New Study Reveals Berea College Makes $202 Million Impact on Local Economy


A newly-commissioned study reveals that Berea College’s operations make a yearly economic impact of more than $202 million in Madison County. The study quantifies the economic impact of Berea College on the local economy. It looks at the impact generated by all operations of the College.

Although the economic impact generated by the college goes throughout the Appalachian region, this analysis focuses on Madison County. The $202 million is a measure of the total dollar value that flows through the Berea-Madison County economy because of the operations of Berea College. The exact amount is $202,413,426 for the 2016-17 academic year.

“What surprised me was the absolute magnitude of the numbers,” Berea College President Lyle Roelofs said. “$202 million. That’s a lot of money. (And) 700 jobs at the College and three times as many more indirect jobs in Madison County. None of those jobs would exist if Berea College weren’t here.”

The study shows Berea College:

  • Supports a total of more than 700 jobs (Full Time Equivalent) by all related operations.
  • Paid $3.9 million in local taxes including direct occupational taxes paid by the College’s employees to the local and county governments in Madison County.
  • Impacts indirect property taxes created by Berea College’s economic activity that are paid to local governmental bodies including local public school districts as well as school utility taxes.
  • Makes an annual impact of $5.1 million and supports 68 direct and indirect jobs through Berea’s historic Boone Tavern Hotel. Spending by patrons of the Hotel produces about $128,000 in local taxes.
  • Generates more than $89.1 million in consumer spending.
  • Makes capital investments through construction and renovation of campus facilities. The annual impact of capital investments averages $35 million and supports 197 jobs.

“The positive impact Berea College makes in the community and county is quite significant,” Roelofs said. “Through the years, much of the city’s infrastructure and improvements were initiated by Berea College, including the fire department, hospital, electric and water utilities, along with land provided from the College to the city for local schools and parks. We are very fortunate to be in a community where education, including postsecondary education, is valued. Berea College is grateful for the mutual support between the College and the City of Berea. As each improves and grows stronger, everyone benefits.”

There is a direct correlation between the educational attainment of a community and the economic health and competitiveness of a community. Further, the economic impact of a typical Madison County, Kentucky college graduate over a 25-year period is $6.7 million, while the impact of a typical Kentucky high school graduate over the same period is $4.2 million.

Collectively, direct and indirect jobs earned nearly $115 million while spending about $90 million at local businesses, contributing to Madison County’s status as the 4th fastest growing county in Kentucky.

“As a result, the long-range economic impact of Berea College is a significant boost to the local economy even beyond the impact created by current operations and capital investment,” Roelofs said. “As this study demonstrates, residents in the City of Berea and Madison County derive substantial benefit from the College’s commitment to serving the Appalachian region through an improved quality of life, both economically and socially, for all Bereans.”

The study, conducted by Younger Associates of Tennessee, is based on a model of the local economy using data for annual average wage rates, tax rates, commuting patterns and tax collection ratios. Factors used in the study include U.S. Bureau of Economic Analysis economic multipliers as well as specific data from Berea College.

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Tags: Appalachia, Community, economic impact, Economy, madison county

Berea College, the first interracial and coeducational college in the South, focuses on learning, labor and service. The College admits only academically promising students with limited financial resources, primarily from Kentucky and Appalachia, although students come from 40 states and 70 countries. Every Berea student receives a Tuition Promise Scholarship, which means no Berea student pays for tuition. Berea is one of nine federally-recognized Work Colleges, so students work 10 hours or more weekly, earning money for books, housing and meals. The College’s motto, “God has made of one blood all peoples of the earth,” speaks to its inclusive Christian character.