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Costs and Benefits of Higher Education in KentuckyBy Amy L. Watts
From Education and the Common Good
pp. 33-34, published 2001
Though our ability to measure benefits associated with higher education is limited by our capability of identifying all the associated outcomes and valuing them, the evidence presented here nonetheless suggests significant returns to society as a whole. Closing the gap between Kentucky’s adult population with a higher education and the nation’s requires substantial investments but the results here indicate large rewards. Even this very limited analysis implies that the future returns exceed higher education expenditures. A variety of outcomes related to education are responsible for returns of this magnitude. As education increases, associated behavioral changes lead to benefits accruing to not just the individual through higher employment status and wages, but also to society as it enjoys the far-reaching effects of these changes.
Indeed, we have learned from past work that persons with a degree from a four-year institution or higher are more likely to be civic-minded and to choose healthier lifestyles. Here, we have attempted to gauge the value of these considerable outcomes, as well as others. As we have shown, college-educated individuals are also less likely to be a burden to the criminal justice system or to depend upon public welfare programs. To the extent that frequently reading to young children affects future academic performance, children of more educated parents will be better prepared upon entering school, as the likelihood of being read to every day will be greater. We also know that postsecondary education is associated with an increased likelihood that the individual will engage in entrepreneurial activity and be better prepared for the workplace of the future, whether or not they start a business. Tax revenues and, in turn, the capacity of the public sector to serve the interest of the public good, are enhanced by the higher earnings that are generally commensurate with more schooling.
While our analysis examines and discusses the benefits resulting from increasing educational attainment from the high school diploma to at least a baccalaureate degree, one should not necessarily infer that it is better or more cost effective to invest in postsecondary education than, for example, early childhood development, primary and secondary education, or vocational and technical training.
Finally, it is also important to note that this report is not intended to indicate that spending for higher education is always justified by its returns. On the contrary, all public spending arguably should be held to a higher standard in our state because it lacks the resources to finance unwise, unproductive investments. Moreover, our per capita investment in postsecondary education is relatively high. Thus, expectations of these investments in postsecondary education are justifiably high.
If Kentucky continues to pursue policies that encourage participation in postsecondary education at the baccalaureate level or beyond, clearly it will reap the benefits of improved lives for all Kentuckians. While overall societal costs will have to rise to meet the growing demand for quality education at unprecedented levels, the expected lifetime returns should continue to outpace initial investments over the long run.
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