PeakTrader.com

[administrator]

Cooper Center Study Shows Major Economic Impact of Higher Education
October 1, 2009

"Every dollar spent by the Commonwealth of Virginia on higher education produces more than $13 in job-creating economic activity, says a new study conducted by the Weldon Cooper Center for Public Service at the University of Virginia.

Each higher education dollar also results in $1.39 in increased tax revenues that flow back to the state's coffers."

******

New Study Links Education to Economic Growth
Jan 26, 2010

"If all 30 industrialized OECD countries raise their average PISA scores by 25 points in the next 20 years, there would be a total gain of $115 trillion in GDP over the lifetime of the generation born in 2010.

This impact wouldn't be felt until today's young students become significant members of the workforce, but by 2042 GDP would be 3% higher than it would have been without improvements in human capital. That gain would rise to 5.5% in 2050 and 24.3% by 2090.

For the U.S., that would mean a growth of almost $41 trillion in GDP over the next 80 years - and that's their conservative goal."

******

Mark J. Perry said...

Sure, both college education and homeownership provide individuals, households and society with great benefits. But the danger is when the government decides that the market is not providing "enough" college graduates or homeownership, and they introduce taxpayer-funded schemes, subsidies, policies to stimulate and increase college graduates and homeownership.

Consider now that many college graduates can't find jobs, and manufacturing companies can't find enough skilled workers for advanced manufacturing positions. Instead of going for a four-year college degree, many high school students would be much better off going for a 2-year program, or a certificate program, and acquire skills that are marketable, and without so much student loan debt.

Main point is that college and homeownership have been greatly OVERSOLD to the American people, using taxpayer dollars, which have led to unsustainable bubbles in both markets.

******

PeakTrader said...

It's a bubble only if it bursts.

The 30-year higher education expansion and the 30-year Information Revolution expansion seem to be a self-reinforcing cycle, through education and income.

Fewer higher education opportunities may have resulted in a slower expansion of the Information Revolution.

The U.S. spent more on higher education, but it also leads the rest of the world combined in the Information Revolution.

Human capital has a powerful effect on an economy. Afterall, economies are made up of people.

******

PeakTrader said...

AtlantaDude, college should be hard, not easy, regardless of the field of study. That's likely why online classes are inferior.

-------

http://www.blogger.com/comment.g?blogID=28997633&postID=8526178320955896193

--------

PeakTrader said...

Education seems to be an excellent investment. BLS chart:

http://www.bls.gov/emp/ep_chart_001.htm

******

Ken, in general, people who have "brains and ambition" are more likely to go to college.

And there's nothing wrong with one person being excellent in computer science and another person being excellent in history.

--------

http://www.blogger.com/comment.g?blogID=28997633&postID=2183601629010280130

--------

PeakTrader said...

The tuition "bubble" coincides with the acceleration of the Information Revolution, after 1982.

I suspect, more higher education will be needed when the Biotech Revolution accelerates.

The U.S. attracts many of the best and brightest in the world.

The World's Top Universities 2011
Forbes

The 2011 World University Rankings are dominated by U.S. schools. They hold 75 spots among the top 200...Seven U.S. schools are in the top 10.

The American system is robustly funded, with 2.7% of gross domestic product going to tertiary education...more than twice the average.

******

Many countries are positively interconnected with the U.S..

When the U.S. had the stock market bubble, from 1995-00, so did many other countries.

If the U.S. had a stronger economic recovery, other economies would be stronger too.

Soros warns of stock market bubble in US and Europe
22 January 1999

"Mr Soros argued that a speculative bubble was developing in Western financial markets.

The flood of funds from the emerging markets to the developed economies had led to high stock market valuations in the US and Europe, according to Mr Soros. "I see the development of an asset bubble as the next major threat to the system", he said."

******

More foreign students studying in USA
11/14/2011

"The number of international students at U.S. colleges and universities rose 4.7% to 723,277 during the 2010-11 academic year.

Enrollments have been on the upswing since 2006-07 and grew 32% over the past decade, IIE data show.

International students contribute more than $21 billion to the U.S. economy through tuition and living expenses."

******

$21 billion / 723,000 international students = Over $29,000 a year for tuition and living expenses.

---------

http://www.blogger.com/comment.g?blogID=28997633&postID=3909991827966906182

--------

PeakTrader said...

Morganovich says: "levered real estate is a terrible way to save and invest. over 30 years almost everyone loses money on their house."

So, you believe, people should save $200,000 for a house first, while living in a cheap apartment for 30 years, and then when they saved the $200,000, the house rose from $200,000 to $500,000?

******

The same can be said about education.

Would you rather borrow $100,000 to get a good education by the time you're 25, or save $100,000 to get the good education by the time you're 45 (although, it may cost $200,000 by then).

******

One of the problems in the housing market, besides high unemployment or massive idle resources (including in homebuilding), is not enough lending.

-------

http://www.blogger.com/comment.g?blogID=28997633&postID=4217857180754608886

-------

PeakTrader said...

Is it really the quality of education has gone down or the education standards went up?

When I was in grad econ, it was a very tough program and many students failed, some failed miserably.

Most of the professors had Ph.Ds from excellent schools and we went through some new methods, much of it that didn't exist in the past, e.g. in cointegration.

I think, undergrad and grad school have become increasingly harder than high school, which generally teach the basics (although, there are many poor high schools).

--------