The Return to Increased Public Expenditures on Education
Abstract
The investments needed to meet anticipated demands and expand access to higher education will be expensive. Quite reasonably, taxpayers and their representatives have been asking why they should contribute more to the support of educational institutions. Shouldn't those who directly benefit from improving educational attainment pay their own way? And if they choose not to invest in their own education, isn't that their problem? Until good answers can be provided to such questions, it will be difficult to convince federal, state, and local policymakers that they should make the investments in high schools and colleges necessary to improve access to higher education. The research summarized here provides strong arguments for why Americans should invest more in education. We compare the public cost of providing increased education to the benefits that taxpayers will directly realize from such increases. These benefits include both reductions in the costs of government, and therefore in the costs taxpayers incur, and increase in government revenues. Specifically, we estimate the extent to which increased education will result in: reductions in public expenditures on public assistance and social insurance programs, reductions in public expenditures on incarceration-the costs of building and operating prisons and jails, and increases in federal, state, and local taxes and in contributions to social insurance programs. Our findings indicate that investing in increased educational attainment at any level-say, providing two more years of high school to those who would have dropped out after tenth grade, or providing two years of college to those with only a high school diploma-leads to remarkable public savings over time. If, for example, the nation were committed to providing all Americans with the average level of education now achieved by non-Hispanic whites, the investment would provide a return to taxpayer's two-and-one-half times the original cost.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jun 01, 2000
- Accession Number
- ADA381785
Entities
People
- C. P. Rydell
- Georges Vernez
- Richard Krop
- Stephen Carroll
Organizations
- RAND Corporation