It is college acceptance season, and letters with financial aid offers attached are dropping on doormats nationwide. Many students and an even greater number of parents are facing the sticker shock associated with tertiary education. As college prices rise—the average annual cost hit $18,497 in 2010-11, according to the National Center for Education Statistics—the question inevitably arises: Is it worth it? For the average student in the U.S. and worldwide, the answer is affirmative: Education remains a fantastic investment for individuals. The tougher question is whether education at all levels is such a great investment for societies as a whole.
In the U.S., education leads to higher wages. Median weekly earnings in 2013 were $472 for someone with less than a high school diploma, according to the Bureau of Labor Statistics. That number rises to $1,108 for those with a bachelor’s degree and $1,714 for those with a professional degree such as an MBA or J.D. A recent National Bureau of Economic Research paper suggested that the educational payoff for “marginal” college students—the ones who might not attend if it weren’t for government support, for example—may be a lot lower. Still, for most students, the high cost of college is well worth it.
That’s true worldwide as well. Recent estimates (PDF) for Ghana, for example, suggest that each additional year a child stays in school translates into an average annual income 7 percent higher. In China, that figure is 12 percent.