Benefits of Higher Education

Is it worth investing in a university degree? Does it still guarantee better salaries and jobs? What other benefits does higher education bring? Does it have positive effects on health and individual well-being? Find out the answers to these and other questions in this study by Fundação Francisco Manuel dos Santos.

16 November 2017

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Benefits of Higher Education

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Higher education: economic and non-economic benefits

When you enrol in higher education, you have access to much more than a set of classes. The knowledge and development that come from higher education open up your horizons, give you access to a wealth of scientific and cultural assets that were previously unavailable to you, give you independence and the confidence to play a part in community life that you wouldn't otherwise achieve and strengthen the virtues that regulate your conduct.

It is therefore not surprising that people with a higher degree feel more satisfied with life, broadly speaking. Part of this satisfaction is due to their better results on the job market, but another part is due to their better health and the greater trust they have in institutions and in others. But as well as individual benefits, schooling benefits the whole community.

More educated individuals tend to have less antisocial, self-destructive or hetero-destructive behaviour and participate more actively in their community's dialogues. In fact, the benefits of higher education are multidimensional, they are consumption and investment, they are individual and collective.

However, studying also entails costs, arising from the student activity itself, such as what is spent on materials, textbooks, books, tuition fees, meals and extra activities, or the salary you no longer earn because you are devoting so much of your time and energy to studying.

This study by Fundação Francisco Manuel dos Santos sets out to identify and measure the benefits of higher education in a comprehensive, rigorous and systematic way for the Portuguese case, looking at indicators such as:

the relationship between higher education and employment
the relationship between higher education and wages
the effects of higher education on health
the effects of higher education on confidence
the effects of higher education on civic participation.

The increase in expected income more than offsets the costs of student activity and lost wages. In Portugal in 2010, it was estimated that the net lifetime return on higher education compared to secondary education was over €275,000 for men and €235,000 for women, which was equivalent to a rate of return of 19% per year (OECD, 2016). Naturally, as these are the expected values, some graduates will get a lower return and others a higher one. Moreover, as we show in subsequent chapters, the variability of returns from higher education has been increased.

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