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June 2008

In Your Own Back Yard

The National Institutes of Health (NIH) is America’s leading medical research agency and the foremost biomedical research institute in the world. The research funded by NIH has led to many dramatic improvements in our nation’s health.

Most Americans don’t know that NIH is a positive economic force in numerous local communities: The majority of its $29 billion budget—between 80 and 90 percent—funds research that takes place at universities, medical research centers, hospitals, and research institutes in every state in the U.S.

The federal dollars that NIH sends out into communities, known as “extramural funding,” provide real, direct economic benefits at the local level, including increased employment; growth opportunities for universities, medical centers, and local companies; and additional economic stimulus for the community. And when NIH funding is cut, communities across the country suffer too.

To determine the overall impact of NIH funding on each state’s economy, Families USA calculated the new economic activity generated by NIH spending in three areas: 

  1. Business activity (the increased output of goods and services)
  2. Employment (jobs created and supported)
  3. Earnings (the additional earnings associated with the new jobs)