Dr. Robin E. Bowen: The Return On Investment, Higher Education Delivers

Each year, the state Legislature is asked to slice up a tax-funded pie. I do not envy the hard decisions legislators must make regarding how to appropriately fund the programs supported by our state government.

I value the infrastructure that is provided by our tax dollars; the sidewalks, streetlights and roads. I appreciate the foster care system that provides services for Arkansas children in need of care. And, of course, I am a strong advocate of public education.

There is a factor, unique to higher education, which is often overlooked. Higher education makes the pie that legislators must divvy up larger. Allow me to state that again. Higher education makes the pie that legislators must divide to provide services to our citizens larger.

How?

The more education one has, the higher the income. The higher the income one makes, the more taxes he or she pays. The more taxes paid by the citizens of our state, the more money the state has available to provide services.

The most recent “Education Pays” report from the College Board found that the average amount of money paid in taxes annually by a person with a professional degree ($23,400) is higher than the entire average take-home pay ($21,000), and almost as much as the total annual income ($25,100), of someone who didn’t finish high school.

The State Chamber of Oklahoma recently performed a study regarding return on investment for funds provided to higher education. For every state dollar spent, the return was $4.71.

I’d certainly invest my money in an entity that gave me almost five times the return rate on an annual basis! While I could not find a similar study for the State of Arkansas, I believe our results would be very similar.

Higher education is a private good. More education correlates with a higher income, which allows an improved lifestyle for the individual and his or her family.

But higher education is also a public good. Higher education has an excellent return on investment and helps us build our tax base. Education also improves the quality of life for those who attain degrees as well as the communities in which they live.

When comparing individuals with a bachelor’s degree to those without, the College Board also found that college graduates are more satisfied with their jobs, are more likely to receive health insurance from their employers, are less likely to engage in harmful habits such as smoking, have more opportunities for exercise and recreation and have lower rates of obesity.

In addition, this same report states employed mothers with a bachelor’s degree have 51 percent more time to spend with their children than their peers without a degree. College graduates are more involved in their communities and report a greater understanding of the important issues facing our communities and our country.

In sum, to cut higher education funding is short sighted for a multitude of reasons. I am grateful for our governor’s wisdom in proposing a budget that would maintain higher education funding during these difficult times.

I sincerely hope that as our hard-working legislators begin the difficult task of slicing the budgetary pie they will consider not only the potential return on investment of the funds they make available to institutions of higher education, but also the other public goods higher education brings to our great state.