IMPACT OF HIGHER EDUCATION ON THE ECONOMY Essay

Submitted By Bebop40
Words: 2969
Pages: 12
Open Document
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

Unemployment rate 2013

SOURCE: Bureau of Labor Statistics, Employment Projections, March 24, 2014

SUPPLY AND DEMAND
According to Burleson Consulting, the difference in wages between a high school graduate and a college graduate attaining a bachelor’s degree is almost one million dollars over their lifetime (Burleson Consulting, n.d.). What does this mean to the economy? Investment, whether the consumer is saving or spending, it is injecting money into the economy.
Human capital is a vital factor in economic growth. By increasing a person’s skill level through education, we increase the quality and quantity of goods and services that are outputted. A highly educated workforce is imperative to a stable or growing economy.
Currently, the number of workers seeking jobs is higher than the needs of employers.
The supply and demand for labor is not at equilibrium and we are not at full employment. According to Anthony Carnevale and Stephen Rose of Georgetown
University Center, “Postsecondary education is in high demand among employers, and as the recovery from the recent recession takes hold and hiring resumes, it will continue to be in high demand. The undersupply of postsecondary educated workers has led to two distinct problems: a problem of efficiency and a problem of equity. Without enough talent to meet demand, we are losing out on the productivity that more postsecondary educated workers contribute to our economy”.
The Keynesian theory implies that a company will typically produce what it expects to sell. Therefore its level of production is determined by its demand. The number of employees hired depends on the demand of the product. Currently the aggregate demand for products is low, creating a higher aggregate supply of workers (Wessels,
2012, pp. 102-229).
Typically, firms prefer to hire educated workers over uneducated, allowing them to investment in their human capital for long-term profitability, as well as keeping their marginal product of labor low. Skilled and knowledgeable
Show More

Related Documents: IMPACT OF HIGHER EDUCATION ON THE ECONOMY Essay

Unemployment In Canada

steadily approaching a transitory stage in it's economy that will likely translate to higher unemployment rates over the next few years. Unemployment refers to the state of not having work while actively looking for employment. The current rate of unemployment in Canada is currently sitting at 6.2 % per capita, which is almost a full percent lower than it was in October 2016. There are several contributing factors to unemployment such as education, technological growth, and the loss of talented…

Words 280 - Pages 2

The Black-White Test Score Gap Analysis

Race has also impacted America through the economy by the jobs, taxes/wages and the housing in communities. Another way race has impacted America is through the education system. The education system has been in America for decades and race has played a role in how education impact America. Standardize testing in America is considered bias due to the prejudice acts on certain races. In the article Civil Right, Discrimination, and Standardize Testing it states "African Americans, especially boys…

Words 696 - Pages 3

Undocumented Students and Higher Education Essay

Undocumented Students and Access To Higher Education in America Juan M. Galvan Liberty University Abstract This paper exposes the urgency to implement an immigration reform that would eliminate educational and occupational barriers to millions of undocumented students that want to pursue a postsecondary education. The information in this research examines the impact undocumented students may have in society and the economy of this country. There are thousands of undocumented students that…

Words 2192 - Pages 9

Tribal Leadership Summary

Indian Community. These two tribal leaders answered a variety of questions regarding AIS and the importance of indigenizing education to better prepare tribal citizens in society. The advancement of education is definitely headed in the right direction for these local tribes as they have been innovating new ways to assist their tribal members to reach higher levels of education. The San Carlos Tribe took the initiative to open their own tribal college which they utilize to send their members to state…

Words 490 - Pages 2

Economic Growth Around The World

Economy Growth around the World The table above shows Gross Domestic Product of top 20 countries in the world of today & estimation of 2050. As we can see US GDP today is twice as of China but in 2050, China’s GDP is expected to surpass America & become the largest economy in the world. Germany, the largest economy in Europe, ranks 4th globally today but in 2050, Germany is estimated to drop to 12th position. These data shows that the richest country in the world today may not stay richest…

Words 1562 - Pages 7

Deakin University Assignment Coversheet Tutorial Day, And Students

Deakin University Assignment Coversheet Faculty of Arts & Education Student ID: 211813715 Campus: Burwood Student Name: ..Nguyen..Manh Viet Address (for ....... return of assignment ......................................................................... via post) ON-Campus units return to: Campus Faculty Office OFF-Campus units return to: Assignment Tracking, DSA Deakin University Locked Bag 20000 Geelong, Vic, 3220 Assignment Title/Name: Research Essay Due…

Words 2905 - Pages 12

African American Economy Research Paper

African American Economy The African American economy has struggled since the beginning United States of America. African men and women were captured and brought to America, and forced to work for free. America grew and prospered from the free labor that the slaves were forced to perform. Slavery existed for countless decades, and for many years there was no African America economy. Once the slaves were freed, they were let go with no form of education or skills to enter into the workforce, many…

Words 1535 - Pages 7

Education In America

Kenzie Stanley 4* March 12, 2014 Education in America The Government’s role in education has been expanding, but has repeatedly failed to improve the outcome for the youth. This country is in need of a more sophisticated and better vision for education. Most are concerned by the rapid increasing costs of a college education and the impact this has on many students' ability to access higher education. The average college tuition has increased tremendously over the past decade. A wide va…

Words 401 - Pages 2

The Impact Of Access To Safe Drinking Water On GDP Growth Rates In Latin America

The Impact of Access to Safe Drinking Water on GDP Growth Rates in Latin America Jack Klukas Introduction This paper analyzes how GDP growth rates are affected by the accessibility of safe drinking water in Latin America and the Caribbean. The twenty countries that were selected were chosen as countries in the region with the strongest data available. A list of the countries along with several tables and datasheets are included in an appendix. Latin America is the area of focus…

Words 3217 - Pages 13

Creative Industries and Higher Education Essay

James Purnell MP, Minister for Creative Industries and Tourism and Chair of the Creative Industries Higher and Further Education Forum In 1998 and again in 2001, the Department published a Creative Industries Mapping Document which allowed for the first time the size, scope and impact of the sector to be fully appreciated. Since then, the significance of this dynamic sector to the growth of the UK economy and the importance of ensuring its sustained development have become increasingly recognised. One…

Words 3777 - Pages 16