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The Issue of Economic Return on Education Essay


Nowadays, education is believed to play a significant role in one’s employment opportunities. However, a college education is often very costly (OpenStax College, 2016). This paper studies the issue of economic return on education; also, the education’s role as a social equalizer is discussed, the ways to measure its outcomes are debated, and the need for special treatment (e.g., financial aid) to certain groups of students is considered.

Scholars on Economic Return of Education

A college education may grant access to a more prestigious, well-paid job. Meng, Shen, & Xue (2013) confirm this, stating that in China, education has become more valued over time (although education is not the only factor affecting the wages, as there are also numerous “unobserved skills” that were not directly measured in that study). However, OpenStax College (2016) points out numerous issues connected to education; e.g., it is stressed that in 2010, only estimated 27% of college graduates had a job related to their major, and that those graduating from college very often begin their career in debt (pp. 357-358).

Additionally, individuals who drop out of college do not gain the benefits of their investments fully. Generally, the economic return on education varies much depending upon the specialization of learners; for instance, engineers, IT specialists, and economists gain among the highest wages, whereas those studying languages and fine arts get much lower salaries; nevertheless, an additional year of education still significantly increases annual earnings (Webber, 2014), which often adds up over an extended period to outweigh the cost of education.

Education as a Social Equalizer

As has been noted, higher education is associated with increased yearly earnings. This gives it a great potential to become a social equalizer that allows poor, but talented and willing to study individuals to gain financial stability. However, there are several problems. For instance, to be such an equalizer, education should be free for the economically disadvantaged; otherwise, if all students have to pay for tuition, the role of education as a social equalizer is diminished, because the poor often are unable to pay tuition fees or even get a loan (Goldrick-Rab, 2016).

In this case, it may even serve as an “anti-equalizer,” because the well-off can pay for education, get a good job, and preserve their status, whereas the poor cannot pay tuition fees and later cannot compete with well-educated individuals from higher classes in the market. Even if poorer people do get a loan, they are still more likely to e.g. drop off or get expelled due to other reasons (e.g., they may have to combine studying and working, which leaves them less time to study; constant stress further exacerbates these problems) (Goldrick-Rab, 2016).

Measuring the Outcomes of Education

Measuring the outcomes of education utilizing standardized tests alone is difficult. Although these tests supposedly provide an objective evaluation, the experience of the author of this paper shows that often they do not. While having only excellent grades often does reflect good knowledge and skills, doing poorly on such tests does not always indicate a low level of skills and knowledge, and some of those with low grades (which, in some cases, maybe due to e.g. poor attendance alone) can easily “outsmart” those who have fairly high marks.

Using subjective assessments such as teachers’ reports and records of participating in extra-curricular activities may have its benefits, allowing for creating a more comprehensive image of the learner. Nevertheless, it would probably not permit for compensating the inadequacy of standardized assessments, because such evaluations may be too subjective; e.g., some instructors may be unwilling to give a good assessment for a student who missed many classes and gained a low grade because of this. Also, subjective measures may depend on the socio-economic background of the learner; e.g., those needing to work rarely have time to participate in many extracurricular activities (Goldrick-Rab, 2016; OpenStax College, 2017).

Thus, it would probably be better not to involve subjective evaluation; however, making results of standardized assessments the only criterion e.g. choosing an employee, or creating the minimum grade requirements for a job, is also inadequate. It would probably be best to individually assess how well one fits a specific position.

Special Treatment in Admissions Decisions

For education to work as a social equalizer, it is paramount that colleges provide cover the tuition fees for individuals who cannot afford to pay them, but show a sufficient amount of knowledge, willingness, and determination to gain an education. It is also important to provide them with a stipend that would allow them to devote their time and effort to studying instead of working to be able to live. This should be done regardless of the ethnic background of the applicants/learners because everyone should be given an equal chance to gain an education, improve their lives, and do the work they want to do.

On the contrary, special treatment should not be given based on the ethnic background of applicants alone. For example, an individual of color from an affluent family should not have their tuition fees covered simply because they are of color. Even though some ethnic groups are generally much more disadvantaged in socioeconomic respect than others, the problem of racial inequality would probably already be solved if tuition fees were covered and stipends were provided for people with low socioeconomic level.

Conclusion

Generally, education does provide a significant increase in annual earnings. It may work as a social equalizer if talented individuals from low-income families can receive it for free. Standardized measures may be the best available way to assess students’ performance, but their results should not be viewed as ultimate. Finally, individuals who cannot pay for education should gain financial aid to obtain equal chances to improve their lives.

References

Goldrick-Rab, S. (2016). Paying the price: College costs, financial aid, and the betrayal of the American dream. Chicago, IL: University of Chicago Press.

Meng, X., Shen, K., & Xue, S. (2013). Economic reform, education expansion, and earnings inequality for urban males in China, 1988-2009. Journal of Comparative Economics, 41(1), 227-244.

OpenStax College. (2016). Introduction to sociology 2e. Houston TX: OpenStax College.

Webber, D. (2014). Is the return to education the same for everybody? Retrieved from https://wol.iza.org/articles/is-the-return-to-education-the-same-for-everybody/long

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IvyPanda. (2020, September 8). The Issue of Economic Return on Education. Retrieved from https://ivypanda.com/essays/the-issue-of-economic-return-on-education/

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IvyPanda. "The Issue of Economic Return on Education." September 8, 2020. https://ivypanda.com/essays/the-issue-of-economic-return-on-education/.

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IvyPanda. 2020. "The Issue of Economic Return on Education." September 8, 2020. https://ivypanda.com/essays/the-issue-of-economic-return-on-education/.

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IvyPanda. (2020) 'The Issue of Economic Return on Education'. 8 September.

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