Educational attainment and training affect far more than just the lives of students. These two elements make a lasting impact on the economy, as they influence the number and types of jobs available and the overall competency of a workforce. From preparing young people for the workforce to providing older generations with the necessary skills to stay in the workforce, education and training can make an indelible mark on the economic state of an area. It’s essential to understand the full scope of their effects, both positive and negative, in order to make informed economic decisions.
The Positive Impacts of Education and Training
When it comes to the economy, educational attainment and training can have a lasting impact on everything from available jobs to the actual competency of the workforce. This is particularly true in today’s job market, where competition and skill are increasingly important factors in securing advancement and better job prospects.
Preparing Young People
For young people entering the workforce, education and training can often be a critical factor in becoming gainfully employed in their chosen fields. Having the necessary certification and/or degree can open up more job opportunities, and oftentimes these educational credentials can lead to higher salaries and better job security. Meanwhile, for those seeking to further their careers, additional schooling and training can both improve their prospects and help them stay competitive in their chosen field.
Impact on the Workforce
This has a ripple effect on the economy, as the educational success of one generation can in turn lead to an improved workforce in the next generation. As more individuals become qualified and competent in their professions, the economy can enjoy a surge in productivity and ingenuity, which can lead to a boost in employment and a healthier economic environment. In this way, the notion of “education paying off” has a very real impact on the economic state of an area.
On the other hand, an area that is ill-equipped with educational and training opportunities can suffer negative economic consequences. A lack of adequate educational attainment can mean fewer job opportunities and fewer employees with the skills necessary to ensure proper workforce performance. Even those employees who do make it into a workforce may find themselves underqualified for the job, with their deficiencies eventually leading to reduced productivity and income.
Why Is Education Considered an Economic Good?
Education is considered an economic good for several reasons. First, education provides individuals with the knowledge and skills that are essential for successful participation in the economy. Education helps people acquire the skills that are necessary to get and keep jobs, thereby increasing their economic productivity and ultimately, incomes. Education also increases the likelihood of people participating in the financial markets, as they are more likely to have adequate financial literacy, which leads to better individual financial decision-making. Additionally, education provides individuals with the knowledge necessary to make informed decisions about the products and services they consume, as well as the processes they use in their daily routines. Education also helps people understand the economic incentives behind the products they are consuming, which allows them to make better individual purchasing decisions. Finally, education has been linked to an increase in life expectancy, thus allowing people to participate in the economy for longer periods of time.
What is the Earnings Gap between People with and without an Education?
On average, people who have more education tend to earn more than those with less education. The amount of money people with a higher level of education earn over those with a lower level of education depends on a variety of factors, such as industry, occupation, and location. Generally, however, people with a bachelor’s degree or higher can earn about 57% more than those with a high school diploma alone. Additionally, research shows that, on average, those with a college degree are likely to earn approximately $1.3 million dollars more than those with a high school diploma throughout the course of their lifetime.
Who Pays for Required Workplace Training?
The cost of mandatory workplace training is typically borne by the employer. In most cases, the employer will provide the training materials and hiring related training course fees. However, employees may be required to pay for required certifications and extra advanced training courses on their own. Additionally, in some cases, employers may request their employees to contribute to the cost of mandatory workplace training.
It is clear that educational attainment and training have far-reaching effects that can be either positive or negative for the economy. In order to ensure a healthy economy, communities must be willing to invest in educational and training initiatives that will benefit the entire population. Through investing in our educational institutions and offering more training opportunities, communities can make sure that enough qualified workers are available to support the workforce and that the entire population is equipped with the skills to remain productive. In this way, we can ensure that our economy both survives and thrives for generations to come.