Economists generally define an economy as a series of interconnected markets. In each market, households, firms, and the government interact to facilitate an ex change of goods, services, and resources. Because markets are linked, a change in one market can have a fundamental impact on other markets and the economy as a whole. Investment in labor or capital in one sector of an economy stimulates demand in other sectors, leading to economic growth.
Perhaps this linkage is more apparent in higher education than in any other sector. Higher education increases human capital, supplying skills needed by industry and entrepreneurs, and thus is one of the key drivers of economic growth. Not surprisingly, a plethora of academic studies (in addition to scores of unpublished papers and professional reports) have attempted to estimate the economic impact of higher education on local economies. (1-3) Florax cites over 40 such studies conducted between 1960 and 1992 (4) while Giesecke and Maddens (5) cite more than a dozen studies conducted between 1992 and 2006. In the United States, multiplier estimates of every state dollar spent on universities on the local economy range from 8 for Bowling Green State University on the local economy to approximately 3.5 for Washington State University on the State economy. (6,7) In addition, the economic impact of higher education spending is disproportionately higher for small and medium-sized economies (ie, those with fewer than 200,000 nonfarm jobs) because there are fewer large industries available to drive local economic growth. (8)
While the economic impact on the local economy of some university departments and colleges, such as business schools, athletic departments, and health science centers, have been studied, (9-11) little research has been done on the economic impact of schools and colleges of pharmacy. Several factors unique to pharmacy education may explain why conducting an economic impact study is challenging. First, there are relatively few pharmacy programs accredited by the Accreditation Council for Pharmacy Education (ACPE) and these are dispersed throughout the country. As a result, programs often recruit students from surrounding geographic areas, and a significant percentage of those students remain and work in the regional economy after graduation. (12,13) Second, the relatively small number of pharmacy programs compared to medical and nursing programs results in a correspondingly lower number of new pharmacists being licensed each year, while the number of employment opportunities for these graduates is actually higher. (14-16) Third, the majority of (but not all) pharmacists work in outpatient, retail settings that are often geographically separate from other sources of health care. This makes the economic impact of these pharmacists on the regional economy distinct and more easily quantified compared to other types of practitioners. In addition, because of pharmacists' specialized areas of knowledge, their role cannot be filled by a less-knowledgeable healthcare worker, as might be possible in some other health care fields where skills and training of workers may overlap. For example, although pharmacy technicians are trained to count pills and label bottles, they can only perform their duties under the supervision of a licensed pharmacist who has a thorough understanding of drug interactions and disease states.
The sparse literature that exists on the local economic impact of community pharmacies and the academic programs training pharmacists for these programs strongly suggests high impact. Hodur and Leistritz found that community pharmacies add over 10,100 full-time equivalent jobs and a gross business volume of over $900 billion (in 2006 dollars) to the North Dakota economy. (13) Gourley, White-Means, and Wallace found that the economic impact of the University of Tennessee's College of Pharmacy (in 2004-2005 dollars) added over 600 jobs and $18 million to the state's economy. …