During his State of the Union address earlier this week, President Obama pointed out how
"it’s a simple fact the more education you’ve got, the more likely you are
to have a good job and work your way into the middle class." Assistant
Secretary for Economic Policy and Chief Economist Dr. Janice Eberly echoed this
same notion a few days before by traveling to the Massachusetts Institute of
Technology (MIT) campus in Boston to participate in a forum discussing the "Economics of Higher
Education." Sharing findings
from a report released late last year by Treasury in conjunction with the Department of
Education, Assistant Secretary Eberly spoke about the real economic benefits of
pursuing a higher education and its role in addressing economic mobility and
inequality.
The event, sponsored by
MIT’s Department of Economics and School of Humanities, Arts, and Social
Sciences, featured a panel of scholars and policymakers in the field of higher
education. Assistant Secretary Eberly gave a presentation that covered several
important observations on the strong positive returns of higher education for
individuals and society as well as the federal government's growing support for
it.
One chart that Assistant
Secretary Eberly presented showed how people with more education typically earn
more and have a lower likelihood of being unemployed. Assistant Secretary
Eberly stated how "in 2011, the typical worker with just a bachelor’s
degree earned about $1,000 a week, roughly two-thirds more than those with only
a high school diploma. The unemployment rate for workers with a
bachelor’s degree was 4.9 percent, about half of the rate for people with only
a high school diploma."
Assistant Secretary Eberly
pointed out that education is a key to economic mobility: “This figure shows
that without a college degree, children born in the lowest income quintile have
a 45 percent change of remaining in the bottom quintile as adults and a nearly
70 percent chance of ending up in the bottom two quintiles. With a college degree, children born in the
bottom quintile have less than a 20 percent chance of staying in the bottom
quintile of the income distribution and about an equal chance of ending up in
any of the higher income quintiles.
Likewise, among those born in the top quintile, education plays a strong
role in maintaining higher levels of income across generations.”
Discussing how the federal
government has become increasingly involved by providing more need-based
financial aid for higher education such as Pell grants and Stafford loans,
Assistant Secretary Eberly also noted how the substantial change in the source
and type of education finance has been a result of eroding state and local
funding over the years. Eberly said that while education policy has often been
implemented at the local and state level, the federal role has been growing
over time – both for budget reasons and also because of increasing recognition
of the national interest in human capital issues.
Assistant Secretary Eberly
concluded her presentation at MIT by emphasizing how education is “one of the
most important issues of our generation.” There are proven personal economic
benefits to attending college and the broader role
of a well-educated workforce is also vital to our nation’s future economic
growth.
To read the full report
released by Treasury last year please click here and to learn more about the Obama Administration's
latest education initiatives please visit here.
Anthony Reyes is the New Media Specialist at the U.S. Department of the Treasury.