Do Investments in Adult Education Pay Off?

Technological change and globalization have led to restructuring in the labor market, and adult education is a key policy response to deal with this restructuring. However, it is not clear how effective adult education is as a policy response since the earnings and employment effects of adult education are still unclear. Moreover, cost-benefit analyses are rare. This brief discusses recent Finnish results on the earnings and employment effects of adult education. The results show that enrolling in an educational institution as an adult increases earnings and employment. There is, however, notable heterogeneity behind the average impacts. Impacts are largest for those with only compulsory education who enroll at the secondary level. The impacts are smallest for those who have already completed higher education before starting their studies. Cost-benefit analyses show that typically the costs of providing education exceed the economic benefits. For those with only compulsory education, the benefits are often larger than the costs. Public educational investment should be targeted to achieve the best possible cost-benefit ratio. This could mean, for example, targeting investments to individuals who aim to upgrade their qualifications.