Benefits of investing in public education
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- 12.10.2020
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But does higher education only offer private returns? Or does society—the public—stand to gain something from an individual attaining more education? This question is at the heart of the constant battle over state budgets across the country. Educational allocations have been among the first on the chopping block in the name of fiscal conservatism. Even among the greatest skeptics, it is difficult to deny that localities and states benefit either directly or indirectly from the presence of higher education institutions.
The institutions hire workers and train prospective workers. Ideally, after enrollees accumulate skills and knowledge, they then contribute to the local labor market. While institutions vary in their ability to assess and fulfill the needs of the local market, research suggests that public institutions tend to be quicker to respond to changing local labor markets and student demands than private nonprofit institutions.
Communities with more educated citizens see positive returns, including lower use of public assistance, less crime and incarceration, and greater civic participation an excellent review of individual and social returns is available here. Research suggests that public investments in higher education are ultimately paid back by the increase in sales, property, and state income taxes—individuals reinvest their increased earnings—up to fourfold this research is actually based on Texas.
It ultimately improves the economic growth and health of the community as whole. Battles to cut state funds for education are often part of a short-term solution, with an eye on the current budget year. It achieves that goal for the state, for one year and is then often revisited again and again , but has long-term consequences for its citizens. Through financially divesting in public higher education, the costs of college are increasingly placed on the shoulders of the students.
While there are a number of reasons for the steep incline in college tuition over the past two decades, the divestment of public higher education is an undeniable contributor. They did not include private benefits such as higher earnings, nor did they consider the multiplier effects through the economy.
Even with those limitations, though, the study did a good job of looking at the direct effects of incremental educational spending. Starting with this method, I derived direct effects for Texas, updating as needed and otherwise adjusting to reflect the current situation. I also converted the analysis to reflect the effects per dollar of additional State investment in education over and above current levels.
I then calculated the full effects including spinoff and productivity gains using my US Multi-Regional Impact Assessment System, which I originally developed more than 30 years ago and have since used in hundreds of analyses for corporations, communities, and government agencies. The results speak for themselves. These are not additive with the items above, but rather different views of the overall effect. Even beyond these numbers is the value of civic participation and volunteerism, which increase with education, and the sheer pleasure of knowledge and discovery.
These numbers also don't capture the competitive advantage wrought by a superior workforce. What if on top of that, it improved lives, increased volunteerism, and otherwise paid major dividends to individuals and society? A "no brainer," right? Similar logic applies to strategic investments by the State in public education, and it's irrational and shortsighted to ignore the tremendous return on this particular investment of taxpayer dollars.
Future prosperity, both for individuals and for society, depends on education. There is more at stake than many people seem to realize.
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Even among the greatest skeptics, it is difficult to deny that localities and states benefit either directly or indirectly from the presence of higher education institutions. The institutions hire workers and train prospective workers. Ideally, after enrollees accumulate skills and knowledge, they then contribute to the local labor market. While institutions vary in their ability to assess and fulfill the needs of the local market, research suggests that public institutions tend to be quicker to respond to changing local labor markets and student demands than private nonprofit institutions.
Communities with more educated citizens see positive returns, including lower use of public assistance, less crime and incarceration, and greater civic participation an excellent review of individual and social returns is available here. Research suggests that public investments in higher education are ultimately paid back by the increase in sales, property, and state income taxes—individuals reinvest their increased earnings—up to fourfold this research is actually based on Texas.
It ultimately improves the economic growth and health of the community as whole. Battles to cut state funds for education are often part of a short-term solution, with an eye on the current budget year. It achieves that goal for the state, for one year and is then often revisited again and again , but has long-term consequences for its citizens. Through financially divesting in public higher education, the costs of college are increasingly placed on the shoulders of the students.
While there are a number of reasons for the steep incline in college tuition over the past two decades, the divestment of public higher education is an undeniable contributor. Starving the Beast , the award-winning documentary by Director Steve Mims , takes a closer look at the shifting landscape of public higher education.
Amid the political strategies to reduce government spending, public higher education is caught in the crosshairs. The film tracks the intended and unintended consequences of these political decisions for public research universities in the United States. This battle is still raging on at state capitals across the nation. Individuals who are more educated are healthier, more likely to get good jobs and pay higher taxes, less likely to participate in risky behaviours, and more civically and socially engaged.
But the investment produces a public benefit as well. An OECD report on the benefits of early childhood education found that the benefits to society include: higher voter rates; reduced costs to the health care system; savings in welfare costs; reduced costs to the criminal justice system; increased rates of volunteerism; and, because more educated populations are more socially engaged, increased feelings of safety and trust.
The economic benefits of education flow not just to individuals but also to governments through additional tax receipts when people enter the labour market. These public returns, which take into account the fact that providing education is also a cost to governments, offer an additional perspective on the overall returns to education.
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