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10/21/2020

Comments

carrie morrison

I found the world bank paper to be very applicable to our conversations in class. It gave quantitative evidence to the returns to education. For example, in class we were talking about how education is an important aspect to development due to the returns for the economy. The paper shows that the returns to education across the world has an average of 8.8%, proving the benefits in investing in education. One aspect I find interesting was how the rate of return increases as the level of income for a country decreases. Due to the already low investments, any slight increase provides large returns. This reminded me of our discussion about investments in women and how due to their lack of presence in the workforce, investing in women's education and healthcare leads to a high rate of return. As mentioned in class and previous articles, the correlation between investing in human capital and the high returns to the country is very clear. It's surprising that, in the United States, even with all this evidence and research there is still lack of investments and arguments for low levels of investment in human capital. Moreover, there is a lack of investments in youth who are in lower income brackets. The article mentions the "race between technology and education" and how it reflects the bias of technological progress and income inequality and how education plays a role in leveling it. However, the lack of investments in public education on all levels is slowing the increase of the high skill labor supply, despite the increase in demand. I wonder how increasing the investments in education and making education more accessible would overall impact the country as a whole? Moreover, what the rate of return on education looks like across differing incomes and how accessibility to quality education affects that?

Danny Lynch

I think the idea of comparing the rate of return on education to alternative investments could be an extremely useful tool for policymakers (even if there isn’t a fully accepted consensus on what the social rate of return is, it’s undoubtedly high). This makes me wonder, though, why aren’t policymakers doing this? As noted when we discussed land grant institutions, the government is severely underinvesting in education in the US. I think one explanation could be that many estimates of social return exclude non-monetary benefits, making the cost-benefit ratio look larger than it really is. Another part of the paper that I found interesting was the screening hypothesis. For the most part, I disagree with the hypothesis because I feel as though college has taught me how to think. However, if I were to quit school a week before graduation, the amount of foregone knowledge would be minimal, but the lack of a degree would put me in a much worse place in terms of the labor market than if I had just finished my last week. Because of this, I think the fact that studies have found some limited support for the screening hypothesis makes intuitive sense.

Andrew Frailer

The coolest thing to me about papers like this is that it should lead to very straightforward policy. Investing in education is a good investment for everybody. We talk a lot in class about why this is so difficult to do in America, but it just makes me so frustrated. The paper says that the developing countries see the largest returns to investing in education, but the United States could do so much better if we only had more informed decision making. The main thing I wanted to talk about was actually a concept discussed in professor Goldsmith's class. We talked about the American gender gap and how boys from lower SES families in America actually enter school at a much worse state than their sisters on average. Most of the research describes how cognitive, but also environmental aspects make this the case. It shows me how complex some of these issues can be. To me, overall, men are definitely in an advantaged position in society compared to women, so it makes sense both in a cost benefit and moral way why we should focus on women. I was mainly wondering if there was any way that we could reconcile these two things. If boys from low SES families (at least in the US) are starting better off, I wonder if this offsets some of the relative advantage of investing in women. Meaning that there seems to be substantial gains to be made in this realm as well. Thank you for allowing me to submit late.

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