illinois provided $1.5 billion, equal to the amount of state and local government funding the U of I System received in FY23. The net present value of the added tax revenue stemming from the students’ higher lifetime earnings and the increased output of businesses amounts to $5.6 billion in benefits to taxpayers. Savings to the public sector add another $924.6 million in benefits associated with education from the U of I System.
Dividing benefits to taxpayers by the associated costs yields a 3.6 benefit-cost ratio, i.e., every dollar in costs returns $3.60 in benefits. The average annual return on investment for taxpayers is 13.3%.

Social perspective

Society as a whole in Illinois benefits from the presence of the U of I System through an increased economic base and by savings generated by the improved lifestyles of Illinois students, savings such as reduced crime, lower unemployment, and increased health and well-being. Together, the social benefits of the U of I System equal a present value of $51.0 billion.
For every dollar that society invested in the U of I System in FY 2023, society will receive a cumulative value of $7.00 in benefits, for as long as the FY 2023 student population at the U of I System remains employed in the state workforce.