A few months ago, the Akron Metropolitan Region, competing among a total of 57 communities across the country, won a $1 million national award for having created the largest gains in educational attainment. That created what CEOs for Cities calls the talent dividend — a term denoting the economic dividend that accrues to communities when they raise their level of educational attainment.
In announcing the award, here is how Lee Fisher, president and CEO of CEOs for Cities, put it: “Each one percentage point increase in degree attainment in Northeast Ohio has a positive $2.8 billion increase in the per capita income for the region. That’s the talent dividend for Northeast Ohio.”
Indeed, how fortunate for the overall economic competitiveness strategy of Northeast Ohio.
The economic benefits of educational gains, however, are seldom acknowledged by business itself, or even by government in Ohio. Meanwhile, other states such as Georgia and Texas have made higher education the cornerstone of their states’ economic development strategy. For example, former governor of Georgia, and later U.S. Senator, Zell Miller, publicly declared that higher education was the infrastructure of Georgia’s new economy. The comptroller for Texas, for example, estimated in a study back in 2000 that every dollar invested in the state’s higher education system pumps more than $5 into the Texas economy. It is a remarkable return on the money for Texans today and a vital stake in the future for successful generations of Texans tomorrow.
Studies show that people with college degrees are earning progressively more and more compared to those who complete only a high school diploma.
By the numbers
The differences are notable: Persons with a doctoral degree will average $3.4 million in earnings over their careers; those with master’s degrees $2.5 million; those with a bachelor’s degree $2.1 million; and those with professional degrees a total of $4.4 million. By comparison, those with only a high school education will earn just $1.2 million during their lifetimes of work.
And therein lies one of the investment values of public, higher education, because with their higher incomes, students in Ohio will pay back to the state $1.84 in inflation-adjusted dollars just in additional taxes for every dollar the state invests in higher education. That is a nearly 2-to-1 return on investment, and by anyone’s accounting, that is an excellent return on investment.
But there is more. There are additional returns of as much as 60 percent per year resulting from the enhancements made possible by the productivity gains of a higher-quality workforce.
And there are yet other social and economic benefits to be counted, including savings from the many costs often associated with the lack of education, including unemployment, welfare and crime. Isn’t it time for Ohio to invest and reap the talent dividend?
Luis M. Proenza is president Emeritus of The University of Akron. He serves on the Executive Committee of the Council on Competitiveness, the Board on Science, Technology, and Economic Policy at the National Academies, as well as its Council of the Government-University-Industry Research Roundtable.