Center for Business and Economic Research - Ball State University


CBER Data Center
Projects and PublicationsEconomic IndicatorsWeekly CommentaryCommunity Asset InventoryManufacturing Scorecard

About

Commentaries are published weekly and distributed through the Indianapolis Business Journal and many other print and online publications. Disclaimer

RSS Feed

Disclaimer

The views expressed in these commentaries do not reflect those of Ball State University or the Center for Business and Economic Research.

Recent

Two Key Economic Lessons in One BillHoosiers face trade-offs and opportunity costs in the wake of SEA1.

Time to Fix Economic Development PolicyAllocating tax dollars to land development won’t cause economic growth.

The Unanticipated Effects of SB1Businesses, governments and households may all feel the effects.

The Stupidest of PoliciesThis whipsawing of tariff rates has unnerved financial markets, which on Wednesday, were toying with a liquidity crisis.

View archives

Top Tags

jobs and employment 261
economics 201
state and local government 188
education 186
economic development 171
indiana 171
budget and spending 145
taxes 144
law and public policy 142
workforce and human capital 139
Browse all tags
Reporter / Admin Login

April 14, 2008

Long Term Prosperity Linked to Education

Far too often, our worry about the short term state of the economy prevents us from focusing on the long term. That’s too bad because it is the long term state of affairs, not the short run that we have most ability to influence.  The most important issue looming for Indiana and the nation as a whole is education.  Here is the fate of a representative group of ten 18-year-olds.  

Four years ago, our ten Hoosier students entered high school.  One could not read.  As of this spring, he and one or two others are no longer in school, having dropped out due to pregnancy, illiteracy or behavior problems.  Two more are going to college out of state, or have joined the military.  Between three and four more are going to one of our fine four- ear universities in Indiana.  The remaining two or three kids will soon enter the labor force without college experience, though they are very likely to further their education either through employer sponsored training, or at Ivy Tech.  The prognosis for the economic health of these groups is very different.  

The drop-outs are essentially finished.  For every high school drop-out who will become economically self sufficient, there are dozens who will always need public assistance.  As far as labor markets are concerned, these folks are worth far less than a third world worker, but cost far more.  In Indiana, this problem is both rural and urban, and for many communities is a looming disaster.  The best outcome we can really hope for is that they won’t have children and that they stay out of jail (both costly endeavors for taxpayers).  This is a harsh diagnosis to be sure but the truth nonetheless.  

Of the five or six who go to college or the military, only three will eventually finish a four-year degree but the remainder will have picked up job skills along the way.  These are the “above average” folks who will have family incomes above the median. They are the future taxpayers.  We have done a lot for these kids.  We’ve spent perhaps $120,000 of taxpayer dollars on their education, and are subsidizing college.  And for the students who fall by the wayside we did even more.   The five “below average” folks, are going to receive more government services than they pay for.  But the top half of students will have made the most of any assistance they received.   

The two or three who don’t go to college are a huge untapped resource and the ones where public involvement makes the most difference. Here, the investment in technical and community colleges could have a highly salutary effect.  

The real effect of globalization is simply that an increasing number of us are in global labor markets.  How we make the most of this challenge will be the subject of next week’s column.

Link to this commentary: https://commentaries.cberdata.org/118/long-term-prosperity-linked-to-education

Tags: education, personal income and wealth


About the Author

Michael Hicks cberdirector@bsu.edu

Michael J. Hicks, PhD, is the director of the Center for Business and Economic Research and the George and Frances Ball distinguished professor of economics in the Miller College of Business at Ball State University. Note: The views expressed here are solely those of the author, and do not represent those of funders, associations, any entity of Ball State University, or its governing body.

© Center for Business and Economic Research, Ball State University

About Ball State CBER Data Center

Ball State CBER Data Center is one-stop shop for economic data including demographics, education, health, and social capital. Our easy-to-use, visual web tools offer data collection and analysis for grant writers, economic developers, policy makers, and the general public.

Ball State CBER Data Center (cberdata.org) is a product of the Center for Business and Economic Research at Ball State University. CBER's mission is to conduct relevant and timely public policy research on a wide range of economic issues affecting the state and nation. Learn more.

Terms of Service

Center for Business and Economic Research

Ball State University • Whitinger Business Building, room 149
2000 W. University Ave.
Muncie, IN 47306-0360
Phone:
765-285-5926
Email:
cber@bsu.edu
Website:
www.bsu.edu/cber
Facebook:
www.facebook.com/BallStateCBER
Twitter:
www.twitter.com/BallStateCBER
Close