What do schools do?
When we think about K-12 schools, we think about preparing young people for a career or for going on to college. But, as N.C. State University economist Mike Walden points out to host Mary Walden, that’s not all that schools contribute.
“Well, Mary, as economists look at, for example K-12 – and, of course, you and your previous career have worked very hard at that level and I thank you for it – we really think of what they do in two categories: one, building what we call human capital and the other building what we call social capital.
“Human capital simply means we are trying to give kids knowledge and skill that will allow them to participate better in the economic workforce, and studies show, for example, that if you have a child that graduates from high school versus a child that did not graduate from high school, that one graduating from high school will face a lower unemployment rate over their life and they’ll also earn more money, maybe somewhere between $6,000 and $9,000 of extra annual income. So, that’s obviously contributed to by K-12 school.
“Now the other thing, social capital, simply means that as children go through school and they learn about health, as they learn about being positive contributors to society, that they will perhaps in their lifetime have lower health-care costs. They will be less likely to participate in crimes. And so the public sector will spend less on, for example, the average high school graduate than they will on the average child who does not finish high school. So this is what we call building social capital.
“And then finally I might say that you find as you look around the country … at counties where schools are performing better, some of that improvement in the schools is reflected in better real-estate values.”Category: Economic Perspective