University of Hawaii is a $1.4 Billion Player in Hawaii's Economy

Economic impact report illustrates UH contribution to Hawaii's economy

University of Hawaiʻi
Posted: Sep 23, 2004

The University of Hawaiʻi generated more than $1.4 billion in expenditures within the state of Hawaiʻi in fiscal year 2003, according to an economic impact report prepared by the University of Hawaiʻi Economic Research Organization (UHERO) released today.

"The University of Hawaiʻi is a billion and a half dollar enterprise and a key player in Hawaiʻi‘s economy," said UH Acting President David McClain. "We produce education and research services, entertainment and sports services. Our customers include students, visitors, private businesses, and the general public. As we provide these services, we transform the lives of our students, and in the process transform Hawaiʻi‘s economy and society, and the world‘s as well. The University of Hawaiʻi provides its supporters a good return on investment."

This $1.403 billion of education-related expenditures attributable to the UH system generated $1.973 billion in local business sales, $1.243 billion in employee earnings, $132 million in state tax revenues, and 35,800 jobs in Hawaiʻi in fiscal year 2003. This represents approximately 4.6 percent of total jobs, 3.2 percent of worker earnings, and 3.8 percent of total state tax revenues in Hawaiʻi‘s economy.

In 2003, UH represented about 3.1 percent of Hawaiʻi‘s economy, or gross state product, of nearly $46 billion. By comparison, agriculture‘s contribution to Hawaiʻi‘s gross state product was 1.2 percent; the communications industry, 2.6 percent; hotels, 5.6 percent; legal services, 1.2 percent; wholesale trade, 3.7 percent; retail trade, 11.2 percent; and construction, 4.3 percent.

"The University of Hawaiʻi is a major economic sector in Hawaiʻi," said James Mak, UH Mānoa economics professor and one of the principal investigators of the study. "Despite daunting fiscal challenges, our study finds that the University of Hawaiʻi‘s contribution to the state‘s economy is as strong as ever."

In fiscal year 2003, the University of Hawaiʻi system spent $989 million in support of its educational mission. Of that amount, $454 million was state general fund expenditures, and $535 million was generated through government research and training grants, revolving funds (e.g., bookstore revenues), special funds (e.g., tuition and fees), and federal matching grants. Other spending on UH-related activities brings the total to $1.403 billion.

These related activities include spending by students (on items other than tuition, fees, dorm fee, and books), money spent by the privately-funded University of Hawaiʻi Foundation and the Research Corporation of the University of Hawaiʻi, out-of-state visitor spending while attending UH sporting events and UH sponsored conferences and professional meetings, and university employee retiree benefits.

Thus, the leverage effects of state general fund higher education spending on the local economy are significant. For every dollar of general funds appropriated by the state, the UH system generates another $2.09 of education-related expenditures in the economy. Every dollar of general fund spending by UH generates $4.35 of total business sales and $2.74 of labor earnings.

Also, for every $1 million of state general funds invested in UH, 79 jobs are generated, while every dollar of general fund spending by the university generates $0.29 in state taxes.

The report, "The Contribution of the University of Hawaiʻi to Hawaiʻi‘s Economy in 2003," was prepared by UHERO. The study was funded by the University of Hawaiʻi‘s Office of Planning and Policy and the UH Foundation, and is an update of the 2000 "Study of the Economic Impact of the University of Hawaiʻi System." For more information or a copy of the economic impact report, visit

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