NIH Cuts Mean Job Losses in College Towns

"Of the 20 labor markets that saw the biggest increases in NIH funding between 2004 and 2023, many were well-known college towns, including Tallahassee, Fla.; Athens, Ga.; and State College, Pa. And according to the report's calculations, the local economies that saw a substantial increase in NIH funding during that period also had lower rates of employment decline than those with small increases, no increases or no NIH funding."

"When we see an increase in employment, some of that may be coming directly from the NIH-funded activities, like hiring research assistants and lab workers," said Robin McKnight, an economics professor at Wellesley College and co-author of the report. "But those employees are also going to go to restaurants, the institution needs more services, and a lot of what's generated through the NIH's basic scientific research eventually makes its way to pharmaceutical research. And pharmaceutical firms may find it beneficial to"

In 2024 the NIH allocated $26 billion of its $47 billion budget to research grants for more than 500 higher education institutions and affiliated research centers. About 80 percent of NIH funding goes to cities where universities with large medical facilities represent a significant share of the local economy. Many college towns experienced the largest NIH funding increases between 2004 and 2023, including Tallahassee, Athens, and State College. Local economies with substantial NIH funding growth showed smaller employment declines than areas with little or no NIH funding. Employment gains arise from direct research hires and indirect local spending. Proposed deep NIH budget cuts threaten thousands of jobs in these college towns and could be detrimental to local labor markets.

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