User:CalcNate/Education economics

Investment costs
K-12 public education in the United States is primarily funded by state and local governments, while the federal government provides a smaller percentage of funding through grant programs for at-risk youth. In 2018, the US spent approximately 5% of its GDP on K-12 public education, placing the US as the 7th highest spender per student compared to other OECD nations. Schools in the US spend approximately $17,000 per student, but public education spending varies significantly at the state level. At the college level, increasing tuition and out-of-pocket costs have increased the cost of attending college. The opportunity cost of college also increased due to the higher wages of high school graduates. Over the past decade, the cost of in-state tuition for a 4-year education increased by one-third, with tuition inflation rates decreasing in the recent decade. A 2014 study by economists Jaison Abel and Richard Deitz found that the opportunity cost of attending college amounts to $120,000 due to forgone wages, with the total cost of college amounting to an estimated $150,000 when also factoring in out-of-pocket expenses.

Return on investment
Higher levels of educational attainment can increase lifetime earnings, impacting the return on investment (ROI) of education. In the US at the college and university level, each level of degree attainment significantly increases lifetime earnings as more education is achieved. Lifetime ROI is significantly higher at lower levels of educational attainment than at higher levels (1,200.8% for an Associate's degree vs. 287.7% for a Bachelor's degree). While higher levels of degree attainment can increase lifetime earnings, the ROI decreases at the doctoral level compared to a master's degree. In higher education, ROI also varies significantly depending on the degree concentration. Degree concentration matters when examining the ROI of Bachelor's degrees, with choice of major accounting for half of the variation in ROI between majors. College degrees with the highest ROI are in engineering, medicine, business, and other sciences. While nearly 40% of degree programs do not deliver a financial return, a bachelor's degree can also have social benefits that can increase ROI, which is often not accounted for in typical ROI calculations.

Financing and provision
Since the 1960s, government expenditure on education for low and middle-income countries generally increased while spending on education for high-income countries remained relatively constant. Based on educational funding in OECD countries, compensation for teachers drives education spending at all education levels. At the college and university level, spending on instruction decreases but still consumes the majority of education expenditures.

Since a majority of public education is funded through local taxes in the US, the wealth of a community affects school district funding. Wealthier communities are able to afford to pay more in income and property taxes, while poorer communities cannot, causing inequalities in public education. One notable inequality that arises from differences in funding is the ability of wealthier schools to afford more qualified educators who are more experienced and can improve student test results. Since many European countries finance education primarily through federal taxes, there is less inequality among schools compared to the US since education spending is more uniform. Equal distribution of education resources has the ability to reduce variation in income by creating a more uniform educational system, which can benefit human capital in the long term.