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Economic Development, General Information

Big Money: LSU’s Economic Impact Estimated at $1.3 Billion, Generates Approximately 22,000 Jobs

Study underscores LSU’s importance to the Baton Rouge area – and Louisiana

02/28/2011 11:39 AM

BATON ROUGE – It’s no secret that LSU, Louisiana’s Flagship University, has a reputation as strong and rich as its traditions. But did you know it’s also one of the primary economic drivers of the capital city region? A new study by Stephen Barnes, assistant professor of economics and associate director of the LSU Division of Economic Development at the E. J. Ourso College of Business, demonstrates that LSU has an undeniable impact on the Baton Rouge area’s economy, generating more than $1.3 billion annually, as well as creating almost 22,000 jobs during economically tough times when unemployment has reached record highs.


“Our study shows in indisputable terms that LSU is truly integral to the Baton Rouge Area and its success,” said Barnes. “Between both academics and athletics, the university is a key driver for the economy of the capital region.”


A follow up to the 2009 report, the study, titled “The Economic Impact of Louisiana State University on the Baton Rouge Metropolitan Statistical Area,” looks at factors such as jobs created, sales generated, residents drawn to the area and research dollars attracted because of the presence of the state’s flagship university and details LSU’s role as a major economic driver for the city.


“This study shows that LSU’s positive economic impact continues to increase with every passing year,” said LSU Chancellor Michael Martin. “Despite the current state funding crisis we are facing, LSU continues to generate jobs and bring in money that helps to keep the Baton Rouge area and all of Louisiana moving forward. This university is vital to the economic health of our state.”


The primary analysis includes a thorough study of student spending and university budgetary expenditures, and considers how these two large spending components would be allocated across industries.


“Our results show how the spending by students and the university impacts each major industry category. We have calculated total output/sales impact, total wages impact and total earnings impact for each industry,” said Barnes. “LSU’s impact in these areas is quite impressive.”


Some of the study’s most pertinent findings include:

  • LSU’s presence produced $1.3 billion in direct and indirect sales in the 2010 fiscal year, which is comparable to 3 percent of gross domestic product for the metro area.
  • More than $738 million in salaries and wages were generated last year, comparable to 5 percent of total wages in the Baton Rouge Metropolitan Statistical Area, or MSA, in 2007. LSU’s payroll directly accounts for 2 percent of the area’s wages and salaries.
  • LSU generated an estimated 21,940 jobs. Approximately 8,717 full-time equivalent jobs were located on campus; 13,223 were in other parts of the MSA. Together, employment attributable to LSU accounts for nearly 6 percent of total non-agricultural employment in the MSA.
  • Students from outside the MSA brought $435 million into the local economy ($298 million after tuition and fees) during the 2010 fiscal year. Including students from inside the MSA, student spending increases to $602 million ($420 million after tuition and fees).


In fiscal year 2010, LSU professors and researchers attracted more than $80 million in federal research grants for the MSA.
In addition to these traditional impacts, the university also adds additional values and opportunities to the MSA. LSU adds to economic development through small business incubation and commercialization efforts. For example, the Louisiana Business and Technology Center, or LBTC, focuses on supporting and creating small businesses in fields critical to the state’s economic future. LBTC has helped to secure nearly $130 million in equity, grants and loans; built more than 500 new businesses; and created or saved nearly 10,000 jobs. LSU’s Office of Intellectual Property, Commercialization and Development helps to take cutting edge research conducted at LSU and transform it into commercially-viable products available for consumer purchase.


LSU also works to develop a quality workforce and better quality of life for Louisiana through $16 million dollars in outreach and service to the state’s K-12 schools. With more than 50 such programs – from providing college-level math and science instruction in Central Louisiana high schools to launching an early reading initiative in New Orleans pre-schools – LSU is preparing Louisiana’s children for tomorrow’s economy, where more than 50 percent of jobs will require an education beyond high school by 2018.


“Combined with all the work we do to support our regional economy, this study provides further evidence for our case that LSU is a smart investment with a great return – the kind the wisest of investors would put more money into, not less,” Martin said. “We remain confident that we can work with our state’s leadership through the upcoming legislative session to ensure LSU’s vital contribution to the economic future of this state continues.”


For a copy of the study or to schedule an interview with Stephen Barnes, contact Ashley Berthelot at 225-578-3870 or For more information on LSU’s impact on the Baton Rouge Area and Louisiana as a whole, visit


The Economic Impact of Louisiana State University on the Baton Rouge MSA (.pdf)

LSU Research Communications