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Priceless: The Nonpecuniary Benefits of Schooling

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  • Philip Oreopoulos
  • Kjell G. Salvanes

Abstract

Increasing wealth provides key motivation for students to forgo earnings and struggle through exams. But, as we argue in this paper, schooling generates many experiences and affects many dimensions of skill that, in turn, affect central aspects of individuals' lives. Schooling not only affects income, but also the degree to which one enjoys work, as well as one's likelihood of being unemployed. It leads individuals to make better decisions about health, marriage, and parenting. It also improves patience, making individuals more goal-oriented and less likely to engage in risky behavior. Schooling improves trust and social interaction, and may offer substantial consumption value to some students. We discuss various mechanisms to explain how these relationships may occur independent of wealth effects and present evidence that nonpecuniary returns to schooling are at least as large as pecuniary ones. Ironically, one explanation why some early school leavers miss out on these high returns is that they lack the very same decision-making skills that more schooling would help improve.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.25.1.159
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File URL: http://www.aeaweb.org/jep/app/2501_oreopoulos_app.pdf
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Bibliographic Info

Article provided by American Economic Association in its journal Journal of Economic Perspectives.

Volume (Year): 25 (2011)
Issue (Month): 1 (Winter)
Pages: 159-84

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Handle: RePEc:aea:jecper:v:25:y:2011:i:1:p:159-84

Note: DOI: 10.1257/jep.25.1.159
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Human Capital, Signaling, and Ability Bias for X: A Guest Post by Vipul Naik, by Bryan Caplan
    by ? in Econlog on 2013-01-04 00:22:33
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Cited by:
  1. Willa Friedman & Michael Kremer & Edward Miguel & Rebecca Thornton, 2011. "Education as Liberation?," NBER Working Papers 16939, National Bureau of Economic Research, Inc.
  2. Marc Piopiunik, 2011. "Intergenerational Transmission of Education and Mediating Channels: Evidence from Compulsory Schooling Reforms in Germany," Ifo Working Paper Series Ifo Working Paper No. 107, Ifo Institute for Economic Research at the University of Munich.
  3. Grönqvist., Hans, 2012. "Putting Teenagers on the Pill: The Consequences of Subsidized Contraception," Working Paper Series 9/2012, Swedish Institute for Social Research.
  4. Llavador, Humberto & Roemer, John E. & Silvestre, Joaquim, 2011. "“A dynamic analysis of human welfare in a warming planet”," Journal of Public Economics, Elsevier, vol. 95(11), pages 1607-1620.
  5. Graevenitz, Georg von & Weber, Richard, 2011. "How to Educate Entrepreneurs?," Discussion Papers in Business Administration 12440, University of Munich, Munich School of Management.
  6. Stefan Boes & Dominik Hangartner & Lukas Schmid, 2011. "Identification of Causal Education Effects Using a Discontinuity in School Entry Tests: First Results from a Pilot Study," Diskussionsschriften dp1103, Universitaet Bern, Departement Volkswirtschaft.
  7. Colm Harmon, 2011. "Economic Returns to Education: What We Know, What We Don’t Know, and Where We Are Going – Some Brief Pointers," Working Papers 201115, Geary Institute, University College Dublin.
  8. Stutzer, Alois & Frey, Bruno S., 2012. "Recent Developments in the Economics of Happiness: A Selective Overview," IZA Discussion Papers 7078, Institute for the Study of Labor (IZA).
  9. KLEIN Carlo, 2012. "La cohésion sociale : un effet externe de l'investissement éducatif ?," CEPS/INSTEAD Working Paper Series 2012-39, CEPS/INSTEAD.
  10. Arestoff, Florence & Sgard, Jérôme, 2012. "Education, pauvreté, inégalités : les relations économiques élémentaires," Open Access publications from Sciences Po info:hdl:2441/eu4vqp9ompq, Sciences Po.

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