US loses $956 billion every year due to inequality in education

 

A new report, The Cost of Economic and Racial Injustice in Postsecondary Education, finds that inequality in postsecondary attainment causes the United States to miss out on $956 billion in public monetary benefits annually, in addition to numerous nonmonetary benefits to society. The share of adults with an associate’s degree or higher would have to increase by 18 percentage points to equalize attainment by economic status and race/ethnicity. Increasing attainment by this much would require an initial public investment of $3.97 trillion, but it would yield substantial benefits to individuals and society, including increased tax revenue and GDP and decreased spending on criminal justice, public health, and public assistance programs. Over time, these monetary gains would outweigh the associated costs. Increasing attainment would also produce valuable benefits such as increased critical thinking abilities, stronger civic engagement, lower inclinations toward authoritarianism, better health, more pluralistic orientations, boosts in agency and empowerment, and a rise in happiness. Narrowing wealth gaps is essential for establishing a more equitable society. Closing gaps in educational attainment would help narrow gaps in annual earnings and could thereby help narrow wealth gaps by improving people’s potential to accumulate wealth through increased savings. But wealth inequality is too big a problem for education to solve alone, since it cannot erase wealth gaps created through centuries of oppression and discrimination. It also cannot remove gaps perpetuated through the intergenerational transfer of wealth and through social and economic systems that protect the assets of the privileged.

Higher earnings resulting from higher educational attainment among workers could yield a $308 billion annual increase in tax revenue.   Spending increases on goods and services could result in an annual boost of $542 billion to the US GDP.

Increased educational attainment could yield a $13.8 billion annual reduction in public criminal justice costs by reducing the number of incarcerated people.   Higher levels of educational attainment in the population could lead to savings of $58.7 billion annually on public health expenditures.

The report also explores how addressing factors like student loan debt and wage discrimination in the labor market might further boost the benefits associated with greater equality in postsecondary attainment. To read the full report, visit cew.georgetown.edu/PublicBenefit.