Learning pays
June 5 2005 - Education and
experience have increasing value in the knowledge-based
economy. Workers who continually update their skills are reaping the rewards, leaving
behind those who don't, according to the Federal Reserve Bank of Dallas' 2004
annual report essay.
Over a 40-year career span:
- high school graduates earn an average of $1.5 million, and
- a bachelor's degree produces $2.6 million, compared to
- $3 million for a master's
- $4 million for a doctorate
- $5.3 million for a professional degree
In "What D'Ya Know? Lifetime Learning in Pursuit of the American Dream,"
Senior Vice President and Chief Economist W. Michael Cox and economics writer
Richard Alm argue that workers are pushed toward progressively higher
levels of skill because those who meet the economy's expectations are financially rewarded for their efforts.
The financial benefits of education and experience also are extending
further into life, with 55- to 64-year-olds earning the highest wages.
"The most important tool we have to achieve the American Dream isn't the
computer, the Internet or any of the other innovations sure to dazzle us in
the future. It is the brain," according to the authors. "Its development
through lifetime learning is the key to opportunity, upward mobility and
rising living standards."
They argue that formal and informal lifetime learning is fundamental to the
nation's overall economic growth.
"The U.S. economy can only create good jobs if it can supply the qualified
workers to fill them," Cox and Alm write. The data they present shows the
USA lagging behind other countries in educational quality and they point out that
school reforms would help fuel the knowledge-based economy.
Cox and Alm stress that ultimately a nation cannot transform knowledge
into prosperity without economic freedom: "In turning learning into earning,
America's free enterprise system matters as much as education and experience."
The 2004 annual report can be found on the Dallas Fed
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