Return on Education

Increasingly people start asking, ‘what is the return on education’? Some ask this question aloud while others quietly in their minds. This question arises more definitely in the case of higher education and professional courses. This might not have been the case 50 years ago or even 30 years ago. 

So what has really changed? That question leads to another question: is education an economic good or social good?

To get into this debate let’s have some basic definitions in place. An ‘economic good’ is a product or service which can command a price when sold. Pretty much anything we buy from a shop or online is an economic good.  A ‘social good’ or ‘common good’ is a good or service that is shared and beneficial for all or most members of a given community. Examples of social good would be clean air, clean water, literacy or public services like healthcare, law and order.

At the macro level we understand that higher education or scientific research benefits the community, society or even humanity. But the perception changes drastically at micro level. A parent who spends money on her child’s education is often guided by the ‘return on investment’ principle. The average parent asks: ‘What job or a career will my child get into after the education and how rewarding that could be in terms of economic benefits besides the social influence that the degree can command’? The gravity of this concern increases as the cost of education increases.     

Recently when I told that my son joined an MBA program in a university the immediate question my colleague asked was: ‘so what companies is he targeting to join after the course’? My mind was not prepared for an answer to this question. My friend, like many other intelligent parents, assumed that my son is doing an MBA to join a company and therefore, must be targeting the best paying or most well known companies. I didn’t have any such idea, nor does my son have such an idea. For me, education is still by and large a social good. That everyone has to earn a livelihood is incidental to education.

Having been to these economic concepts I went to Google to find what is meant by education. Here is what came up on top of the page. Education is the process of facilitating learning. Knowledge, skills, values, beliefs and habits of a group of people are transferred to other people through storytelling, discussion, teaching, training or research. This definition is not particularly attributed to anyone and this may not be the best definition. But for me it suffices.

This, of course, is not to indicate that all education is for charity. Education is one of the most effective drivers of economic progress both at the individual level as well as at the community or society level. The suggestion is to reduce the excessive focus on the immediate economic outcomes of education. This will open up new and multiple opportunities to the student and probably to other people around. Some of the best educational institutions in the world are not placement focused. In fact, they don’t have job placement cells. Jobs do come to the best students if they so wish. Well, the brightest don’t seek jobs; they create jobs or focus on making life better for others. In that process some of them may become millionaires or make millions happier, healthier and safer.

Much like in many other important things in life, it is difficult to make clear cut boundaries for education or for that matter the objectives of education. It is perfectly all right for each one to have his or her objectives. However, education need not be reduced only as a means of employment.

So, what is the return on education? Return on education is immeasurable. Let that remain so! Even mathematicians admit that everything cannot be measured limited quantities. So they invented a symbol for infinity.

‘The true purpose of education is to make minds, not careers.’ –William Deresiewicz