Estimating the social value of higher education: willingness to pay for community and technical colleges

Abstract

Abstract:Much is known about private financial returns to education in the form of higher earnings. Less is known about how much social value exceeds this private value. Associations between education and socially-desirable outcomes are strong, but disentangling the effect of education from other causal factors is challenging. The purpose of this paper is to estimate the social value of one form of higher education. We elicit willingness to pay for the Kentucky Community and Technical College System (KCTCS) directly and compare our estimate of total social value to our estimates of private value in the form of increased earnings. Our earnings estimates are based on two distinct data sets, one administrative and one from the U.S. Census. The difference between the total social value and the increase in earnings is our measure of the education externality and the private, non-market value combined. Our work differs from previous research by focusing on education at the community college level and by eliciting values directly through a stated-preferences survey in a way that yields a total value including any external benefits. Our preferred estimates indicate the social value of expanding the system exceeds private financial value by at least 25 percent with a best point estimate of nearly 90 percent and exceeds total private value by at least 15 percent with a best point estimate of nearly 60 percent.

The Private and Social Benefits of Double Majors

“…Although there has been substantial research estimating the private returns to education and some research estimating the returns to specific college majors, there is little investigation of the social returns to education in addition to private benefits. An exception is Blomquist, Coomes, Jepsen, Koford and Troske (2014), who find substantial social benefits to community college education. Blomquist et al (2014) compare the societal gains to community college education versus high school education.…”

“…An exception is Blomquist, Coomes, Jepsen, Koford and Troske (2014), who find substantial social benefits to community college education. Blomquist et al (2014) compare the societal gains to community college education versus high school education. Our objective is similarly focused on examining broader societal benefits to education, but our context differs in that we seek to identify whether the private benefits to double majoring provide sufficient incentive to induce students to choose double majors in a way to enhance the social value provided by broader based liberal arts training.…”

Is Free Education Really Free?

“…A study evaluating community colleges in Kentucky found that individuals with an associate's degree make 24 percent more, on average, than those who only have a high school degree. 24 The same study found a 10 percent increase in Kentucky's community college enrollment would provide benefits, economic and social, between $48 million and $61 million. This is quite a substantial benefit for a single state, but it should be noted that these benefits do not necessarily translate into America's College Promise.…”

Ten Guidelines for Better Tables

“…In the published table, the negative numbers stand out-the minus sign is pretty obvious-as are the larger numbers to the right side of the table. Source: Blomquist et al (2014).…”