My daily reading brought me across another interesting article today related to education and economics. In George Will's Washington Post Editorial today, he has a profile of the young economist Austan Goolsbee who is both an economics professor at the University of Chicago and an advisor to the Sen. Barack Obama campaign for President. Other than being an interesting article about a young economist with a very bright future, it is relevant to this blog because of this:
In 1980, people with college degrees made on average 30 percent more
than those with only high school diplomas. That disparity has widened
to 70 percent. In the same year, the average earnings of people with
advanced degrees were 50 percent more than those with only high school
diplomas; today, it is more than 100 percent.The market is shouting "Stay in school!" and Goolsbee's conservative colleagues at Chicago
say a high tax rate on high earners is "a tax on going to college."
Conservatives say: Don't tax something unless you are willing to have
less of it. But Goolsbee says: Conservatives often exaggerate the
behavioral response to increased tax rates. The solution is to invest
more in education, which will raise wages, reduce inequality and move
toward equilibrium. The GI Bill was, he says, so prolific in
stimulating investment in "human capital" -- particularly, college
education -- that for a while the return on it went down relative to
high school.