Investing in education pays off in the long run for both men and women, says the OECD – and the more educated you are, the better off you are likely to be.
“Even if it may seem costly for individuals at the time of making the choice to pursue further education, the gains they will make over their career exceed the costs they bear during their studies.”
This is true for tertiary education, and also for upper secondary or post-secondary non-tertiary education, according to the report.
For adults, the initial cost of pursuing higher education is outweighed by the well-paid jobs they can secure, making this a strong incentive “to invest in education and postpone labour market activities”.
Employment is not the only good outcome for those with a higher education: they generally have better health, lower morbidity rates and longer life expectancy and are more socially engaged, the OECD says.
“People with higher educational attainment are less likely than those with lower educational attainment to report activity limitation due to health problems across all age groups [and] are more likely to report satisfaction with their life.”
A university education has become increasingly important in all countries, says the OECD, as the labour market is becoming more knowledge-based, and workers are progressively required to possess those skills or have the ability to learn them.
While higher education benefits everyone, male graduates tend to earn about two-thirds more than women graduates with a similar level of education.
“For a man, the net financial returns from tertiary education ($US258,400) are more than twice as high as the net financial returns from upper secondary or post-secondary non-tertiary education ($US112, 400).”
The lower returns for women can be attributed to different factors, it says, such as lower earnings, higher unemployment rates and a higher share of part-time work among women.
Governments also benefit from a well-educated populace.
“Since higher levels of educational attainment tend to translate into higher income … investments in education generate higher public returns, because tertiary-educated adults pay higher income taxes and social contributions, and require fewer social transfers.”
On the downside, one of the challenges facing education systems in many OECD countries is young school students’ disengagement and consequent dropout, meaning that they leave school without an upper secondary qualification.
“These young people tend to face severe difficulties entering – and remaining in – the labour market.”
The report says that leaving school early is a problem for both individuals and society: students’ lack of motivation can be the result of poor performance at school, which can, in turn, lead to further disengagement, creating a vicious circle.
“Recent evidence shows that the risk of lower performance at school can be higher depending on students’ socio-economic, demographic and to adapt to the uncertainties of a rapidly changing global economy.”
Far too many students around the world are trapped “in a vicious circle of poor performance and demotivation” that leads to more bad marks and further disengagement from school, it adds.
Poor performance at school has long-term consequences, both for the individual and for society as a whole:
“Students who perform poorly at age 15 face a high risk of dropping out of school without obtaining an upper secondary qualification. When a large share of the population lacks basic skills, a country’s long-term economic growth is also severely compromised …
“Disadvantaged students tend not only to be encumbered with more risk factors than advantaged students, but those risk factors have a stronger impact on their performance.”