Economic Return on Education 2012

Economic Return on Education 2012


OECD Education at a Glance 2012


Contains data on the financial return on education for OECD countries, from the 2012 release of the Education at a Glance report.

From the Education at a Glance:

The overall benefits of education can be assessed by estimating the economic value of the investment in education, which essentially measures the degree to which the costs of attaining higher levels of education translate into higher levels of earnings.

To understand how costs and benefits are shared between the private and public side, the calculation of benefits includes taxes, social contributions and social transfers as well as differences in the probability of finding work by educational level. The cost components include public and private direct costs, as well as foregone earnings while in school, adjusted for the probability of finding work, and for foregone taxes, social contributions and social transfers.

The indicator is broken down into component statistics:

  • Year of measurement
  • Direct cost
  • Foregone earnings
  • Total costs
  • Gross earnings benefits
  • Income tax effect
  • Social contribution effect
  • Transfers effects
  • Unemployment effects
  • Total benefts
  • Net present value
  • Internal rate of return

There are six tables included for each combination of the following variables:

  • Public or private value
  • Secondary or Tertiary level education
  • Men or Women

The XLS file includes the tables in both English and French.

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Charlene Manuel's picture

Hey Samuel,

Just got this response from the team at OECD. Hope it helps!

The column on the left is negative because they are estimates for costs incurred by a student to go to university – foregone earnings while they are at university, the extra income tax they will pay over their lifetime (based on the principle that they will earn more and so pay more income tax over their lifetime than someone who did not go to university), direct cost (cost of going to university). And then the column on the right is the direct extra financial benefit of going to university. So for the US, the total is USD 329, 552 – right column minus left column.

Samuel Pushpak's picture

I'm unable to comprehend the columns.

Why are Direct costs , earnings and total costs negative in values ?
What is net present value ?