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Hm I initially agreed with everyone here that there's no way to really compare the two since I thought about this on a personal level. However my current ratio
by Dwolb 8y ago
Hm I initially agreed with everyone here that there's no way to really compare the two since I thought about this on a personal level.
However my current rationalization of the title thinks about this on a societal level.
If you're the government and have $1B, would you rather fund education directly (through debt) or invest $1B in the stock market? On average you'd expect the wages of everyone you funded to grow at 8.8% of which the government can harvest an average tax rate. Additionally the government can take an interest rate on the debt.
- whatshisface 8y agoThe 8.8% figure came from "an extra year of school," which has absolutely nothing to do with a return on the cost of an extra year of school. The statistic says nothing about how much that $1B would actually grow. Is there a trade-off between academia and industry? Sure, but the economist has made an hilarious pants-down mistake in evaluating it. Maybe the ROI on an extra year of school would be even higher for the author ;)
- Dwolb 8y agoSure but we can derive it. We'd have to know the answer: on average how many extra years of school does $1B fund?
- whatshisface 8y agoIt still wouldn't be comparable: the 8.8% is from an increase on earnings per hours worked, not an interest-style return on tuition money. You would also need to know what people were making on the job.
- Dwolb 8y agoAgreed we'd need to figure out average current salary. Any additional info we need to gather?