Economic Impact of Higher Education

The economic impact of education is a concept that dates back to 1776 and Adam Smith’s The Wealth of Nations; however, education was only recognized as a major contributor to the economic well-being of both individuals and society nearly two centuries later, after the groundbreaking work of Gary Becker, Jacob Mincer, and Theodore Schultz. The rise of the knowledge economy in the late 1900s increasingly placed the spotlight on higher education as an engine of economic growth and a gateway to individual success. While higher education yields both economic and noneconomic benefits to individuals and society, most studies assessing the impact of higher education have focused on more quantifiable economic benefits. Using human capital theory as the backdrop, this entry describes the economic impact of ...