Archives - Education: Page 28
Author: paul carson (Mon Dec 12, 2005 10:34 pm)
Title: education spending
This year close to a trillion dollars will be spent on education. The amount come close to 10% of the whole of the GNP. While this amount is reliable the results of such an investment are not.
A lot of what the nation is going to obtain from that money has little to do with money, as for instance, civic roles, social roles, learning social rules and norms and establishing friendly links among students.
Some of the results we want educational investment to yield most fall in the area of the economy; things such as knowledge, technical skills and more productivity in quantity and quality is what we are looking for.
There is not too much certainty about how much education contributes to the wealth of the nation. Although economist have tried for decades to quantify the impact of education in the overall economy they are still not sure of how much we get from it.
However researchers do know that those who acquire a higher education obtain better salaries than those who don’t. In general the more years of schooling the higher the salary, an additional 10% per school year.
Based on this evidence economist believe that education as an investment does pay.
Education makes people more capable an productive and also has a greater impact in the economically disadvantaged student, what contributes to a better integrated and healthy society.
There is less certainty however about the big picture. That is partly because educational benefits accrue to the economy gradually, often showing up years after schooling is complete. Another problem is the difficulty of quantifying indirect benefits. One unknown, for example, is the degree to which formal education brings about new commercial ideas and technological breakthroughs.
While there is little doubt that there are benefits, those measurement challenges have led to big shifts in the conclusions of economic studies over time. In the early 1990's, economists calculated big economic rewards from additional investment in education. A decade later, the conclusions were different: studies suggested that while one individual might gain advantage over another through greater education, there might be no overall economic benefit.
Today, economists suspect that the truth is somewhere in the middle. Jonathan Temple, an economist at the University of Bristol in England, says the research trend is moving back toward the earlier findings. The latest attempts to quantify the impact of education on total economic growth have tended to conclude that it is at least as significant as that measured for individuals.
Because indirect benefits can't be counted accurately, Professor Temple suspects an even bigger impact. Insofar as education enhances worker productivity, there is a clear benefit to the economy.
Two Harvard economists, Lawrence F. Katz and Claudia Goldin, studied the effect of increases in educational attainment in the United States labor force from 1915 to 1999. They estimated that those gains directly resulted in at least 23 percent of the overall growth in productivity, or around 10 percent of growth in gross domestic product.
The most important factor was the move to universal high school education from 1910 to 1940. It expanded the education of the work force far more rapidly than at any other time in the nation's history, creating economic benefits that extended well into the remainder of the century, according to Professors Katz and Goldin. That moved the United States ahead of other countries in education and laid the foundation for the expansion of higher education.
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.
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