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Is college Education Worthwhile?

Is college Education Worthwhile?. Using Present Value to compare different levels of education and their relative effects. The Question:. Is College Worth it? Are they better off? Present value. Limitations And Assumptions. A Stable Economy Constant CPI/Inflation .

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Is college Education Worthwhile?

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  1. Is college Education Worthwhile? Using Present Value to compare different levels of education and their relative effects

  2. The Question: • Is College Worth it? • Are they better off? • Present value.

  3. Limitations And Assumptions • A Stable Economy • Constant CPI/Inflation. • Constant Wage Increases. • No major recessions. • Job Security • Always employed. • Job availability out of college. • Retirement at age 65.

  4. Limitations Continued • College Assumptions: • Starting school at 18 years of age. • University of Akron representative of average college. • Tuition frozen. • 4 Years of college for BS degree.

  5. Present Value Equation • W0 = Average Starting Wage • g = Average Wage Increase • d = Average Inflation • n = Number of years

  6. Data • Calculation of starting wage. • Calculation of wage increases. • Calculation of inflation. • Number of years used.

  7. Results

  8. Results • Externality • External Benefit • Preferences of the Consumer • Maximizing Utility • Opportunity Costs • Implicit Costs • Explicit Costs

  9. Other Considerations • Greater understanding of world around them • Scholarships • Company’s Expense • Social Status • Job security • College Experience

  10. Beyond the Bachelor’s • Assumptions: • Two years to complete Master’s Degree • Took average of 12-15 credit hours • University of Akron rates • Assumed age was 25-34 (Under 24 a Master’s is rare)

  11. Beyond the Bachelor’s

  12. Conclusion

  13. Conclusion • Money POV: it is worthwhile, however: • The ultimate decision lies with the consumer.

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