Doug Rutherford

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The cost of education

March 2012
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I have been watching the student protests in Quebec over rising tuition costs with some interest. First, I do teach at the postsecondary level so I do have a vested bias in education as a general concept. Throw in the fact that after primary and secondary school and a couple of university degrees, with the longstanding joys of student loans, I do have a decent idea of the significance of paying for an education. I also sit in the third seat involved, namely, that a portion of my taxes paid to the territorial and federal governments go towards providing education services.

All of my experience has led me to wonder about the terminology used in the discussion of this issue and whether or not this has resulted in all three groups considering the issue of the economics of education in the wrong light. Students, of course, complain about the high cost of education. That being said, Quebec has a traditionally low fee structure for university students and the average annual university tuition in Quebec is about $800 year less than that of Yukon College. On average, students leave university with a degree and a substantial debt load. Governments also face increasingly high budget forecasts, with the costs of education transfers, staffing, building maintenance, curriculum revision, etc. And, tax payers constantly call for lower taxes, wanting to reduce the pool of funds available for all government services, not just education alone.

All three groups have missed the main point here. The main consideration is that education costs nothing. Nope. Not a penny. Education is not a cost. It is an investment and students, governments and taxpayers should all keep that in mind when the aspect of educational economics rears its head. Like investments, the monies paid toward education at all levels will often pay off, just not in the “now.” Investing is done for the future and if the any of the parties involved are only interested in what yields results in the present, they deserve a certain degree of disappointment and shouldn’t really be surprised when their contrary opinions are simply, and justifiably, ignored.

Think of the alternatives to education spending. For one thing, an educated workforce means a larger workforce. This, in turn, reduces the requirements for spending on transfers for social assistance, Employment Insurance and low income tax credits. And, people with larger incomes tend to spend more, reintroducing monies back into the economy. As a double bonus, those with higher incomes contribute more to taxation revenues for governments at all levels. There are additional benefits. Consider the arguments used by provinces, territories and municipalities to lure new industry to their region. The big point of any such discussion is infrastructure. Unfortunately, most tend to think of infrastructure in terms of roads, power and facilities for employees. Industry, however, also considers a more valuable aspect of infrastructure, namely, a trained workforce. Finding employees that are capable of fulfilling your needs is difficult, particularly when your requirements involve a staff with a high level of technical training. No one wants to train an employee from scratch and no one wants to try to fill an entire facility with employees gleaned from elsewhere, where the costs of staffing your facility will include incentives to relocate and, often, relocation expenses, as well.

Like any good investment, contributions are required from a variety of levels to make these viable. And, like any good investment, the dividends are delivered over an extended period of time. So maybe, if we thought of education as the investment in personal growth and citizenship contribution it actually represents, all levels would reconsider their rhetoric and just place the emphasis on the topic that it deserves…


1 Comment

  1. Luigi Zanasi says:

    I did a cost-benefit study of spending/investing in Yukon College a number of years ago. That spending yielded a 8.5% overall ANNUAL rate of return to society (i.e. split between increased value of production in the general economy, student’s incomes and governments’ future tax receipts). That percentage was pretty much in line with what was found by the OECD and other organizations who have looked at the returns from post-secondary education across the world.

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