This report was published at NBER.org in January 2011 and was written by Lance Lochner. This is a summary and the title is above.
A growing body of work suggests that education offers a wide-range of benefits that extend beyond increases in labor market productivity. Improvements in education can lower crime, improve health, and increase democratic participation.
Economists have long recognized and measured the effect of education on an individual`s own lifetime earnings. More recently, attention has been paid to the effects of education on other personal and social outcomes. In 1997, over two-thirds of all prison inmates in the U.S. were high school dropouts. But the link between schooling and crime is more complicated than simple prison statistic suggest.
It emphasizes the role of education as a human capital investment that increases future work opportunities, which discourages participation in crime. Variation in the cost of or taste for schooling may also affect the education-crime relationship through accumulated skill levels. Policies that encourage schooling investment should reduce crime rates among youth as they substitute time from crime to school. Education may also teach individuals to be more patient. This would discourage crime. Education also affect preferences towards risk. In most cases, mechanisms related to changes in preferences or social interactions suggest that educational attainment is likely to reduce most types of crimes.
Health amd mortality gaps by education are large and have been growing for decades. Education is more correlated with health than is income or occupation. The literature has identified many reasons education may improve health and reduce mortality.
The hypothesis that education strengthens democracy has a long history, crediting the basic idea to Aristotle. It emphasize the role of education in informing citizens and increasing their capacity to make ¨good decisions¨, while resisting demagoguery. Education may instill civic and democratic values.
Despite the plethora of hypotheses linking education and democracy, formal economic models of this linking are scarce. A notable exception is Glaeser, Ponzetto and Shleifer ( 2007 ) who emphasize the social nature of political action and education`s role in facilitating social interaction.
While democracy and political freedoms are intrinsically valuable, economists have largely been interested in the link between education and democracy based on the potential for democratic institutions to facilitate economic growth. Education and democracy are highly correlated across countries. For example, Barro ( 1999 ) shows that countries with higher average years of schooling also have greater civic liberties. A large literature in political science demonstrates a strong correlation between educational attainment and political participation, civic awareness, support for free speech, and other measures of civic engagement.
A growing literature has established that education impact a wide range of personal decisions. The social benefits from these impacts can be sizeable. For example, Lochner and Moretti ( 2004 ) estimate that high school completion may lower the annual social costs of crime by $ 3,000 per graduate. Increasing high school completion rates in the U.S. by 1% point would reap a saving of more than $ 2 billion annually.
