Defining the Public and Private Value of Going to College

The Institute for Higher Education Policy is a non-profit, non-partisan organization whose mission is tofoster access to and quality in postsecondary education. The Institute�s activities are designed to pro-mote innovative solutions to the important and complex issues facing higher education. These activitiesinclude research and policy analysis, policy formation, program evaluation, strategic planning and imple-mentation, and seminars and colloquia.

For further information, please contact:THE INSTITUTE for Higher Education Policy1320 19th Street, NW, Suite 400 Washington, DC 20036Phone: 202-861-8223/ Facsimile: 202-861-9307/ Internet: www.ihep.com

Reaping the Benefits

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This is the first in a series of reports and papersthat will be published under the aegis of The Insti-tute for Higher Education Policy�s New Millen-nium Project on Higher Education Costs, Pricing,and Productivity. Sponsored by The Institute forHigher Education Policy, The Ford Foundation, andThe Education Resources Institute (TERI), theproject is a multi-year effort to improve under-standing and facilitate reform of the complex sys-tem for financing higher education.

The New Millennium Project is premised on thebelief that higher education is in the midst of itsgreatest transformation since the end of World WarII. Changes brought about by a variety of forces--advances in technology as a teaching and learningtool, declining public financial support coupled withescalating tuition levels, increasing faculty retire-ments, rapidly expanding student loan borrowing,competition from new postsecondary educationproviders, and growing �non-traditional� studentpopulations--represent the cusp of a new era inhigher education. Unless new approaches to highereducation finance and administration are devisedthat allow costs to be managed, student access tobe protected, and quality to be maintained, thecapacity for America�s colleges to meet the nation�ssocial and economic needs in the future will bejeopardized.

Numerous recent studies have concluded thathigher education must fundamentally restructureitself to meet the postsecondary education needsof individuals and society. Yet the specific tools toaccomplish these objectives, while at the sametime preserving the most successful and produc-tive aspects of the academy, have not been devel-oped. In the past, colleges and universities changedby adding new programs and functions, rather thanby reallocating resources and transforming corecapacities. In the near future, however, this �mis-sion creep� will not be enough. Presidents, trust-ees, faculty, student leaders, and statewide highereducation officials will need to develop new tools

for managing transformation that protect the ba-sic social and economic mission of collegiate highereducation while simultaneously adapting to majorchange.

This first report, Reaping the Benefits: Definingthe Public and Private Value of Going to College, isintended to help frame the succeeding project re-search and analysis. As a prelude to subsequentproject analysis about who pays for college, it pro-vides a broad overview of the range of public andprivate benefits that accrue from college educa-tion. The goal of the report is to categorize orcatalogue these benefits, providing a more accu-rate and inclusive picture than is commonly un-derstood. This may help to broaden public un-derstanding of the value of higher education, andthereby lead to more rational, and longer-term,consideration of governmental and societal invest-ment in collegiate learning.

It is important to note that this analysis focuses onthe benefits of going to college. Colleges and uni-versities provide a wealth of benefits by perform-ing research, public service, and other functions.These benefits range from economic developmentto advances in science and agriculture to culturalprogress. However, since the primary function ofcolleges and universities is the education of stu-dents, this report is mainly concerned with thebenefits that can be defined as a result of the teachingand learning processes.

The New Millennium Project�s subsequent workwill include several dimensions. The project willexamine trends over the last several decades inhigher education financing and management. In-tegral to this analysis will be an update and expan-sion of the groundbreaking work of the CarnegieCommission on Higher Education in the early1970s examining who pays for, and who benefitsfrom, higher education. Topics such as the chang-ing roles of tuition and direct institutional support,how subsidies differ by level and type of educa-

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tion, how patterns of student financial aid haveshifted, the impact of state accountability initia-tives, and the effects of these changes on accessand quality in higher education will be addressed.The project also will examine how these baselinetrends have impacted the ways in which institu-tions of higher education measure and managecosts and quality. This will include analyses of howcolleges and universities set prices and address pro-ductivity as components of overall institutionalquality.

The later stages of the project will include rec-ommendations in a range of areas, such as: theoptimum balance of different sources of revenueto support higher education; the roles of tuitionand fees as components of overall higher educa-tion revenues; the best ways to convey distinc-tions between cost and price; and strategies forreinvestment in core faculty while also taking ad-vantage of opportunities for curriculum reform andenhanced learning opportunities through informa-tion technology. The project also may explorethe possibility of targeted pilot testing of projectrecommendations by individual institutions or con-sortia.

In addition to this substantial research, the NewMillennium Project will convene a wide array ofexperts and stakeholders with an interest in thefuture of higher education. These seminars andmeetings are designed to bring together the lead-ing edge of new thinkers from education, indus-try, and government.

The New Millennium Project is co-directed byJamie Merisotis, President, and Jane Wellman, Se-nior Associate, at The Institute for Higher Educa-tion Policy. Project staff include: Colleen O�Brien,Managing Director; Diane Gilleland, Senior Asso-ciate; Thomas Parker, Senior Vice President at TERI;Katheryn Volle and Alisa Cunningham, ResearchAnalysts; and Christina Redmond, AdministrativeAssociate.

The project also is being guided by an AdvisoryGroup of national experts in higher education. Ad-visory Group members include:

� Vera King Farris, President, Richard StocktonState College;

� Augustine Gallego, President, San Diego Com-munity College District;

� D. Bruce Johnstone, Professor of Higher Edu-cation, SUNY Buffalo;

� Gerald Monette, President, Turtle MountainCommunity College;

� Barry Munitz, President and CEO, The J. PaulGetty Trust, Chair;

� Michael A. Olivas, William B. Bates Professorof Law, University of Houston; and

� Carol Stoel, Co-Director, Teacher Education,Council for Basic Education.


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INTRODUCTIONINTRODUCTIONINTRODUCTIONINTRODUCTIONINTRODUCTION

What are the benefits of going to college? This isone of the most important questions that has beenposed about societal and governmental investmentfor much of the post-World War II period. Begin-ning with the GI Bill and the growth of the com-munity college movement, and continuing withpresent-day discussions that range from distanceeducation to tax-based assistance for college, whobenefits from college--and how--has been a re-curring concern. Today, these concerns are espe-cially salient. Growing public scrutiny of highereducation, combined with limited or reduced gov-ernment spending, has focused increasing atten-tion on the benefits of higher education, both froman individual and a societal standpoint.

This report reviews how public dialogue abouthigher education has fundamentally changed, mov-ing away from a broader understanding of the ar-ray of public and private benefits derived fromhigher education, and increasingly zeroing in onits private economic effects.

The goal of the report is to categorize the ben-efits of going to college, providing a more accu-rate and inclusive picture of these benefits. It pro-vides a broad overview of the range of benefitsthat accrue from college education. It also exam-ines how the benefits of college-going can be char-acterized for diverse audiences--includingpolicymakers, education leaders, and the public.

This paper does not offer a comprehensive re-view of the data, or a detailed breakdown of ben-efits by type of institutions (two-year/four-year) orlevel of instruction (undergraduate/graduate). In-stead, it uses examples to characterize the broadrange of outcomes that can be described. Theseexamples, and the categories in which they arepresented, can help to frame policy discussionsabout the purposes and consequences of invest-ment in higher education.


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HISTORICAL DISCUSSION OF HIGHERHISTORICAL DISCUSSION OF HIGHERHISTORICAL DISCUSSION OF HIGHERHISTORICAL DISCUSSION OF HIGHERHISTORICAL DISCUSSION OF HIGHEREDUCAEDUCAEDUCAEDUCAEDUCATION�S BENEFITSTION�S BENEFITSTION�S BENEFITSTION�S BENEFITSTION�S BENEFITS

Discussion of the benefits of higher education hasits roots in the earliest days of American highereducation. The formative discussions of highereducation�s benefits were largely concerned withits public, democratic role. Among the most in-fluential proponents of this position was ThomasJefferson, whose writings about education broadly,and the University of Virginia in particular, shapedpublic attitudes and commitments to public edu-cation in the nation�s first few decades. For ex-ample, Jefferson argued over the course of manyyears that generally available education would havean equalizing role on American society. In his au-tobiography, he describes how such educationwould influence the nation�s democratic values,while simultaneously preserving individual liber-ties:

The less wealthy people,...by the bill for a gen-eral education, would be qualified to under-stand their rights, to maintain them, and to ex-ercise with intelligence their parts in self gov-ernment; and all this would be effected with-out the violation of a single natural right of anyone individual citizen (Jefferson, 1821).

Many of the first American collegiate institutionswere hailed as important milestones in the fledg-ling nation�s democratic well-being. From thechartering of Harvard College in 1636 and theCollegiate School of Connecticut (renamed Yale)in 1701, to the founding of the University of Geor-gia in 1785 as the nation�s first state-supportedinstitution of higher learning, this public role ofhigher education was strongly endorsed. In fact,in all three of these cases, colonial governmentsprovided direct support for their establishment(Rainsford, 1972; University of Georgia, 1998).

This public, democratic function of higher educa-tion, and its equalizing role as a societal institu-tion, was still prevalent a century later with thepassage of the Morrill Act of 1862. The law es-

tablishing the nation�s first land-grant institutionswas premised on the notion that the new indus-trial era would require greater opportunities forhigher learning, �in order to promote the liberaland practical education of the industrial classes inthe several pursuits and professions in life� (Com-mittee on Education and the Workforce, 1998).

As states experienced difficulties in providing thenecessary resources to support these new insti-tutions, momentum built for efforts to provideadditional support for the land-grant colleges.The Second Morrill Act of 1890 allowed for theproceeds from the sale of federal lands to beused to support annual operating grants to thestates for these colleges. Equally as important,the Act for the first time provided federal sup-port for the creation of institutions to educateblack students. The Act acknowledged the im-portance of establishing �equal� institutions forthese students and helped in the creation of thefirst 17 black land-grant colleges (Rainsford,1972).

The democratic purposes of education were re-inforced in the early part of the 20th century,influenced significantly by John Dewey�s classic1916 book, Democracy and Education. Deweyargued that education plays a central moral rolein the nation�s well-being, and therefore must besupported (Wilshire, 1990). As the middle ofthe century approached, this view was strength-ened and expanded to include national securityand economic development as fundamental pre-cepts of the public good. Thus, when the GI Billwas passed near the end of World War II, thelaw was justified in part as a way of ensuring thatveterans would return to the workforce as pro-ductive, contributing citizens. This was thoughtto be a good way to avoid large-scale unem-ployment for returning veterans, which wouldhave had a serious negative impact on the nation�seconomic and social stability.


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Just a few years later, when the Truman Commis-sion on Higher Education--which helped to launchthe community college movement in the 1950s--issued its report, it remarked that the public pur-pose of higher education was to promote �equalliberty and equal opportunity to differing individu-als and groups, and to enable citizens to under-stand� their responsibilities as citizens of a free so-ciety (Ostar, 1991). Likewise, the National De-fense Education Act of 1958, often credited withcreating the first federal student aid program (Na-tional Defense Education Loans), was premisedon responding to the challenge posed by the launch-ing of the Sputnik satellite by the Soviet Union.That challenge to the public good was both politi-cal--preserving democracy in the face of the com-munist �threat�--and economic, since the launch-ing of the satellite presaged fierce competition inthe science and engineering fields (Hansen, 1991).

The passage of the Higher Education Act of 1965,and the subsequent Education Amendments of1972 (which created the Basic Educational Op-portunity Grant program, now known as PellGrants), was rooted in the War on Poverty andthe federal government�s broader efforts to equal-ize economic and social opportunities. It was notuntil the early 1980s, when federal funding forhigher education was reduced and state supportfor public higher education slowed, that the focusof public policy discussions began increasingly tobe dominated by talk of higher education�s prima-rily private economic role, with diminishing refer-ence to the other benefits.

Today, the typical discussions about the value ofhigher education are not about the broad range ofbenefits that it provides. Instead, these conversa-tions tend to focus on the narrow topic of theprivate economic benefits that result from goingto college, such as higher salaries and better jobs.Who is driving these discussions about private eco-nomic benefits? The answer is virtually everyonewith a stake in the higher education enterprise--government officials, the media, the public, evenhigher education leaders. As evidence of this con-vergence, consider these examples:

� Each year, as college graduation season ap-proaches, print and broadcast media stories be-gin appearing about the job prospects for thecurrent graduating class. Many of these storiescite data from the National Association of Col-leges and Employers� periodic survey of em-ployers. The 1997 survey, for example, indi-cates that employers expect 1997-98 to be thebest year for hiring in the last decade (NACE,1997). But little of the focus of the media sto-ries is about the broader social impacts result-ing from these improved job prospects.

� Major national and state-level public policy dis-cussions have frequently returned to the pri-vate economic benefits of a college educationas the basic reason for increased public invest-ment. For instance, when the Hope Scholar-ship tax credit was proposed by President Clintonat a 1996 speech at Princeton University, thePresident framed the importance of the pro-gram primarily as a matter of individual eco-nomic interest, saying in part: �Fifteen years agothe typical worker with a college degree made38 percent more than a worker with a collegedegree. Today, that figure is 73 percent more.Two years of college means a 20 percent in-crease in annual earnings. People who finishtwo years of college earn a quarter of a milliondollars more than their high school counter-parts over a lifetime� (The White House,1996). The eventual passage of a revised Hopeproposal, with its combined tax credits and de-ductions costing an estimated $40 billion overfive years, indicates that policymakers stronglysupport policies that emphasize individual eco-nomic outcomes.

� Given this media and public policy focus, it isnot surprising that the public overwhelminglyassociates college with getting �a good job� andincreasing incomes (The Institute for Higher Edu-cation Policy, 1995). Recent focus groups con-ducted by the American Council on Education,for instance, found that job attainment is by farthe most important benefit that Americans as-sociate with going to college (Hartle, 1998).


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� Higher education leaders are just as likely touse this language to describe the benefits ofhigher education. For example, at hearings con-ducted by the National Commission on the Costof Higher Education in the fall of 1997, severalof the higher education leaders who testifiedtouted the higher average salaries and lifetimeearnings of college graduates. Few describedthe contributions those individuals might maketo social stability, civic life, or other public pur-poses (National Commission on the Cost ofHigher Education, 1997).

In some ways, it is understandable that these dis-cussions focus on the private economic benefits ofeducation. After all, putting a dollar value on thereturns to education puts a �personal� stamp onits importance. This makes the often arcane talkabout policies and programs more concrete for

the public and the policymakers who make thekey decisions influencing public investment in highereducation.

But what has been lost in this contemporary dia-logue about higher education is a balanced viewof the total array of benefits resulting from thecollege experience. This more complete picture,which acknowledges the real and important pri-vate economic benefits of higher education, butalso emphasizes its social and democratic pur-poses, needs to be painted. Absent this compre-hensive portrait, public dialogue and understand-ing is increasingly likely to focus on private eco-nomic benefits, resulting in �the pursuit of certifi-cation and degrees tak[ing] precedence over thegoals of learning, and the private benefits of school-ing tak[ing] precedence over its democratic andcivic functions� (Labaree, 1997).


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CHANGING PUBLIC DIALCHANGING PUBLIC DIALCHANGING PUBLIC DIALCHANGING PUBLIC DIALCHANGING PUBLIC DIALOGUE AND LEADERSHIPOGUE AND LEADERSHIPOGUE AND LEADERSHIPOGUE AND LEADERSHIPOGUE AND LEADERSHIPAnalysis of public and private benefits has been acommon topic in the literature of higher educa-tion. The Carnegie Commission on HigherEducation�s 1973 report Who Pays? Who Benefits?Who Should Pay?, Howard Bowen�s important1980 study The Costs of Higher Education, andeven more recent studies by Kramer (1993), Kerr(1994), and Labaree (1997) have discussed thebalance of benefits that accrue from educationbroadly. But none of these studies has attemptedsystematically to categorize the benefits of goingto college and convey them in a language readilyaccessible to policymakers, the public, and educa-tion leaders.

Why should such a cataloguing of public and pri-vate benefits matter? One important reason isthat, in the absence of a complete understandingof the full range of benefits, selective disinvest-ment in higher education becomes increasinglypossible. That is, if policymakers and the publicdo not have the total picture regarding why in-vestment in higher education matters, other pub-lic policy priorities may end up gaining more sup-port than funding for higher education. The ex-perience in the early 1990s, for example, whenstate support for higher education declined be-cause of rising state costs associated with prisonsand health care, is indicative of this tendency. Inseveral states, funding declines were accompaniedby sharp tuition increases, shifting more of the bur-den of paying for college to individuals, who wereperceived as being the primary beneficiaries ofhigher education.

Another key reason for this more complete cata-loguing of benefits is that much has changed interms of public and policymaker perceptions ofhigher education. For instance, when theCarnegie Commission was conducting the bulkof its work in the early 1970s, public attitudesabout higher education�s social role were muchmore consistent with those of higher educationleaders. Thus, the creation of the Pell Grant pro-gram in 1972 was a bipartisan effort reflecting the

broad consensus of Democrats and Republicansin the U.S. Senate, the Nixon Administration, andRepublicans in the U.S. House of Representatives1

(Wolanin, 1997). This understanding of the pub-lic and private value of college-going continuedthroughout the 1970s, as reflected by the signifi-cant increases in state appropriations for operat-ing expenses of public higher education institutions,and the �high water mark� of funding for federalstudent grant assistance in the late 1970s (Col-lege Board, 1997).

Today, however, scrutiny of higher education isincreasing. State-level efforts regarding institutionalaccountability (largely begun in the 1980s), com-bined with increasing public and policymaker con-cerns about the prices charged by colleges anduniversities, have fundamentally realigned the pub-lic dialogue about higher education.2 This height-ened examination of higher education and con-cern about its pricing policies underscores the needto catalogue accurately and completely the fullrange of benefits that accrue from participating inhigher education.

Further, there has been a significant turnover inthe political leadership governing higher educa-tion and its resources--both at the federal and statelevels. For example, only a handful of the mem-bers of Congress who serve on the relevant com-mittees governing higher education policy servedin that role prior to 1990. Similarly, according tothe National Governors� Association, only five sit-ting governors were in office in 1990 (NationalGovernors� Association, 1998). Term limit lawsin several states also are dwindling the number ofexperienced legislators. This turnover in politicalleadership naturally has led to a significant shakeupin the membership of the governing and coordi-nating boards that shape state-level policy and plan-ning. This suggests that there may be gaps in someof this new group of policymakers� understandingof the continuum of benefits resulting from goingto college.


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The national leadership within higher educationfaces a different kind of challenge. According to a1997 study conducted for Change magazine, asurprising number of the leaders in higher educa-tion identified through a national poll also werenamed in a similar 1978 poll. Most troublingabout the recent study was that the process ofidentifying �young� (under age 45) leaders in theacademy with national stature was much more

difficult than in 1978. This dearth of easily identi-fiable young leaders could create problems forhigher education in the near future as the �senior�group of leaders--those more conversant in thedialogue about public and private benefits of highereducation that characterized the 1970s--begins toretire and recede from the national spotlight(Munitz and Breneman, 1998).


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CHARACHARACHARACHARACHARACTERIZING HIGHER EDUCACTERIZING HIGHER EDUCACTERIZING HIGHER EDUCACTERIZING HIGHER EDUCACTERIZING HIGHER EDUCATION�STION�STION�STION�STION�SBENEFITSBENEFITSBENEFITSBENEFITSBENEFITS

Any attempt to catalogue the public and privatebenefits of higher education is likely to be imper-fect and incomplete. The cataloguing will be im-perfect because efforts to distinguish betweenwhether a benefit is public or private are inexact,and in some cases, arbitrary. For example, oneoften-discussed public benefit of education is thatthe higher incomes of college-educated individu-als produce more contributions to the tax base,benefitting all citizens. However, it is also truethat these college-educated individuals are privatelybenefitting from the higher incomes they earn.Therefore, both public and private benefits are de-rived from the higher incomes of those who haveattended college.

This combination of benefits has been describedas a �cascade� of both public and private benefits.Kramer (1993) illustrates this cascade of benefitsin discussing literacy:

Plainly, a person who can read is better off thanone who cannot. He can take and perform ajob that an illiterate person cannot, and he canearn money in that job. He can also use read-ing skills as a consumer, getting more for hismoney when he spends it. So literacy confersprivate monetary benefits. It also enables a per-son to read for pleasure, and thereby confersnonmonetary private benefits as well.

But the presence of literate people in a society--especially if almost all people are literate--cre-ates advantages for others as well. People cancount on the literacy of others in designing pro-duction processes and reaching markets withadvertising. General literacy becomes a publicbenefit because it enables everyone to rely onthe communicability of ideas in writing, whetheror not the written word is actually used to com-municate in particular circumstances. Some-times this public benefit is appropriated for pri-

vate purposes. If a potential employer places awant ad and someone seeks and obtains thejob advertised, the public benefit of general lit-eracy has resulted in private benefits for bothemployer and employee and these, of course,have monetary value.

In other words, benefits can be public or private,or a combination of the two. Any single benefit,public or private, could also lead to further publicor private benefits--the cascade of benefits that re-sults from education.

The cataloguing of benefits is likely to be incom-plete because efforts to measure or even describethem can be difficult. This is especially true forbenefits that are not easily quantifiable, or for whichlittle concrete data have been compiled.

Nevertheless, this effort to characterize the publicand private benefits is important. Providingpolicymakers and the public with a clear frame-work for understanding how investment in highereducation benefits individuals and society can sig-nificantly enhance the public dialogue. This en-hanced dialogue is essential to maintain investmentin higher education even as it is being transformedby technology, changing student populations, anda host of other factors.

In describing the public and private benefits of go-ing to college, it may be useful to sort the discus-sion of benefits into four general categories.3 Theyare:

� Public economic benefits;

� Private economic benefits;

� Public social benefits; and

� Private social benefits.


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Research on aspects of these benefits exists in vari-ous reports and studies. However, many of thesebenefits have not been widely analyzed, and onlya handful--especially those that have private eco-nomic effects--have been discussed regularly in pub-lic policy settings.

PPPPPublic Economic Benefitsublic Economic Benefitsublic Economic Benefitsublic Economic Benefitsublic Economic Benefits

Public economic benefits are those benefits forwhich there can be broad economic, fiscal, or la-bor market effects. In general, these benefits re-sult in the overall improvement of the nationaleconomy, or major segments of the economy, asa result of citizens� participation in higher educa-tion. Some of the public economic benefits ofhigher education include:

� Increased tax revenues--Individuals with higherlevels of education generally contribute moreto the tax base as a result of their higher earn-ings. For instance, in 1994, persons with atleast some college education paid 71 percentof all federal income taxes, despite the fact thatthey accounted for only 49 percent of all house-holds (Mortenson, 1996).

� Greater productivity--Though U.S. productivityhas increased only modestly in the last two de-cades, nearly all of that increase has been at-tributed to the overall increased education levelof the workforce. In fact, various studies haveestimated that increases in educational attain-ment have offset what otherwise would havebeen a serious decline in the growth in U.S.productivity (Decker, et al, 1997; BLS, 1993).

� Increased consumption--Studies indicate that theoverall growth in consumption in the last fourdecades is associated with the increasing edu-cation levels of society, even after controllingfor income. Educational attainment has beencorrelated with higher consumer spending in arange of categories, from housing to food totransportation (BLS, 1995).

� Increased workforce flexibility--The competitivenature of the global economic system requiresa workforce that is adaptable in order to keeppace with change. Higher education contrib-utes to the increased workforce flexibility by edu-cating individuals in generalizable skills--criticalthinking, writing, interpersonal communication--that are essential to the nation�s ability to main-tain its competitive edge (Pascarella andTerenzini, 1991).

� Decreased reliance on government financial sup-port--Those who have attended college partici-pate in government assistance programs at sub-stantially lower rates than high school gradu-ates or those who have not graduated from highschool. This includes participation in AFDC(now TANF), Food Stamps, Medicaid, housingassistance, and other programs (NCES, 1996;Mortenson, 1995).

PPPPPrivate Economic Benefitsrivate Economic Benefitsrivate Economic Benefitsrivate Economic Benefitsrivate Economic Benefits

This is the most commonly discussed category ofhigher education benefits. Private economic ben-efits are those benefits that have economic, fiscal,or labor market effects on the individuals who haveattended postsecondary education. Examples in-clude:

� Higher salaries and benefits--In both lifetime andaverage annual income terms, individuals earnmore as a result of their higher levels of educa-tion. In 1995, for example, high school gradu-ates earned an average of $21,431 annually,while bachelor�s degree recipients made 73percent more--$36,980 (Bureau of the Cen-sus, 1996). This trend is consistent at all edu-cation levels. Evidence also indicates that thoseindividuals who have attended college receivebetter fringe benefits, including vacation timeand health care, from their jobs (Smeeding,1983).


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Source: National Center for Education Statistics, The Condition of Education, 1996.

Ye a r L e s s tha n 9 -1 1 ye a rs 1 2 ye a rs 1 3 -1 5 ye a rs 1 6 ye a rs 9 ye a rs o r m o re

1 9 7 2 1 1 .5 % 9 .7 % 3 .2 % 1 .5 % 0 .4 %1 9 7 3 1 1 .7 % 1 0 .3 % 3 .3 % 1 .7 % 0 .6 %1 9 7 4 1 5 .0 % 1 1 .7 % 3 .3 % 2 .0 % 0 .8 %1 9 7 5 1 1 .3 % 1 1 .0 % 3 .3 % 1 .5 % 0 .3 %1 9 7 6 1 0 .9 % 1 2 .2 % 3 .5 % 2 .1 % 0 .4 %1 9 7 7 1 1 .7 % 1 2 .0 % 3 .9 % 2 .1 % 0 .3 %1 9 7 8 1 0 .8 % 1 2 .7 % 3 .6 % 2 .5 % 0 .4 %1 9 7 9 1 2 .4 % 1 2 .8 % 3 .8 % 2 .1 % 0 .6 %1 9 8 0 1 1 .8 % 1 2 .7 % 4 .4 % 2 .5 % 0 .4 %1 9 8 1 1 1 .5 % 1 3 .6 % 4 .6 % 2 .7 % 0 .5 %1 9 8 2 9 .6 % 1 4 .1 % 4 .3 % 2 .1 % 0 .3 %1 9 8 3 1 1 .4 % 1 4 .7 % 4 .3 % 2 .5 % 0 .3 %1 9 8 4 1 3 .2 % 1 4 .9 % 4 .2 % 2 .4 % 0 .8 %1 9 8 5 1 1 .8 % 1 4 .0 % 4 .4 % 2 .6 % 0 .4 %1 9 8 6 1 1 .8 % 1 4 .1 % 4 .5 % 2 .4 % 0 .3 %1 9 8 7 1 3 .2 % 1 2 .5 % 4 .5 % 2 .5 % 0 .3 %1 9 8 8 1 1 .5 % 1 3 .8 % 4 .2 % 2 .1 % 0 .2 %1 9 8 9 8 .8 % 1 3 .4 % 4 .1 % 2 .4 % 0 .4 %1 9 9 0 8 .9 % 1 5 .1 % 4 .7 % 2 .5 % 0 .5 %1 9 9 1 1 1 .4 % 1 6 .0 % 5 .5 % 3 .1 % 0 .5 %1 9 9 2 9 .9 % 1 7 .1 % 5 .6 % 3 .7 % 0 .5 %1 9 9 3 9 .6 % 1 6 .2 % 6 .3 % 3 .7 % 0 .4 %1 9 9 4 8 .3 % 1 4 .3 % 5 .8 % 4 .4 % 0 .4 %

Percentage of Persons Ages 25 to 34 Who Participate in AFDC orPublic Assistance by Years of Education Completed: 1972-1994


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� Employment--Individuals who have gone to col-lege levels are employed at higher rates andwith greater consistency. For example, accord-ing to the January 1998 employment reportfrom the U.S. Department of Labor, unem-ployment rates for those with a bachelor�s de-gree or more are half that of those with a highschool degree--1.9 percent compared to 3.9percent. Those persons with less than a highschool degree are more than three times aslikely to be unemployed as bachelor�s degreerecipients (BLS, 1998).

� Higher savings levels--Census Bureau surveysindicate that those with a bachelor�s degree ormore have higher value interest earning assets,home equity, and other financial assets. Thesesurveys also indicate that college-educated in-dividuals contribute at higher rates to retire-ment plans, mutual funds, and other saving de-vices (Eller and Fraser, 1995).

� Improved working conditions--The working con-ditions of persons who have gone to collegehave been found to be significantly better thanthose of non-college individuals. People whohave attended college tend to work more inwhite-collar jobs, in office buildings or otherfacilities with air conditioning and heating, andwith conveniences (ranging from computers, toon-site child care, to consistent work hours)that improve the quality of their lives (Duncan,1976).

� Personal/professional mobility--Research indicatesthat the ability to change jobs, or to readily moveto a different location, is correlated with educa-tional attainment. Individuals who have attendedcollege have greater work opportunities andtend to have skills that can be more easily ap-plied in different job settings, or in other geo-graphic locations (DaVanzo, 1983).

Source: Bureau of the Census, 1996.

$ 1 4 , 6 8 3$ 2 1 , 4 3 1

$ 2 7 , 7 8 0

$ 3 6 , 9 8 0

$ 4 7 , 6 0 9

$ 6 4 , 5 5 0

$ 0

$ 2 0 ,0 0 0

$ 4 0 ,0 0 0

$ 6 0 ,0 0 0

$ 8 0 ,0 0 0

1 - 3 Y e a r s o fH S

H SG ra d u a te

A s s o c i a te 'sD e g r e e

B a c h e lo r 'sD e g r e e

M a s te r 'sD e g r e e

D o c to ra teD e g r e e

Average Annual Earningsby Educational Attainment, 1995


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Public Social BenefitsPublic Social BenefitsPublic Social BenefitsPublic Social BenefitsPublic Social Benefits

Public social benefits are benefits that accrue togroups of people, or to society broadly, that arenot directly related to economic, fiscal, or labormarket effects. Examples of such benefits include:

� Reduced crime rates--Incarceration rates in stateprisons in 1993 indicate there were 1,829 pris-oners with one to three years of high schoolper 100,000 population, compared to 290 per100,000 for those who graduated from highschool, and 122 per 100,000 for those with atleast some college (Mauer, 1994).

� Increased charitable giving /community service--A 1991 study found that 66 percent of thosewith some college, and 77 percent of thosewith at least a bachelor�s degree, perform vol-unteer work. This compared to 45 percent of

high school graduates, and 22 percent of thosewith less than a high school degree. This samestudy also found that financial contributions tocharities were correlated with education levels(Independent Sector, 1992). A study of recentcollege graduates found that 69 percent hadperformed some community service (O�Brien,1997).

� Increased quality of civic life--Various measuresof civic life indicate improvements by educa-tion level. For example, 79 percent of per-sons age 25 to 44 with a bachelor�s degree ormore voted in the 1992 Presidential election,compared to 67 percent of those with somecollege, 50 percent of high school graduates,and 27 percent of those with less than a highschool degree (NCES, 1996).

Source: Bureau of Labor Statistics, 1998.

7.29%

3.99%3.29%

1.99%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

Less than HS HS Graduate Some College College Graduate

Unemployment Rate of U.S. Population25 Years and Older by Educational

Attainment, January 1998


18

Presidential Election Voting Rates for the Population Ages 25 to 44by Educational Attainment: Selected Years 1964-92


� Social cohesion/appreciation of diversity--Individu-als with a college education have �a massiveeffect on social connectedness� and apprecia-tion for a diverse society. Those with morethan a high school education have significantlymore trust in social institutions and participatein civic and community groups at much higherrates than others (Putnam, 1996).

Year 1-3 years 4 years 1-3 years 4 or more of HS of HS of college years of college

1964 60.5% 75.5% 82.9% 86.2%1976 38.5% 57.8% 67.4% 78.5%1984 29% 49.1% 62.1% 74.7%1988 26.3% 47.4% 61.7% 75%1992 27% 49.8% 66.9% 78.5%

Health Characteristics of Adultsby Educational Attainment, 1990


1-3 years 4 years 1-3 years 4 or more of HS of HS of college years of college

Exercise or playsports regularly 29.7% 37% 48.5% 55.8%

Told more than once that they had highblood pressure 21.5% 15.7% 12.8% 12.4%

Smoke cigarettesdaily 37.4% 29.6% 23% 13.5%

� Improved ability to adapt to and use technology--Higher education levels have been associatedwith society�s increased ability to adapt to anduse technology. College-educated individualscontribute more to research and developmentof products and services that enhance the qual-ity of others� lives, and promote the diffusionof technology to benefit others (Wozniak,1987).


19

Participation in Leisure Activities in Prior 12 Monthsby Educational Attainment, 1993

Source: National Endowment for the Arts, 1993.

Private Social BenefitsPrivate Social BenefitsPrivate Social BenefitsPrivate Social BenefitsPrivate Social Benefits

Private social benefits are benefits that accrue toindividuals or groups that are not directly relatedto economic, fiscal, or labor market effects. Ex-amples of these benefits include:

� Improved health /life expectancy--Surveys bythe Public Health Service indicate that thosewith a college education exercise or play sportsregularly at higher rates than non-college par-ticipants. Similarly, only 14 percent of thosewith a bachelor�s degree or more smoke ciga-rettes, compared with 23 percent of thosewith some college, 30 percent of high schoolgraduates, and 37 percent of those with lessthan a high school degree. Life expectanciesare also higher for those who have attendedcollege than non-college attenders (NCES,1994; Feldman, et al, 1989).

� Improved quality of life for offspring--Researchindicates that children whose parents have at-tended college have a considerably higher qual-ity of life. Evidence of these improved life con-ditions includes: children of college-educatedparents are more likely to graduate from highschool and continue on to college; they aremore likely to have higher cognitive develop-ment; and daughters of college-educatedmothers are considerably less likely to become

unmarried teen parents (Dawson, 1991; Ribar,1993; An, Haveman, and Wolfe, 1993).

� Better consumer decision making--Individuals withhigher education levels have increased capacityto make informed, efficient decisions as consum-ers. For example, individuals who have makebetter decisions about how to choose a physicianappropriate for their medical needs, financial re-sources, and geographic location (Rizzo andZeckhauser, 1992).

� Increased personal status--Having a college edu-cation has long been associated with increasedpersonal status.4 Indicators of that status canrange from having a more prestigious job--doc-tor, engineer, or college professor, for example--to being seen as a �leader� within a family.This is especially true for first-generation col-lege attenders (Terenzini, 1996).

� More hobbies, leisure activities--College-edu-cated individuals go camping or hiking morefrequently, and read literature at significantlyhigher rates than high school graduates or thosewith less than a high school degree. They alsovisit amusement parks and art museums, andattend sports events at higher rates (NationalEndowment for the Arts, 1993).

College Les s than HS HS Graduate Som e College Graduate

Played Sports 18% 34% 49% 55%

Exercis ed 39% 55% 71% 75%

Vis ited Art Mus eum 7% 16% 35% 46%

Went to Sports Event 19% 33% 45% 51%


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* Increased Tax Revenues * Higher Salaries and Benefits

* Greater Productivity * Employment

* Increased Consumption * Higher Savings Levels

* Increased Workforce Flexibility * Improved Working Conditions

* Decreased Reliance on * Personal / Professional MobilityGovernment Financial Support

* Reduced Crime Rates * Improved Health / Life Expectancy

* Increased Charitable Giving/ * Improved Quality of Life Community Service for Offspring

* Increased Quality of Civic Life * Better Consumer Decision Making

* Social Cohesion/ * Increased Personal StatusAppreciation of Diversity

* Improved Ability to Adapt to * More Hobbies, Leisure Activitiesand Use Technology

The Array of Higher Education Benefits

Economic

Public Private

Social


21

ConclusionConclusionConclusionConclusionConclusion

The preceding catalogue offers a window into thediverse benefits that can be associated with goingto college. This typology indicates that a broadrange of benefits, both public and private, eco-nomic and social, are related to the investment inhigher education. Despite this evidence, there isonly limited ability to define the consequences ofnot making the case for the benefits of higher edu-cation. In other words, there is no conclusiveway to demonstrate what would happen if na-tional-level discussion of higher education�s ben-efits continued to focus (almost exclusively) on theprivate economic effects.

Nevertheless, it is likely that diminishing public sup-port for higher education�s diverse benefits wouldhave negative consequences on the nation�s abilityto prosper and succeed. Among the possible con-sequences of this deteriorating support are:

� Growing social and economic disparities;

� Increasing public expenditures on socialwelfare programs;

� Inability to compete in an increasinglytechnological society;

� Stagnant or declining quality of living;

� Decreasing health and life expectancy; and

� Diminishing civic engagement and responsi-bility.

Moreover, this deteriorating understanding is likelyto have the same kind of �cascading� effects thatthe benefits themselves can have. For example,diminishing civic engagement and responsibilitywould likely result in reduced participation in ourcivic institutions, such as voting or serving the lo-cal community. This in turn would result in anincreasingly elite cohort of individuals who workin government, or who serve the public interest

--individuals who are likely to focus more of theirattention on the citizens who look, act, or thinkas they do. This would only serve to reinforcethe private economic gains that higher educationproffers.

The shift in national dialogue about higher educa-tion away from its public and democratic purposesand more toward its private economic benefitshas the potential to alter significantly the way thatsociety invests in higher education as a fundamen-tal social institution. Public and policymaker mis-understanding of--or lack of information about--higher education�s diverse benefits must be ad-dressed in order to assure the continued healthand vibrancy of higher education and the society itserves.

One important way to make this connection is todevelop a more formal system for measuring andreporting on the benefits of higher education. Asthe examples cited in this report demonstrate,there is a wealth of information describing boththe public and private benefits of going to college.Unfortunately, that information is collected by, andreported through, a wide range of studies, publi-cations, and media. Since no central source isavailable to receive and disseminate this informa-tion, the ability to enhance the public dialogueabout higher education�s benefits is hampered. Anannual, national report on the benefits of going tocollege should be compiled and disseminated, per-haps augmented by state-level reports that wouldprovide more specific indicators.

It is also important to note that some aspects ofthe benefits of higher education are not well un-derstood, or have not been researched adequatelyto provide quantifiable measures. These limita-tions need to be corrected by the policy analysts,government agencies, and institutional research-ers who are already engaged in collecting and dis-seminating similar information.


22

Ultimately, responsibility for collecting and dissemi-nating information about higher education�s ben-efits is a shared one, involving colleges and univer-sities, research organizations, the media, and gov-ernments. Working together, these entities can

bridge the chasm in public and policymaker un-derstanding about the outcomes of higher educa-tion and lead to more rational, and longer-term,consideration of government and societal invest-ment in postsecondary learning.


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ENDNOTESENDNOTESENDNOTESENDNOTESENDNOTES

1. Only House Democrats were aligned against the proposal, preferring instead a proposal from thehigher education associations (led by the American Council on Education) to endorse a program ofenrollment-based capitation grants (Wolanin, 1997). However, even this ideological split was re-vealing: it reflected a difference in opinion about the form of assistance to higher education (studentvs. institutional), not a fundamental distinction about whether such support was necessary.

2. Declining support for, or understanding of, the public benefits of higher education was certainly notthe only factor. Concerns about fraud and abuse, combined with severe economic turmoil (particu-larly at the state level), were also important factors.

3. This framework has been significantly informed by the analysis of Wolfe and Zuvekas (1995) in theirefforts to catalogue the nonmarket outcomes of schooling.

4. It is likely, however, that the value of this status has decreased over the last few decades as thepercentage of Americans who attend college increases. Given that more than 50 percent of Ameri-cans now attend college at some point, it is more likely today that those without a college educationare perceived as having lower social status than those who have attended college.

Documents

Defining the Public and Private Value of Going to College