Good post, saved to my hard drive, but this is clearly wrong: “Economists believe that the financial cost of losing a year of education is that you will earn roughly 10% less throughout your career. If properly discounted this amounts to roughly $100,000”- not if you believe, as many economists do, that education is signaling beyond lerning the 3R’s. It really does not matter if you learn calculus a year later than normal.
I’m sympathetic to the case that education is signaling, but I think that case is less strong for early education. For instance this paper from Argentina uses teacher strikes to value a year of education at 6% of lifetime earnings.
That estimate is not wildly different and seems pretty immune to signaling.
Good post, saved to my hard drive, but this is clearly wrong: “Economists believe that the financial cost of losing a year of education is that you will earn roughly 10% less throughout your career. If properly discounted this amounts to roughly $100,000”- not if you believe, as many economists do, that education is signaling beyond lerning the 3R’s. It really does not matter if you learn calculus a year later than normal.
I’m sympathetic to the case that education is signaling, but I think that case is less strong for early education. For instance this paper from Argentina uses teacher strikes to value a year of education at 6% of lifetime earnings.
That estimate is not wildly different and seems pretty immune to signaling.
See Bryan Caplan’s ratspeak interview http://rationallyspeakingpodcast.org/show/rs-202-bryan-caplan-on-the-case-against-education.html