“Show Me the Money”—What Impacts Students’ Future Earning Potential?
Vol. 13 No. 9
How much money can today's students—tomorrow's work force—expect to make over their lifetimes? As it turns out, private-independent schools control several factors that may impact a student’s lifetime earning potential.
Excellent Early Childhood Education
A child’s early educational experiences ripple far into their lives. In “How Does Your Kindergarten Classroom Affect Your Earnings? Evidence from Project STAR,” Raj Chetty and his fellow researchers found that students in “higher quality classrooms in grades K-3” on average earned more money, saved more for retirement, were more likely to attend college, and lived in better neighborhoods than students assigned to other classrooms.
According to the study, class size and “better teachers” are two factors that play a role in determining classroom quality. This leads us to question: What constitutes “better teachers”?
By “better teachers,” Project STAR researchers argue that teachers with several years’ experience were “better” on average. In fact, the study finds that a student’s earning potential increases by over $1000 annually if his or her kindergarten teacher had more than 10 years of experience.
Another study headed by Chetty entitled “Measuring the Impacts of Teachers II: Teacher Value-Added and Student Outcomes in Adulthood” expands on the first study’s concept of “better teachers.” Replacing a teacher who performs in the bottom 5% with a one of even “average” quality, Chetty and his colleagues claim, will increase a classroom’s lifetime income by roughly $250,000. Furthermore, by putting a teacher in the top 5% into a struggling classroom, a child’s cumulative lifetime income increases on average by $80,000.
Cognitive and “Soft Skills”
A November 2013 study by the Melbourne Institute of Applied Economic and Social Research called “The Long-Run Effects of Catholic Schooling on Wages” found that graduates of private Catholic schools could expect to earn more money, more quickly, than their public school counterparts. Dr. Nikhil Jha and Cain Polidano write that the students’ higher earning potential is directly linked with their Catholic K-12 education and not necessarily with higher education, as had been previously suggested.
Indeed, the report goes on to say that no evidence was found “to suggest that these benefits are peculiar to Catholic schooling, with similar benefits estimated for graduates of independent private schools” in general. So what's the advantage that private-independent schools offer that public schools can't deliver.
Dr. Jha has suggested in interviews that a private school's focus on mission causes students to learn desirable soft skills like confidence and persistence—qualities employers look for in their managers. A private school’s focus on soft-skill acquisition rather than strict emphasis on quantifiable achievements like standardized test scores, may account for the study’s finding that students from a Catholic educational background advance more quickly in their chosen careers than their public peers.
Money certainly isn’t everything in life. But, in today’s economy, an individual’s financial standing can indicate how well that person has “succeeded” with his or her life’s work. Understanding the impact teachers, class size, and a soft skill focus has on students after they leave your school will inspire and drive you to provide the very best experience for them you can.
Additional ISM resources:
Research: Synthesis of IES Research on Early Intervention and Early Childhood Education
ISM Monthly Update for Division Heads Vol. 10 No. 1 Training to Lead
ISM Monthly Update for School Heads Vol. 12 No. 9 Attracting Exceptional Teachers
Additional ISM resources for Gold Consortium members:
I&P Vol. 37 No. 15 Foreign Language in the Elementary Grades: Is It Worth It?
I&P Vol. 33 No. 7 Teacher Impact: How to Identify the Difference Makers