Return Investment on High Education Degree: A Literature Review

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Return Investment on High Education Degree: A Literature Review
The Melbourne Institute Report by Borland and colleagues in 2000 states that graduates or recipients of high education degrees have an advantage over non-graduates in the higher wage packages gained upon employment. "Full-time employed graduates receive a substantial wage premium over non-graduates, on average of the order of 65 per cent," (Borland, pg. 9). Hence, it is evident that one of the values gained from acquiring higher education degree is the higher wage packages by an individual once employed. In essence, a graduate employee reflects a more competent human resource towards increasing and enhancing the productivity of the organization or rather the employer. The value for enrolling or applying for a higher education program or the return on investing in the costly endeavor is measurable and manifests in various forms with equally diverse rates of return. Tuition fees, for instance, make for one of the substantial investments made by individuals as they venture into higher education which necessitates comparing the rate of return on the cost incurred or investment to the rate of interest or value gained to determine whether or not it was a worthy investment (Borland, pg. 11). The return on investment on high education degree at the individual level takes the form of monetary advantage over the non-graduates and manifests in the form of personal development through enhanced eligibility for personal development opportunities in the diverse areas of occupation. The return on investment at the societal level, on the other hand, seeks to compare the overall value added to societies by the impartation of advanced knowledge and skills through higher education programs to the public financial investment made on the same. A comparison of the government's expenditure on higher education to the impact of the beneficiaries or graduates on society functions to determine the value or the return on investment on the former. The rate of return on investment on higher education at the personal level tends to be higher than the social rate of return as it is the individual who stands to win more gains compared to their societies (Borland, pg. 12). The private rate of return in Australia in the 1980s, for instance, ranged from 10% to 15%, which was 5% lower than the social rate of return on investment in higher education degrees (Borland, pg. 1). The social rate closes the private return gap through the returns to investment in university research, where higher education plays a significant role in industrial research and development (R & D). Advanced knowledge and skills gained through high education degrees correlate to advanced research and development across different sectors of the economy and thus positively impacting society. Thus, the social rate of return to investment in university research is greater than the individual rate of return gained. The Melbourne Institute Report further highlights the fact that the rate of returns to quality in higher education is also on the rise, which reiterates the wider social rate of return on investment.
Higher education plays a significant role in the achievement of sustainable grow...