Higher education to lift nations out of recession

PARIS: Investing in higher education will help states move out of recession and also bring lifelong financial rewards to people who choose to study for longer, the Organization for Economic Co-Operation and Development (OECD) said in a report Tuesday.

“As we emerge from the global economic crisis, demand for university education will be higher than ever,” Secretary-General Angel Gurria said in a statement at the release of the annual Education at a Glance report.

“To the extent that institutions are able to respond, investments in human capital will contribute to recovery,” said the document by the OECD, a major policy forum for 30 of the world’s richest nations.

The Organization for Economic Cooperation and Development document said that growing advantages for the better educated and likely continuing high unemployment will encourage more young people to stay in education.

This will benefit both individuals and the states they live in, said the report, which provides an array of indicators on the performance of education systems in OECD countries.

Going to university pays dividends in later life through higher salaries, better health and less vulnerability to unemployment, it said.

In most countries, the difference in pay levels between people who have degrees and people who do not is continuing to grow, said the 2009 edition of Education at a Glance.

It calculates the returns on investment in education by balancing the costs of education and of foregone earnings against prospects for increased future earnings as a result of higher educational attainment.

A male student with a university degree can expect a gross income premium over his lifetime of more than $186,000 (130,000 euros) on average across OECD countries, compared with someone with only secondary education.

“For a woman the figure is lower, reflecting the disparity in most countries between male and female earnings, but it still averages out at just over $134, 000,” said the report.

The highest earnings advantages are in the United States, where a male graduate can expect to earn more than $367,000 extra over his lifetime and a female graduate more than $229,000.

Italy came second for men, at just over $322,000, and Portugal for women, with an average advantage of nearly $220,000.

For states there are major financial benefits too, said the report, noting that national budgets and the overall economy reap an advantage from higher numbers of graduates.

The average net public return across OECD countries from providing a male student with a university education, after factoring in all the direct and indirect costs, is almost $52,000.

That is nearly twice the average amount of money originally invested, said the document. For female students, the average net public return is lower because of their lower subsequent earnings.

“Overall the figures provide a powerful incentive to expand higher education in most countries through both public and private financing,” the OECD said.

The 2009 edition of Education at a Glance also showed that the number of people with university degrees or other tertiary qualifications has risen on average in OECD countries by 4.5 percent each year between 1998 and 2006.
— AFP