Walter W. McMahon

 

On his book Higher Learning, Greater Good: The Private and Social Benefits of Higher Education

Cover Interview of July 01, 2009

In a nutshell

Higher Learning, Greater Good is the first book to systematically identify and develop the evidence necessary to measure comprehensively the benefits of higher education and to estimate their economic value.

The benefits of higher learning include not only increased earnings, access to jobs, and economic growth effects, but also non-market private benefits beyond earnings to individuals and their families and external benefits to the society.

The non-market private benefits are, for example, better health, better spousal and child health, greater longevity, child cognitive development, and increased happiness.  The value of these private benefits estimated by the income-equivalent method is substantial, and approximately equal to the earnings benefits.

The non-market social benefits are different. They are benefits to others in the society and to future generations. They include the contribution of higher education graduates to the improved operation of democratic, civic, and charitable institutions, to human rights, to political stability, to lower crime rates, to social capital and social cohesion, to the generation and adaptation of new ideas, and so forth. They also are substantial; estimated to be another 40% beyond the private earnings benefits.

The book also evaluates the returns to university-based research – its interaction with the education of Masters, PhD, and professional students, and the spillover effects as the new ideas and new technologies generated by research and the education of graduate students are embodied in human capital through the education of undergraduates.

The total measured market plus non-market benefits of higher learning can then be evaluated in relation to institutional costs, which have been rising, but also in relation to the total costs that include the forgone earnings costs which have been flat.  The analysis leads to more meaningful criteria as to whether there is underinvestment, overinvestment, or about the right level of investment in higher education by individuals, families, and government.

In terms of policy, the book addresses the main source of the worsening economic and social plight of the American middle class.  Higher Learning, Greater Good develops the only key major policy that can eventually correct the problem of a whole class of people currently excluded from the benefits of growth and the related problem of rising inequality: increased investment in improved education and skill levels.  Simultaneously, this policy will foster higher economic growth and development.