Investing in human capital
- Almost universally, economists agree that it is a good individual decision to invest time and money into education.
- Society also benefits from education—better health outcomes for the population; lower levels of crime; a cleaner environment; and a more stable, democratic government are positive externalities of investment in education.
- Private rates of return go primarily to an individual; for example, earning interest on a savings account.
- Social rates of return go primarily to society; for example, providing free education.
Why invest in human capital?
Private benefits of education
|Less than a high school degree||High school degree, no college||Bachelor’s degree|
|Median weekly earnings, full-time workers over the age of 25||$488||$668||$1,101|