We’re reminded countless times about how important our education is, backed up with data sets that tell us the “consequences” of skimping out on our formative years. But with the drastic increase in college tuition, criticisms of standardized tests, and seemingly contradictory advice from countless public influencers telling us that college is not worth out time, the waters have become muddied and have made it difficult to make informed decisions about our futures.
Perhaps education is best described as an investment, specifically in human capital. You are, after all, spending years of your life in school, even without advancing on to higher education, and assuming you attend college, the price of attendance can be its own beast. However, there are many sources that highlight the strong correlation between a higher education and income. Case in point,
“The higher income that results from a college degree is sometimes referred to as the ‘college wage premium.’ Research shows that this premium has grown over time. In addition, in general, the more skills people have, the more employable they are. As a result, workers with more education have a lower average unemployment rate than those with less education (Federal Reserve Bank of St. Louis).”
The Scandinavian Journal of Economics also wrote a paper concerning this question: How does education impact the economic growth of The United States? The paper explains that
“This increase in income is the key to understanding the link between investment in education and economic growth. People differ enormously in effectiveness on the job. Substituting more effective for less effective workers increases output per worker. More highly educated or better trained people are more productive than less educated or poorly trained people.”
The article concluded that,
“Our estimates of investment in education incorporate the impact of higher educational attainment on the value of nonmarket activities such as parenting or enjoyment of leisure, as well as the effect of increased education on earning power in the labor market. The time scale appropriate for measuring human capital formation is given by the lifespan of an educated individual.”
In other words, that means that the value of an investment in education are impactful over the full course of someone’s life. The benefits of a higher education also influence every aspect of one's life, not just their job or salary.
In addition to all of that, it’s not exactly a secret that Americans enjoy one of the highest living standards in the world. Of course, there are exceptions, but for the most part, Americans are enjoying more wealth than their foreign counterparts. According to the Foundation for Economic Education,
“A groundbreaking study has discovered that after accounting for all income, charity, and non-cash welfare benefits like subsidized housing and food stamps, the poorest 20 percent of Americans consume more goods and services than the national averages for all people in most affluent countries.”
And in the article’s unrelenting words, “if the US “[poorest]” were a nation, it would be one of the world’s richest (Foundation for Economic Education).”
That gives The U.S. the best of both worlds. A higher education is rewarded with a higher wage, on average; while, largely due to the success of the United States economy, there is a very large buffer between you and poverty. This makes pursuing higher education in The United States a very worthwhile investment because of the odds that your “investment” will pay for itself. However, you can also afford to take risks, invent, and explore new ideas, because you can be assured that failing is not a detrimental loss. Failing in The United States is a lot less dangerous than the same in Venezuela, Brazil, or one of the many developing African or Middle Eastern nations. You don’t want to end up broke in one of the Venezuelan favelas.
But what about the cost of college you might protest?
Well, there’s really no skirting around this one. Anyone that decides to pursue a college education will have to bite the bullet. There’s also no shortage of sources reminding us that a total of $1.53 trillion is owned in student debt, or that the average amount owed is $37,172 (NitroCollege.com). Not all is lost though.
“Amid the alarming statistics, there is some good news as well. Higher education is a cornerstone of the American dream and, despite the rising cost, more than two-thirds of American high school students choose to go to college (NitroCollege.com)”
A national poll conducted by Morning Consult also found “61% of adults said that, even based on their “current financial situation,” taking out student loans was worth attending college.”
Forbes also reported that “Generation-Z, which the poll identified as 18-21 years old, said loans were worth it by a margin of 79% to 19%. Even among Millennials, ages 22-37 and the generation with the most student debt, 56% said the loans were worth it.”
College may be an expensive investment, but many of the people that attend and graduate with a degree say that their investment was worth it in the end.
Obviously the pursuit of higher education can be a nuanced and complex topic and every case should be taken individually. College is most certainly not for everyone, and if your career of interest does not require a 4 year degree or greater, why bother with the extra hassle? However, if you’re on the fence, consider taking on the challenge. Many of the people who graduate don’t regret their decision, and correlation between a greater education and salary is extremely strong. An “investment” in education suggests that the outcome will outweigh the costs.
Works Cited
Agresti, James D. “The Poorest 20% of Americans Are Richer on Average Than Most European Nations: James D. Agresti.” FEE Freeman Article, Foundation for Economic Education, 30 Aug. 2019, fee.org/articles/the-poorest-20-of-americans-are-richer-than-most-nations-of-europe/.
B2B, Clodagh. “What's the Importance of Higher Education on the Economy?” Digital Marketing Institute, Digital Marketing Institute, 10 Dec. 2018, digitalmarketinginstitute.com/blog/what-is-the-importance-of-higher-education-on-the-economy.
Günel, Sinem. “The Power of Education and Why It Is More Important than Ever Before.” Medium, The Ascent, 19 Feb. 2019, medium.com/the-ascent/the-power-of-education-and-why-it-is-more-important-than-ever-before-c0653b03b005.
Newton, Derek. “Even Borrowers Agree, Student Debt Is Worth It.” Forbes, Forbes Magazine, 19 Apr. 2019, www.forbes.com/sites/dereknewton/2019/04/19/even-borrowers-agree-student-debt-is-worth-it/#184a895416aa.
Nitro College. “Average Student Loan Debt in the U.S. - 2019 Statistics.” Nitro, www.nitrocollege.com/research/average-student-loan-debt.
“The Schools Aren't Broken, They're Outdated.” Teachers College - Columbia University, www.tc.columbia.edu/articles/2000/september/the-schools-arent-broken-theyre-outdated/.
“Why Education Matters for Economic Development.” World Bank Blogs, blogs.worldbank.org/education/why-education-matters-economic-development.
Wolla, Scott A., and Jessica Sullivan. “Education, Income, and Wealth.” Economic Research - Federal Reserve Bank of St. Louis, research.stlouisfed.org/publications/page1-econ/2017/01/03/education-income-and-wealth/.
Jorgenson, Dale W., and Barbara M. Fraumeni. “Investment in Education and U.S. Economic Growth.” , vol. 94, 1992, pp. S51–S70. , www.jstor.org/stable/3440246.
Living in the American society, there is this stigma that every high school student is going to advance their knowledge in some form of postsecondary educational institution after their senior year. Although, it is a bigger battle and choice then some people or perceive it to be. As high school seniors, we are currently trying to decide where we are going to school, but what about the other factors of college that we need to invest towards. If you are going out of state, you may want to travel back to your home state to visit family and friends? Are you as a high school senior going to be the one who is going to be paying for college in the end? It may be a bit late for both the seniors and juniors to be able to invest in all of the aspects of attending any sort of college invitation. In the end, I agree that college is a hefty investment that needs to be thought about much earlier to receive enough money to pay for not only tuition, but also other factors including travel, food, tuition, etc.
ReplyDeleteThis is an interesting topic. Pretty relevant to what we should be thinking about right about now. We are constantly complaining and paining over the high cost of a higher education that most of of will soon have to face, what with standardized test fees, application fees, score/transcript delivery fees, tuition fees,room and board,the list goes on. However, I've never stopped and looked into why it's so expensive, or at least I'd have chalked it up to greedy, money-hungry institutions. Nonetheless, this post was pretty insightful and actually made me a little more confident in my choice to attend college. Taking into account our standards of living and what we expect of our salaries, it starts to make at least a little sense. Usually, even after attending college, just being smart and thorough with your money can be enough to prevent your life from leading to ruin. And there's a certain sense of security in that.
ReplyDeleteI definitely think this topic is relevant and interesting, but at the same time I'm not sure how to feel about it. I understand that going through college is a good idea and I want to do it, but there's so much debt that I'm gonna accumulate and I'm not sure if personally that'll be a good idea. While I might earn more money in the future, it doesn't stop me from having to pay off those student loans, and even experiencing a medical emergency could ruin those plans if everything doesn't go perfectly. I feel like this topic is a tricky one, because we are so young and the economy is definitely going to change as we grow into adults and have responsibilities like providing for our household. I don't like the idea of holding my debt with me forever, which is going to be the most likely outcome in my opinion. Personally I very much dislike the idea of everyone having student debt, as it seems like a punishment rather than a reward. College is supposed to be a good thing, a place where you learn more and become a more educated individual, not one where you sell your life away. In any case, going to college is a big decision to make for oneself and where you see yourself going in the future. You have to be prepared for anything.
ReplyDeleteHere i was thinking that everyone needs to go to college to get a good paying job the the career path that they want but it turns out every path is different for each person has their own path they took to get the job that they wanted, while some find out in the end that the career they were pursuing for the longest time wasn’t for them wasted and experience that could of taught you something
ReplyDeleteThere are multiple pieces related to the college part that I would like to touch on. First, the average amount of student debt you mention does not take into account the fact that some of the values are from a two year and some are from a four year. If you took just the data from a 4 year which is generally more expensive, your number would go up and at what point is it hindering the economy to continue pushing a four year secondary education. It is interesting to note that the tide is changing to push people into 2 year programs and so I think we need to hit an equilibrium where there is a balance and it will eventually make it affordable.
ReplyDeleteThis is a really great argument for people to go to college. Personally I have always known I would attend a school for higher education after high school due to the specific career I would like to pursue. However I would point out that not everything is as black and white as education being all beneficial. It was mentioned in the article the outrageous cost of going to a college or university that has grown outside of inflation. Which is a downside even though people may get paid more later. Pursuing a higher education is something everyone needs to figure out for themselves, whether or not it is a good path for them. While higher education does teach skills that people hiring look for, most of the skills employers are looking for can be learned individually by a person, through a cheaper online course or a community college course. Also there are some skills employers look for that cannot be taught through school or a course. These skills would include responsibility, empathy, team work, accountability, timeliness and honesty. These are skills that are developed by a person and their experience, values and motivations that may not come with simply being isolated within a safer environment such as a college or university. From my experience it is not just technical skills employers look for but these soft skills as well. Additionally, soft skills are pursued by every employer, no matter the job. Having these skills also allow for growth in a job and employers notice these skills of professionalism. While higher education has its benefits for a select group of individuals, other individuals may not need schooling but rather an internship in their job of choice or just job experience in general. While I agree that higher education is hugely beneficial for many people, I think that it is not the only route to success in life.
ReplyDeleteI appreciate that you bought up how college does not only provide one with a wage boost, but also with other skills that are useful in the workplace. It is a perspective that I had never thought of before. However I agree with Christal in that the price of higher education has grown greatly. Those who do not pursue a higher education after high school typically go straight into the workforce, where they can also learn some of those same skills. For some people higher education may not be the path that is most beneficial for them.
ReplyDeleteI love learning more about how our education affects the economy, especially as a senior about to head off into college. It’s a constant stressor thinking about the cost of college and how in the world we’re going to pay for it. With application fees, test fees, tuition fees, room & board, and so so much more, it’s insanely overwhelming. But I never really looked into why it has to be so costly or I just assumed it was just everything college-related being controlled by money hungry millionaires. Anyways, this post was really interesting to read and actually made me less less stressed about attending college now I know more about what goes into it.
ReplyDeleteYou had a new and interesting take on what some consider a tired and overused topic. That's hard to do. Your analysis had a significant amount of nuance in recognizing that it isn't just teachers and parents advising high school students about the next few years of their lives, but also the celebrities and CEO's that are vehemently against the "waste of money" that college is. That's something few people mention, but most students consider at least a little bit when they're trying to figure out college/trade school/whatever else the next few years could hold. There's always a little voice in the back of most students' minds saying "But Steve Jobs dropped out of school!!" Awesome job on that.
ReplyDeleteI feel like we are always told that education is key and that life is pointless without it, regardless of the cost. I have always thought of the price of college and higher education specifically to me, but never in such a broad spectrum of it impacting our entire economy. I agree with Rebecca in saying that your take is completely unique and helped provide me with a perspective I haven't thought of this issue from before. Every single person is different, and their future career paths are just as unique. This is a completely relevant topic and I appreciate this post!
ReplyDeletePersonally I always knew how education was important, but that it was worth the time and money. While reading your article I think you did a very good job explaining all of the economic standpoints that go behind it. Also I really liked how you compared the US to other countries because it gives a snapshot of where the US stands. I would have liked it if maybe you could’ve explained a little more about how not having education has a negative economic effect on those people specifically. Overall, I really liked your article and how you brought in something that everyone knows but introduced more economic standpoints.
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