Robert Waldmann writes:
Robert's Stochastic thoughts: Mark Kleiman writes... that there are [extra] social returns [from investing more in education] due to knowledge spillovers, the contribution of an educated electorate to democracy, and reduced inequality due to supply and demand for degrees.... However, to the extent that education works as a signal of something (intelligence, willingness to defer consumption and, maybe, other gratification or willingness and ability to sit quietly and submit to authority) it has private returns which aren't social returns.
Oddly this happens to be almost exactly what I wrote in my one and only newspaper column (in Il Corriere della Sera).
He reaches an inconclusion, not knowing it expansion of schooling would be socially beneficial.
I actually went on and got to an a conclusion. I agree that it is very hard to tell based on theory or micro data. Sad to say, this leaves us with crude macro data on enrollment and welfare.... [N]o country, state or other political entity has ever spent too much on public education (I admit that the case for university level education is weaker than for secondary and especially primary). The countries with bizarrely high enrollment given current income are well known growth miracles (Taiwan. Singapore and especially South Korea). The first states to have high enrollment in high school (midwest in the 19th century) went on to become relatively much richer than they had been (kids in New England were lured off to the then high tech textile mills and New England suffered relative economic decline until the mills went South, kids studied and they got going on the new high tech (the Reagan defense buildup helped a lot too)).
Crude -- sure. Too crude for someone who doesn't depend on such data to get publications -- yeah guess so. Enough to convince me that more money should be shoved into education -- hey a flipped coin that comes up either heads or tails would be enough to convince me.