What is the return on investment in education?
The mantra that we 'need to invest in education' to boost our future economic and social prospects has been well aired in media and political circles recently. However my natural inclination is to take a sceptical view, especially when something is touted as an unsupported self evident truth. In this light the recent OECD report, 'Education at a glance 2009' makes interesting reading.
Education and unemployment
The report looking at the period 1997-2007, proves that education is a good insulator from the worst effects of a downturn. The report shows a significant difference in employment levels between those with 3rd level education and those without. In Ireland's case this gap is stark with unemployment among those with education up to 2nd level at 10% while among those with 3rd level the figure stood at just above 2%.
Return on investment
The report also looked at impact 3rd level education had on earning power over a lifetime and found a positive impact here too. Average earnings across the OECD are almost double for those with 3rd level education. The report shows that males in the US with 3rd level education earn a premium of in excess of 300,000 USD (net present value) over their lifetime when compared to those without.
While the return to the public purse on an investment in 3rd level education is double the amount spent. From a public and personal wealth perspective the incentive to participate and expand 3rd level education is a strong one!
What it means for Chartered Accountants?
The research bears out anecdotal evidence about the impact of education and an interesting follow on piece would be to assess the impact on those with 3rd level qualifications such as Chartered Accountants who then undertake further programmes of study such as an MBA or a Diploma programme with Chartered Accountants Ireland. The trends would seem to suggest that the impact of such further education would be a positive one but until research can back this up it remains in the realm of informed speculation.
Joe Carroll is Learning and Development Manager with Chartered Accountants Ireland. To learn more about the upcoming 2010 diploma programme go online.