Impact of Higher Education on the Economy

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IMPACT OF HIGHER EDUCATION ON THE ECONOMY ECON645-0340602 JULY 13, 2014 INTRODUCTION Does higher education matter to our economy? Is taking on the enormous debt to pay for a degree worth the gamble? Recent studies provided by Pew Research suggest that not only is a college degree the best investment towards future earnings, it promotes economic well-being and career attainment (Pew Research, 2014). Quantified benefits of a higher education include   Private economic benefits: higher salaries and benefits, lower unemployment, higher savings, better working conditions, and personal/professional flexibility. Public economic benefits: decreased reliance on public assistance, increased tax revenue, greater productivity, increased consumption, and increased competitive advantage (through human capital). Private social benefits: better health, increase in quality of life for children, better consumer decision making, and personal status. Public social benefits: reduced crime rate, increased volunteerism, social cohesion, increased voting participation, and increased ability to adapt, change and learn (Institute for Higher Education Policy, 2013).   COSTS VS. WAGES Although the unemployment rate is still quite high (7.5 in July of 2014 down from 8.3 in December of 2013), economically our young can’t afford not to attend college (Bureau of Labor Statistics, 2014). The study performed by Pew Research, tells us that a college degree increases the real dollar average income of college graduates compared to those that have not attended college. The chart below (Figure A) gives a visual of the projected employment and wages of those with a degree compared to those without. Figure A Employment and Wage Projection $1,800.00 $1,600.00 $1,400.00 $1,200.00 $1,000.00 $800.00 $600.00 $400.00 $200.00 $12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% median weekly earnings
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