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11/08/2021

Comments

Sarah Beaube

This paper seems to confirm pretty much every conversation we have had about education in this class. The returns to education are countless. Because of how much this paper confirmed my beliefs, I tried to also look at it from a critical lens (which was frankly pretty hard to do). For example, when the paper brings up that girls' education should be given preference over boys, I pushed back and thought "well don't boys deserve it just as much as girls do?" Of course, the paper explains that girls' should be given preference because the rates of return on education for them are higher than that of boys. This is because so many fewer of them are educated that much progress can be made.

One part of the paper that I hope to dig a little deeper into and talk about in class more is the difference between the full discounting method and the Mincerian method. I need a better understanding of them both in order to appreciate these studies more.

Matt DiTondo

In recent weeks we've discussed the concept of diminishing returns to investments in human capital. Particularly, we've looked at how (for the growth path of developed nations like South Korea) investments in technology (R&D) becomes the primary mover of the production function. While we've discussed this on an individual nation scale, the aggregation of ROI from human capital investments allows us to look at a global Solow model. This is shown in Figure 1 with a slightly negative slope. However, any conclusions drawn from this figure are pretty dubious, as its r^2 is only .003. This continues for figure 2 as well. But then in table 1 we see a result we'd more expect, with the global mean years of education increasing along with the mean ROI. This would suggest that the global community is still at a point of increasing returns to human capital investments and that this should be a primary point of focus

Max Thomas

Reading this study, it appears that across the board, investments in education yield high returns, both publicly and privately. As mentioned in the discussion section, the average return on investments in education is over four times greater than the average returns on stocks and bonds. Additionally, the paper noted that, in countries with fewer girls enrolled in schools than boys, investments in female education yielded greater returns than those in male education. While this seems very logical for developing countries with high levels of inequality, I wonder whether the same premise would apply to developed countries like the United States. Currently, women make up a large majority of students enrolled in American universities. Following the study’s logic at face value, in the United States, it may be more efficient to invest in male college education than female, given their gap in enrollment. However, given historical inequality between genders, I would assume such a policy would only exacerbate existing gender wage gaps, among other issues.

One thing I’m curious about, is whether any studies have been conducted on the return on investment in research and land grant universities, independent of the education they provide. While this study focused on the returns to education, I’m curious about the returns on investments in research and development at institutions of higher learning. Given the high rate of return on post-secondary education, I would think that, by investing in institutions that both educate and innovate, returns could be greater than those at a non-research university.

Mary Wilson Grist

A major assumption in all discussions about return rates of education is that more education leads to more productivity. However, I thought it was interesting that the authors point out that this isn't always the case. In fact, sometimes more education is just a signal that a worker is likely to be more productive. This made me think about current job discrimination. Even though a person who has had 7 semesters of college really won't be all that less productive or knowledgeable than a colleague who graduated after 8 semesters of college, there is a massive difference in hiring rates for college graduates vs. college dropouts. I think a large part of this has to do with signaling. To many employers, a college degree is a signal to others that you are productive and will add something to the team.

Yuhan Liu

Throughout the semester, we talked a lot about the benefit of education both privately and publicly. We showed that governments should subsidize education for the socially efficient quantity of education with models, and it is no surprise that investment in education is beneficial for development. This World Bank report brings this discussion to another, and more practical, level as it both quantified and qualified high impactful the return to education is. The paper states that the global private return to one extra year of schooling is about 9%, and social return to schooling above the primary level is also high at above 10%. Although knowing that investment in education is worthwhile, I was still shocked by how high the return is. The 2-points difference based on gender is larger than the difference between high- and low-income countries where people received dramatically different quality and quantities of education, which also reaffirmed the importance of investing in women’s agency. One thing that I am interested in reading more about is the factors accounted for in the calculation of social returns because there are so many positive externalities at play, and I am curious as to how accurate this calculation can be made.

Gavron Campbell

I love how this paper started with a clear thesis of how investments in education has clearly shown to increase social returns through decades of empirical evidence. It’s still hard for me to grapple with the existing debate of investments in human capital. I also found it important how the author points out different flaws in the evidence, but still turns it around to show the positive aspects of it. For example, the author points out that the returns to primary education can decline over time, yet this still shouldn’t inhibit countries from investing in it. Soon after, the paper discusses how the “returns are highest for primary education, the general curricula, and the education of women, and countries with the lowest per capita income.” I’m interested to research more about the disparity between men and women’s education, which is something I didn’t know before this paper.

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