By Jeff Wallace, Ph.D., Research Associate Professor, Sparks Bureau of Business and Economic Research
and Shea Stock, Graduate Assistant, Sparks Bureau of Business and Economic Research
The most important investment a person can make is an investment in their education. Public expenditures for higher education are a reflection of the social and economic value created from having an educated population. Similarly, the value of an investment in higher education made by students is a reflection of the returns they expect from getting a degree. Some of the returns can be explained in simple economic terms, such as how much money to expect to get from the investment. But economic returns are not a comprehensive measure of the value of higher education to either graduates or the public. Quality of life factors, including improvements in life style, health, citizenship and engagement in community issues, can be added to the long list of gains from investments in higher education.
Recent discussions about the rising cost of higher education, increasing student debt and the wisdom of getting a college degree are directly related to the returns expected from completing a degree program. While the cost of higher education has increased for both the state and for the individual, the value of an education has also increased. Future earnings are directly related to the educational status of an individual. Future economic growth and development of the Memphis community is totally dependent of the quantity and quality of the local labor force. Site selection experts for economic development projects consider the availability of a high quality labor force as the number one item for companies seeking new locations. Austin Texas is a noted model for community economic growth and development that was driven by the availability of a highly educated labor force.
This presentation examines the return to higher education for graduates of the University of Memphis. The economic gains are very large and the costs are quite low. The returns on the investment are very high for both the student and the public. Investing in higher education is critical to the long-run success of both the community and the graduates of the University of Memphis.