Walter McMahon, professor emeritus of Economics at the University of Illinois at Urbana-Champaign, will address "Higher Education Financing for Growth or Development? Criteria and Returns in the U.S." at this Higher Education Collaborative Brown Bag.
The outcomes of higher education are not just jobs and earnings. There are private benefits beyond earnings as well as specific social benefits that are largely ignored by financing policies. Symptoms of the latter such as vocationalization of curricula, underfunding of the humanities and education, cuts in state support, and the privatization of research are widely discussed. A major source of these is that the final outcomes beyond earnings have not previously been systematically documented, valued, or related to individual life chances and to the optimal rate of development of nations.
This discussion will address these issues. Current earnings-based estimates of the returns to 2- and 4-year degrees relevant only to jobs and earnings growth are considered first. Then estimates of the values of outcomes beyond earnings (based on what it would cost to produce each outcome by other means) are added to obtain true social rates of return relevant to optimal development. Results indicate that if broader development is chosen as the goal, rather than only economic growth, then unit costs are the same but the return to higher education is over twice as large as previously realized.
This event is sponsored by the Higher Education Collaborative Seminar Series and supported by the Timpone Family Endowment Fund.