Abstract
Estimating the private rate of return to education has been a popular undertaking by economists, and a review of the literature reveals that return is somewhere on the order of 9% for the individual. However, efforts to provide accurate measures of the social rate of return to education have been fundamentally futile. Published results are candid in that they are certainly an underestimate because – while the costs to the individual and society can be quantified – the benefits to society, beyond the individual, aren’t included. This is because researchers are unable to monetize the positive externalities derived from education. The Social Progress Index (SPI), however, is a measure that allows us to quantify the advances enjoyed by society due to access to education, not with dollars, but with a comprehensive index. The SPI measures a nation’s social well-being based on 53 non-economic indicators in categories covering basic human needs, foundations of wellbeing, and opportunity. The SPI provides data for more than 160 countries for the past 7 years, making robust, panel data estimation of the social rate of return to education possible. This paper utilizes the SPI to estimate the social rate of return to education, which provides policy-makers, NGOs, and philanthropists with the information needed to make strategic resource-use decisions regarding optimal investments in education.
Presenters
Allison RobertsPeter and Sue Freytag Associate Professor of Economics, School of Business, Flagler College, Florida, United States
Details
Presentation Type
Paper Presentation in a Themed Session
Theme
KEYWORDS
Economics, Social Wellbeing, Investment, Living Standards
