Is Spending on Education Worth It?

From a recent article on Education from the New York Times, new studies suggest both the individual being educated is better off (the more disadvanaged reaping the biggest relative gains)AND each of us benefit as well.

This sounds like the kind of trend analysis that citizen's who vote on education budgets need to hear more about. But the article is really about the cost of education - is the benefit worth the investment?

Here are two snippets worth noting:

Economic View
What's the Return on Education?
By ANNA BERNASEK
Published: December 11, 2005

Start with what economists are confident about: the payoff to individuals. By measuring the relationship between the number of years of schooling and income earned in the job market, economists think that they have a good idea of what it's worth.

Alan B. Krueger, an economics professor at Princeton, says the evidence suggests that, up to a point, an additional year of schooling is likely to raise an individual's earnings about 10 percent.

For someone earning the national median household income of $42,000, an extra year of training could provide an additional $4,200 a year. Over the span of a career, that could easily add up to $30,000 or $40,000 of present value. If the year's education costs less than that, there is a net gain.

The payoff, of course, varies by individual. Another year of education will not have the same benefit for everyone. And school resources matter as well. According to studies by Professor Krueger and others, class size, teacher quality and school size can make a difference in the outcome. They have found that the effect of better schools is most pronounced for disadvantaged students.

And...

Today, more Americans attend college than ever before, but the rest of the world is catching up. The once-large educational gap between the United States and other countries is closing - making it increasingly important to understand what education is really worth to a nation.

If economists are right, it is not just part of the cost of maintaining a functioning democracy, but a source of wealth creation for all. That means that investing in the education of every American is in everyone's self-interest.

Still, we're a long way from being able to judge the right level of spending on education - and how to achieve it. With a college degree more important than ever, the cost of higher education is rising steeply, creating growing stress for many American families. With more study, researchers may be able to identify ways of reducing costs while increasing the payoff from education.

Taking our cue from Socrates, the first step may be to recognize what we don't know.