The Fiscal Impacts of College Attainment |
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Authors: | Philip A Trostel |
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Institution: | (1) Margaret Chase Smith Policy Center, School of Economics, University of Maine, Orono, ME, USA;(2) Wisconsin Center for the Advancement of Postsecondary Education, University of Wisconsin, Madison, WI, USA |
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Abstract: | This study quantifies one part of the return to U.S. public investment in college education, namely, the fiscal benefits associated
with greater college attainment. College graduates pay much more taxes than those not going to college. Government expenditures
are also much less for college graduates than for those without a college education. Indeed, over an average lifetime, total
government spending per college degree is negative. That is, direct savings in post-college government expenditures (conservatively,
about 85,000 per four-year-equivalent degree over an average lifetime) are greater than government expenditures on higher education (generously, about85,000 per four-year-equivalent degree over an average lifetime) are greater than government expenditures on higher
education (generously, about 74,500 per degree). Plus, the direct extra tax revenues from college graduates alone (roughly
$471,000 per degree over a lifetime) are more than six times the gross government cost per college degree. The average real
fiscal internal rate of return on government investment in college students is conservatively estimated to be 10.3%. |
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