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Education and Other Human Capital

Human capital is the economic value of a worker’s skill set: education, experience and other abilities. Investments in workers raise their quality, which leads to improvements in productivity.

Regions competitive in the 21st-century economy are comprised of competitive companies, which in turn consist of competitive individuals. The more highly skilled a worker, the higher is the worker’s productivity. The educational attainment and skills of workers are more important than at any time in the past. Thus, a region’s educational infrastructure and the educational achievement of its residents are key components of regional competitiveness. Higher education in particular provides benefits not only to those individuals obtaining this advanced education, but to society as a whole.

University Economist Reports

The Economic Impact of Raising the Educational Attainment of Arizona's Workforce: 2019 Update, July 2019
An update to the May 2015 paper, this paper calculates the economic benefits to Arizona of raising the educational attainment of the state's workforce. An impact is calculated based on historical data and simulations of future benefits are provided. A PowerPoint summary of the report is available here. The default assumptions used in the simulation described in the paper can be changed. Click here to access the simulation tool.

The Value of a College Education and the Burden of Student Loan Repayment, October 2018
Estimates the average financial return on investment of a bachelor's degree for men and women, examines the variation in the rate of return by field of study, and investigates the burden of student debt.

An Examination of Public Education in Arizona Compared to the Nation, October 2018
Provides a broad evaluation of public education in Arizona, with comparisons to other states and the nation. Elementary and secondary education as well as higher education are examined.

The Relationship Between Government Finance, Educational Attainment, and Economic Performance, September 2018
Compares states and the nation over time on government finance, including revenues and expenditures specific to education, educational attainment, and economic performance, as measured by productivity, prosperity, and aggregate growth. Examines the relationship between these topics. 

Occupational Requirements, June 2017
This report examines occupational data, focusing on the typical requirements to obtain an entry-level position in each occupation, making comparisons of Arizona and its subregions to broader geographies.

The Educational Attainment of the Workforce, March 2016
Compares the educational attainment of the workforce in Arizona to the nation and to other states. Discusses educational attainment goals set by various organizations around the country.

The Economic Impact of Raising the Educational Attainment of Arizona's Workforce, May 2015
Standardizes the calculation of the economic benefits of raising educational attainment. Demonstrates the calculation based on historical data and simulates the effects in the future. The default assumptions used in the simulation described in the paper can be changed. Click here to access the simulation tool.

Educational Attainment by State and Metropolitan Area, May 2015
Examines recent data on the level of educational attainment, and the change over time, by state and metro area. Includes a focus on the workforce. 

A Review of PayScale and Its College Education ROI Rankings, January 2014
Critiques the return on investment rankings of institutions of higher education published by PayScale. Significant methodological and data issues are identified.

Has the Return to Investing in a College Education Declined?, December 2013
A number of articles have appeared recently questioning whether higher education provides a high financial return. This analysis finds that the rate of return on a college investment has decreased only modestly over the last decade and remains quite high.

Benefits From Improving Educational Attainment in Arizona, August 2012
Discusses the individual and community benefits associated with educational attainment and reviews the educational attainment of Arizonans. Assesses the public policies necessary to enhance attainment and estimates the economic benefits from an increase in attainment.

Economic Growth: The Importance of Education and Technological Development, January 2009
The importance of economic growth to the standard of living and individual well-being. Education and research and development are of particular importance to productivity gains and overall economic growth.

The Societal Benefits of Higher Education, April 2008
A short summary of the societal benefits specific to Arizona, including an estimate of the benefits of increasing the percentage of university graduates.

Quantitative Examples of the Financial and Economic Benefits of Higher Education, March 2008
Looks at individual financial benefits, social financial benefits, and economic benefits of university research.

Educational Attainment in Arizona Compared to All States
, November 2005
A summary of educational attainment nationally and by state, with a particular focus on those active in the labor force.

Higher Education Enrollment and Finance in Arizona Compared to All States, October 2005
An analysis of public support for higher education nationally and by state.

The Value of Higher Education: Individual and Societal Benefits, October 2005
An in-depth look at the benefits to individuals, the economies where educated individuals work and live, and society in general of enhanced educational attainment.

     Five Reasons to Skip College: A Reply, May 2006
     A response to an article at Forbes.com that questioned the value of higher education.

The Economics of Early Care and Education in Arizona, March 2004
A discussion of the child care industry and its economic impact, a literature review of early care and education, and the costs and benefits of an early care and education program in Arizona.

Related Articles and Reports

Education Pays 2019: The Benefits of Higher Education for Individuals and Society, College Board, January 2020

College Attainment, Income Inequality, and Economic Security: A Simulation Exercise, W.E. Upjohn Institute, January 2020

Research Note: Combining Early Education and K-12 Investments Has Powerful Positive Effects, Center on Budget and Policy Priorities, February 2019

Evaluating the Return on Investment in Higher Education, Urban Institute, September 2018

Educating a Workforce: Keeping Local Talent, Milken Institute, June 2018

From Preschool to Prosperity: The Economic Payoff to Early Childhood Education, W.E. Upjohn Institute, September 2014

Putting Productivity First, The Information Technology and Innovation Foundation, July 2014

Arizona's Education Financing/Elementary and Secondary Education: 2002-2011, Arizona State University, Morrison Institute for Public Policy, December 2013

Strong Start. Early Education in Arizona, 103rd Arizona Town Hall, November 2013

Troubling Trends in Arizona's College Attainment Rate, University of Arizona, Economic and Business Research Center, September 2013

Higher Education Pays: But a Lot More for Some Graduates Than for Others, College Measures, American Institutes for Research, September 2013

A Matter of Degrees: The Effect of Educational Attainment on Regional Economic Prosperity, Milken Institute, February 2013

To Learn and Earn: Arizona's Unfinished Business in Human Capital, Morrison Institute for Public Policy and Arizona Minority Education Policy Analysis Center, March 2009

America's Perfect Storm: Three Forces Changing Our Nation's Future, ETS (Educational Testing Service), January 2007

Estimating the Social Return to Higher Education: Evidence from Longitudinal and Repeated Cross-Sectional Data, Journal of Econometrics, 2004

Workers’ Education, Spillovers and Productivity: Evidence from Plant-Level Production Functions, University of California, Berkeley, January 2004

Related Links


Alliance for Excellent Education

Battelle for Kids

Business-Higher Education Forum

Center for the Future of Arizona

College Success Arizona


Expect More Arizona

Milken Institute