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The Economic Benefits of Schooling and Reading Competence NIE

Jamison, Dean T.; Young, Kan Hua
Publication Year:
Report Number:
ETS Research Bulletin
Document Type:
Page Count:
Subject/Key Words:
National Institute of Education (NIE), Adult Literacy, Compensatory Education, Demography, Educational Benefits, Employment, Income, National Reading Survey


To calculate the economic benefits of schooling and compensatory education, a statistical model estimated the effects of schooling and literacy on earnings and employment. The literacy measure was obtained for a problem sample of the U.S. population in 1972 with a background demographic questionnaire to 2,308 individuals age 25 to 60, who reported some earnings in 1972. Variables examined were 1972 earnings wage rate work hours years of schooling, reading score, potential work experience, other income, father's education, mother's education, age, race, sex, and employment status. Three models were used: simple earnings function, labor market, and educational achievement. Methodologically, both recursive and simultaneous models were examined in both the labor market and the educational achievement analysis. In terms of increased annual earnings, estimated benefits of a hypothetical compulsory education for a representative individual are the highest for White males ($3,810) and the lowest for White females $1,370). Corresponding benefits for Black males and females are $2,580 and $1,940. Estimated benefits of a low target compensatory rearding program for a representative individual are $323 and $273 for White males and Black males, only $12 for White females, and negative for Black females. (CP). (77pp.)

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