The Social Benefits of Education: New Evidence on an Old Question

Abstract

This paper [and chapter] summarizes recent evidence on the social benefits of education. In the past, many observers and policy makers have suggested that investing resources in education is likely to yield substantial benefits to society at large. Indeed, the extensive government involvement in the financing and provision of education is to an important extent based on this belief. However, until recently empirical evidence on the magnitudes of such benefits has been lacking. Recent advances have allowed the consequences of education to be estimated in a credible fashion. As a result, much more is known about the private and social benefits of additional schooling than previously. The purpose of this paper is to provide an overview of these recent advances, and to examine the implications of this new evidence for education policy.