By: Perrryman Group. Published in February 2009.
The Perryman Group (TPG), a Texas-based research and analysis firm, compiled this report to analyze the economic benefits legal aid provided the state of Texas. At the time of the study, Texas was ranked 43rd in the country in per capita spending on legal aid. To assess the impact of legal aid on the economy, TPG examined the size and scope of services provided then considered demographic patterns.
TPG used survey data, industry information, and a variety of corroborative source materials to create a matrix describing the various goods and services required to produce one unit (a dollar’s worth) of output for a given sector. TPG made final estimates based on typical consumption patterns of low-income individuals.
TPG concluded that for each dollar spent on indigent legal aid services, the local economy saw a $7.42 rise in total spending, a $3.56 increase in output (gross product) and a $2.20 increase in personal spending. Assessing the level of legal aid spending at the time, TPG estimated that legal aid services were providing over $457.6 million in total spending, $219.7 million in output, and 3,171 permanent jobs. Legal aid services also generated an estimated $30.5 million in revenue for the state and local government, well above the government’s annual $4.8 million contribution to legal aid services.
TPG went on to assess the potential impact of expanding legal aid services in two scenarios. They found that: If Texas raises funding to be equivalent to the state’s share of the low-income population within the United States, the added yearly benefits under this scenario total $325.9 million in expenditures, $156.5 million in gross state product, $96.7 million in personal income, and 2,259 permanent jobs; OR If Texas raises funding to meet a portion of overall need equivalent to that occurring in the nation as a whole, the incremental benefits increase to an annual stimulus of $816.6 million in aggregate expenditures, $392.1 million in output, $242.2 million in earnings, and 5,659 jobs. TPG concluded that legal aid inherently has societal value, but it is also a prudent use of state resources from a pragmatic, economic perspective.