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. Ironically, one explanation why some early school leavers miss out on these high returns is that they lack the very same decision making skills that more schooling would help improve.Economics, you're supposed to be on my side!
Saturday, October 17, 2009
Non-Economics of College
I once suggested to my wife that we simply promise our children $10,000 a year for the first four years after they get out of high school. They can choose to spend that money on a local public college, subsidize private/out-of-state college or, if they would like, buy whatever they want. The goal is to give them more personal responsibility and to force them to think about the cost (which are increasing) and benefits (which some say are decreasing) of going to college. My wife hates that idea. She, like me, loved her time at Clemson University for the non-economic benefits and she wants to pass that experience on to our children. Lucky for her, it seems recent economic research agrees: