While a four-year college degree is financially
beneficial for most people, it is not necessarily the best option for
A postsecondary degree is often held up as the
one sure path to financial success. But is that true regardless of
institutional quality, discipline studied, or individual characteristics? Is
a college degree always worth the cost? Students deciding whether to invest
in college and what field to study may be making the most important
financial decision of their lives. The return to education varies greatly by
institutional quality, discipline, and individual characteristics.
Estimating the returns for as many options as possible, and making that
information as transparent as possible, are paramount in helping prospective
students make the best decision.
Dropping out of university can be more
advantageous than not having enrolled in university at all
With university education continuing to expand
worldwide, university dropouts will make up a large group in future labor
markets. Dropping out is routinely viewed as a negative indicator. However,
data on university dropouts does not generally provide information on their
labor market outcomes, so empirical evidence is sparse. The studies that
have examined the issue show that dropping out can be more of an advantage
than not having enrolled in university at all. Many dropouts are more likely
than upper secondary school graduates with no university education to
progress in their careers. And many graduate later in their life.
A common language facilitates communication and
economic efficiency, but linguistic diversity has economic and cultural
In today’s globalized world, people are
increasingly mobile and often need to communicate across different
languages. Learning a new language is an investment in human capital.
Migrants must learn the language of their destination country, but even
non-migrants must often learn other languages if their work involves
communicating with foreigners. Economic studies have shown that fluency in a
dominant language is important to economic success and increases economic
efficiency. However, maintaining linguistic diversity also has value since
language is also an expression of people’s culture.
Preschool improves child outcomes, especially
for disadvantaged children
Children from disadvantaged families have lower
levels of school readiness when they enter school than do children from more
advantaged families. Many countries have tried to reduce this inequality
through publicly provided preschool. Evidence on the potential of these
programs to reduce inequality in child development is now quite strong.
Long-term studies of large publicly funded programs in Europe and Latin
America, and newer studies on state and local prekindergarten programs
implemented more recently in the US, find that the programs do improve
outcomes for young children, particularly for those from disadvantaged
Substantial skill shortages coexist with
overeducation, affecting both young and old workers
Large imbalances between the supply and demand
for skills in transition economies are driven by rapid economic
restructuring, misalignment of the education system with labor market needs,
and underdeveloped adult education and training systems. The costs of
mismatches can be large and long-lasting for workers, firms, and economies,
with long periods of overeducation implying a loss of human capital for
individuals and ineffective use of resources for the economy. To make
informed decisions, policymakers need to understand how different types of
workers and firms are affected by overeducation and skill shortages.