Experts Say Education is an Investment, Not Just an Expense

Capitol Ideas Growth and Prosperity Special Edition / April 21, 2011

Even though states are facing extreme economic stress in the wake of the Great Recession, policymakers should stop thinking about education as an expense without a return.

That was one of the messages of Sara Watson, senior officer for the Pew Center on the States, who spoke during the “Increasing Global Competitiveness through Collaborative Education and Workforce Development Efforts” session during The Council of State Governments’ Growth and Prosperity Virtual Summit of the States.

“We want to get out of the idea that all funding for children is a zero-sum gain,” Watson said. “… Investing in children is not just a social policy, but an economic development policy as well.”

Watson said research has shown children who participate in early education programs are less likely to be in special education, less likely to repeat grades, more likely to graduate high school and more likely to go to college. They also have a higher rate of employment than those who do not participate in early education programs.

“Early childhood programs definitely will give you a run for your money compared to tax incentives, especially at the national level,” Watson said.

Elizabeth Schneider, vice president of state advocacy and outreach for the Alliance for Excellent Education, said the country overall is doing a poor job of getting students to complete high school and be ready for the workforce. Three out of every 10 high school students don’t graduate and about one-third of those that do graduate aren’t ready for college or a career.

Improving education throughout the system could have tremendous financial implications for states, she said. If the high school dropout rate could be cut in half, the 650,000 new graduates would result in a $7.6 billion increase in earnings and $713 million in increased state and local taxes annually. If states eliminated the 42 percent of college students who enroll in remedial, noncredit-bearing courses each year, they could save $3.7 billion in remediation costs and lost earnings.

“Education and the economy are intimately linked,” Schneider said. “It’s a connection that needs to be better understood by the public.”

Daniel J. Hurley, director of state and federal relations and policy analysis for the American Association of State Colleges and Universities, said higher education needs to be better aligned to the workforce needs of businesses and industries.

Leaders of the Minnesota State Colleges and Universities System visited 35 employers to understand their workforce needs, Hurley said. That led to strengthening coursework at colleges and universities, expanding opportunities for internships and apprenticeships, and increasing the number of online course to make classes more accessible for nontraditional students. In 2008, the Ohio higher education system approved a new performance-based funding formula that takes into account the number of graduates at each institution in high-priority fields, such as nursing and science, technology, engineering and math fields.

In Washington state, higher education officials conduct an assessment every two years of the credentials offered and the skills experts are forecasting employers will need from the workforce. “… (It’s) a good idea for states to look at that on a regular basis,” Hurley said.

Hurley and Schneider both said the adoption of the Common Core State Standards by more than 40 states is one of the most promising things to happen to education recently. The initiative, led by the Council of Chief State School Officers and the National Governors Association, sets common academic expectations for what students should be able to do in English and math at each grade level regardless of what state the child lives in.

“It’s all about holding our youth to higher expectations, higher standards,” Hurley said. “… I think that’s a remarkable accomplishment for this nation. ... I would encourage legislators to continue to be champions of the Common Core movement.”