30 Chapter 3: Methodology the difference between the wage earned by the Business program’s alumni and the alternative wage they would have earned had they not attended SUNY WCC. Using the regional incremental earnings, CHEs required, and distribution of CHEs at each level of study, we estimate the average value per CHE to equal $261. This value represents the regional average incremental increase in wages that alumni of the Business program received during the analysis year for every CHE they completed. Because workforce experience leads to increased productivity and higher wages, the value per CHE varies depending on the students’ workforce experience, with the highest value applied to the CHEs of students who had been employed the longest by FY 2021-22, and the lowest value per CHE applied to students who were just entering the workforce. More information on the theory and calculations behind the value per CHE appears in Appendix 7. In determining the amount of added labor income attributable to alumni, we multiply the CHEs of former students in each year of the historical time horizon by the corresponding average value per CHE for that year, and then sum the products together. This calculation yields approximately $43.7 million in undiscounted gross labor income from increased wages received by former students in FY 2021-22 (as shown in Table 3.1). The next two rows in Table 3.1 show two adjustments used to account for counterfactual outcomes. Counterfactual outcomes in economic analysis represent what would have happened if a given event had not occurred. The event in question is the education and training provided by SUNY WCC’s Business program and the subsequent influx of skilled labor into the regional economy. The first counterfactual scenario that we address is the adjustment for alternative education opportunities. In the counterfactual scenario where the program does not exist, we assume a portion of the program’s alumni would have received a comparable education elsewhere in the region or would have left the region and received a comparable education and then returned to the region. The incremental added labor income that accrues to those students cannot be counted towards the added labor income from the Business program’s alumni. The adjustment for alternative education opportunities amounts to a 15% reduction of the $43.7 million in added labor income. This means that 15% of the added labor income from SUNYWCC’s Business program alumni would have been generated in the region Table 3.1: Number of SUNY WCC Business program CHEs in workforce and the initial labor income created in Westchester County, FY 2021-22 Number of CHEs in workforce 167,033 Average value per CHE $261 Initial labor income, gross $43,658,492 Adjustments for counterfactual scenarios Percent reduction for alternative education opportunities 15% Percent reduction for adjustment for labor import effects 50% Initial labor income, net $18,554,859 Source: Lightcast impact model
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