Saturday, September 19, 2009

External returns to education

There is a common belief that there are many other benefits to education other than hte effect on ones earnings although the evidence, it seemed to me, was underwhelming. This paper takes a different view.

How large are returns to schooling? Hint: Money isn't everything. P.Oreopoulos & K.G. Salvanes
This paper explores the many avenues by which schooling affects lifetime well-being. Experiences and skills acquired in school reverberate throughout life, not just through higher earnings. Schooling also affects the degree one enjoys work and the likelihood of being unemployed. It leads individuals to make better decisions about health, marriage, and parenting. It also improves patience, making individuals more goal-oriented and less likely to engage in risky behavior. Schooling improves trust and social interaction, and may offer substantial consumption value to some students. We discuss various mechanisms to explain how these relationships may occur independent of wealth effects, and present evidence that non-pecuniary returns to schooling are at least as large as pecuniary ones.

No comments: