A Review of the literature on the economics benefits of education: 2-year and 4-year<br />BUSN 502<br />Drexel University<br />
Abstract June 3, 2010<br /><ul><li>Few can argue against the importance of a college education.
Despite ever increasing costs, enrollments are at an all-time high.
~11.5 million students [39% of 18-24 YO] are enrolled in 2- or 4-year.
While the benefits are plentiful, it is unclear just how much education is needed to improve the economic well being of the adult population.</li></li></ul><li>Premise<br />…an educated person not only realizes individual returns, but also contributes to the greater good of society…<br /><ul><li>Increased demand
Education increases human capital</li></li></ul><li>Kane and rouse (1995; 1997)<br />
Key Points Findings<br /><ul><li>For every year of credits completed (30 completed credits over two semesters), the average 2- and 4-year college student earns ~5% more than similar high school graduates.
Those who attended a 2-year earned ~10% more than those w/o any college.
Payoff of “some college” was 7.6 nationally (8% in Ca.)
National Longitudinal Study of the High School Class of 1972
Used transcript data and National Longitudinal Survey of Youth
Prior research relied on Bureau of Census data (years of school completed but not differentiated by 2- and 4-year)</li></li></ul><li>Jaeger and Page (1996)<br />
Key Points Findings<br /><ul><li>1991 and 1992 Current Population Survey
Matched 1991 data on years of education with 1992 data on degree completion</li></ul>Similar years of school completed, but no degrees:<br />White men with Associate degrees earn 8-19% more<br />White women with Associate degrees earn 24-31% more<br />Conclude that sheepskin effects do matter in the returns to eduction.<br />
Key Point<br />The payoff to “some college” applies to both continuing high school graduates and experienced adult workers who return to school after acquiring considerable labor market experience.<br />
Economic outcomes were higher for those with degrees.</li></li></ul><li>
Research over the past two decades has brought to the light the importance of education beyond high school. In particular, evidence has grown to substantiate the economic returns for workers with higher education levels. This review suggests that community colleges are associated with higher wages, even for those not completing degrees. While no assertions have been made with regard to the causation of higher levels of earnings, the evidence is compelling on the powerful impact of education on individuals and on society. In sum, education does pay.<br />
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