Return Value on Higher Education Degrees

ENGL 1160
07, May 2021
Return value on higher education degrees
Often people examine the relationship between earnings and education to judge where there is a high return value of getting higher education degrees. Still, there is a need for broader analysis. Evaluating the return value of higher education degrees requires considering the costs and benefits and even comparing outcomes for those with no higher education. The differences in wages between the people with different educational attainment levels are among the reasons for investing in education. There is a relative scarcity of experienced postgraduate students in the graduate market. Since there are costs of investing in education, then the cost-benefit analysis of the investment in education is necessary education. Besides the efficiency considerations, there is also a focus on education attainment to bring equity in a society, where education helps alleviate poverty and reduce income inequality. There is a positive return value on higher education degrees.
From an economic perspective, the decision to enroll in a certain education institution and choosing a major is similar to an investment decision, where the highest economic benefit is preferred. Maximizing the benefits and reducing the costs are necessary to leverage the choices, but higher education is already expensive in the US. As such, those who enroll and attend colleges and universities are more likely to believe that the net benefit of attending is greater than the costs incurred, and the opportunity cost of not attending college. Hoverer, there are productivity spillovers of attaining education attainment as the wages of high school dropouts also rise (Blagg and Blom 12). Income upon graduation and future earnings are some of the factors considered when deciding on whether to attend college
The education system has been and continues to be associated with a better economic future, and those willing to attain higher education expect higher future earnings. Even as there are concerns that the system may be losing relevance, evidence suggests the higher education system has positive returns. However, it also depends on where the graduates work and their costs to get the education. McMahon, Walter, and Alan Wagner (275) estimated that there is a $90,000 benefit over a lifetime for those who have gone through the higher education system when considering the cost of education and benefits over time. Typically students who incur higher education costs tend to expect higher earnings, partly to compensate the costs incurred (McMahon, Walter and Alan Wagner 276). Access to higher education implies productivity improvements. This indicates the likelihood of better earnings in the labor market than if the individual had no higher education.
There is greater demand and preference for higher education as this is associated with haggler future earnings, and earnings reflect the return on investment. Borland et al. (16) reported that on average full-time employed graduates earned a 65 % wage premium more than non-graduates with no degrees over their lifetime when controlling for variables such as age and experience and others. The study results are consistent with other studies that show there is a positive retur...