Mission

As the economy continues to go through peaks and valleys, many questions arise about the changing nature of higher education. Will mediums change, how will institutions change (or survive), and what type of learning environment will prepare students for the future? Under the topic of higher education and the recession, The Economist recently published an article with the title, "It still pays to study." The author cites the OECD's studies on the impact of learning on earning. According to the OECD: the more education, the better. After taking in to account tuition, years off for studying, and taxes, individuals still benefit in terms lifetime earnings. In terms of publicly funded education, taxpayers benefit from the subsidies based on this additional taxes paid over a lifetime of higher earnings. Given the financial crisis and the rapid rate at which universities are cutting budgets, the author speculated, "It may be worth rethinking the wisdom of ever-expanding higher education. But not this year."

The analysis represents a larger trend in higher education, where the benefits are measured by this rate of return analysis. The benefits to individuals and to taxpayers are reduced to one criteria: lifetime earnings. This narrow framework ignores the immense social benefits that are generated from research in many areas, but especially in medical sciences and engineering. Individual rates of return do not account for social health benefits, civic engagement, and other higher order benefts that result from higher education. Economists are often uncomfortable with the attempt to measure social rates of return because the reliability is not as strong as individual rates of return. In other words, there is no accepted model. As higher education continues to adapt during these economic conditions, it will be important to focus on these social rates of return. Not only does it show a greater value of the institution, it makes the institution more valuable to the degree that universities are committed to benefiting society in concrete, measurable ways. This can range from providing services in health and education to producing invaluable research to help solve problems that do not yet exist.

Labels: degree value, higher education, rate of return, recession, research, universities