Tuesday, July 12, 2011

Why Education Is Life’s Most Valuable Investment

As our family prepares to make a four-year investment in private high school for our older child (presumably with a similar investment for our younger child, plus a college education for both of them), it is worth reflecting on why I think that investing in education is the most valuable investment we can make.  Here is my thinking:

Study after study shows that, on average, well-educated people are wealthier, healthier, and even happier than their less-educated counterparts, so in a land that was founded on “life, liberty and the pursuit of happiness,” it makes sense that education has become life’s most valuable investment. Of course the value of education is important far beyond the U.S. as well – throughout the world, sending children to school is a proven way to help them overcome poverty, improve their nutrition, and raise their self-confidence.

Let’s look at the issue of wealth first. A recent study David Leonhardt described in The New York Times demonstrates clearly that college graduates make more money than people with only a high school diploma throughout their lives, even if they go on to hold jobs that don’t require a college degree. Furthermore, even in this current recession, they are less likely to be unemployed. And although rising tuition rates have made headlines, analysis by The Hamilton Project indicates that a $102,000 investment in a four-year college (including opportunity costs as well as tuition and other out-of-pocket costs) “yields a rate of return of 15.2 percent per year—more than double the average return over the last 60 years experienced in the stock market (6.8 percent), and more than five times the return to investments in corporate bonds (2.9 percent), gold (2.3 percent), long-term government bonds (2.2 percent), or housing (0.4 percent).” But even an investment in basic education makes a difference: illiteracy is closely tied to poverty throughout the world so once the literacy rate in a nation improves, the GDP generally does, too.

Improvements to health are closely tied to income levels. This makes sense: people with more money generally can provide themselves with better nutrition and better healthcare. And people who are better educated are also better at following doctor’s instructions, adapting to a healthy lifestyle, and avoiding risky behavior that would otherwise threaten their well-being.

In general, if you are rich and healthy, you are more likely to be satisfied with your life than if you are poor and sick – and on that basis alone, an investment in education is valuable. But education also provides intangibles that improve the quality of our lives. Mastering skills leads to self-confidence. Learning about the world outside our immediate community helps open our eyes to a variety of choices. Studying the past can help us imagine a different future. Becoming fluent in another language helps us connect with other cultures. The wonders of science open our minds to all kinds of possibilities. And exposure to art, music, and literature brings joy to our hearts. It is these intangibles, I believe, that provide the real payback of a good education.

Investing in education does more than just improve the mind. Education’s strong correlation to a better income means that education also improves the body. And because of education’s intangible benefits, it also improves one’s chances of happiness. So to my way of thinking, an investment in education is truly an investment that covers one’s mind, body and (for lack of a better word) soul. Truly, it is an investment worth making.

Note: this essay won 2nd place in TutoringMatch.com's essay contest.  To see more, click here.

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