The Externalities of Education
Education forms the very essence of all our initiatives. What we do is what we know and have learned, either through observation or through instructions and assimilation. The importance of education in society is cohering and indispensable, which is why society and knowledge cannot be ever separated into two distinct entities. The potential benefits of education are diverse. They may accrue to the individuals receiving education, to their households, and to their society or community. This paper focuses on three main positive externalities: higher income, human Capital, and socio-cultural diversity.
Higher levels of education do result in higher earning power. On average, the benefits of a four-year college degree are equivalent to an investment that returns 15.2% per year(Greenstone $ Looney ,2011).Higher education incorporate significant contributions to society, with higher educated workers paying more tax, which will go on to pay other people working. Higher income also prompts the growth of economy, which produces more jobs opportunities because people will spend more money at businesses. This means businesses have to hire more people to work to take care of the customers
Also an educated population provides a more valuable human capital base to the economy. A well-developed economy has maximum concentration of jobs in the tertiary sector which requires a highly skilled work force which has expertise in specific fields. A quality education will produce a better work force especially now that the world is going more technological .For instance the most developed country in the world, the United States has the most skilled human resources with maximum proficiency. Also, developing countries which adopted, tried and tested technologies from other nations require skilled technicians, engineers and managers to make use of them. This can only be achieved by providing quality education.