In the world of finance a few people get lucky and hit it big in a short period of time, but investment counselors agree that most people make safe gains by staying with their plan over the long haul.
So it is with education and schools. It is a solid investment that is proven directly tied to economic development. It can't be considered a short term investment, nor a temporary one, although there are near immediate benefits. But it is a good and wise investment in not only the future of your children, but also wise for anyone with an interest in the social and economic enhancement of a community.
This is simple research-based information. One good example is from the book, "Smart Money: Education and Economic Development," by William Schweke (published by the Economic Policy Institute).
The book summarizes that education at all levels is an investment worthwhile. Writing about primary and secondary education he notes:
Research shows that a high-quality education increases the earnings of individuals and the economic health of their communities. Some believe, however, that increased public investment will not necessarily improve the quality of education offered. But recent studies show that education spending can have a direct, positive impact on the business climate and can improve the success of at-risk students, whose contributions to the economy are critical for achieving a high-value/high-wage economy in the 21st century. Such spending will have a greater chance of success if coupled with specific reforms, such as smaller class sizes, greater access to technology for at-risk students, support for teacher training and innovation, and improved accountability structures.
Schweke also attributes human and social costs to a lack of investment in education, citing areas that lack educational resources and drawing correlations to increases in crime rates, drug use, gangs and basic family stability.
Education has a direct impact on specific values in the work place, indicating a more immediate return on investment with the educational dollar. One of the most immediately visible returns is the proven increase in productivity when education is a priority within a community.
The Congressional Joint Economic Committee Study published in 2000 and titled Investment in Education: Private and Public Returns reaches one of its first conclusions in relating the impact of an investment in education on the labor force:
The most direct way that education affects the labor market experience of workers is by increasing their productivity, thus increasing their earnings. The more education individuals acquire, the better they are able to absorb new information, acquire new skills, and familiarize themselves with new technologies. By increasing their human capital, workers enhance the productivity of their labor and of the other capital they use at work. If higher levels of productivity reflect higher levels of human capital, which are in turn primarily a result of increased education, then a positive relationship should exist between educational attainment and earnings.
The report also states that education not only has a direct result on income, but also improves the quality of employment.
As it turns out, attributing numbers to the correlation between good and higher education and economic growth has become easy to realize. Other research confirmed this finding. Edward Denison undertook one of the most comprehensive studies on the effect of education on economic growth. Denison estimated that education per worker was the source of 16 percent of output growth in nonresidential business.
In another study done for the Rand Corporation, 21 percent of the growth in output from 1940-1980 was the result of an increase in average schooling levels. Estimates of the effect of human capital on economic growth in the United States mostly range from 10 to 25 percent, although some recent evidence disputes this finding. But the specific number is definitely a positive and continuing trend.
The joint congressional study points out:
By improving the productivity of American workers, education increases the wealth of the United States. To illustrate the magnitude of the effect of increased educational levels on economic growth in the United States, consider the effect on gross domestic product (GDP) if educational levels had stopped rising in 1959. In real terms (chained 1992 dollars), GDP rose from $2,210.2 billion in 1959 to $7,269.8 billion in 1997. If one were to assume that increased education levels contribute 16 percent to economic growth, and that this education improvement did not occur, the result would be that in real terms 1997 GDP would be lower by approximately $1,260 billion dollars, standing at just over $6,009 billion in 1997.
But it turns out that the intangibles that follow as a return on investment in education have been known since before we were a nation. Traditional concern about the educational opportunities of the poor, as it has evolved in the American context, has resulted in the public provision of education. The public provision of education predates our independence beginning in 1647 with the passage of the Massachusetts Bay Colony's first schooling legislation. A tradition of state guidance, but local financing and control has characterized American public education for the majority of the past two centuries.
When not tapping out a blog article, I'm often doing internal marketing consulting for a portion of a large company. An ongoing struggle is convincing powers at all levels that investing in quality in process, productivity, parts, production and service is worthwhile. I'm not sure if I can take credit for the term, but people have gotten used to me saying, "Quality doesn't cost, it pays." This appears to hold true with education. It is a good deal and a worthwhile investment - it doesn't cost, it pays.
Sometimes the public loses sight of the nature of education, and is blinded to the fact that the best route away from poverty, the best route to a better standard of living, the best way to prevent crime, the best way to ensure commerce and peace - locally and globally - is to make an earnest investment in education.
"If you think education is expensive, try ignorance." -- a line often attributed to Mark Twain puts the matter together in a concise nutshell.
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Best to all,
Lloyd
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Lloyd Schultz
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