If You're So Smart...
The Rich Nations Mystery
Which "Wood" You Choose?
If You're So Smart-Part 2
Investigate the relationship between education and income.
Go to the Bureau of Labor Statistics to answer these questions.
What is the average weekly earnings of:
What level of education do you want?
Why do you think that people are willing to go to school for so many years?
Look at this list of occupations with the highest earnings, regardless of the training required. Go to America's Career InfoNet.
What did you notice about the education requirements of these high-paying occupations?
Did more education seem to correlate with more income?
About Supply & Demand
The number of people with science degrees who are willing and able to work at current market wages is the supply. Higher wages will attract more people to the field; lower wages will encourage people to choose other options.
The number of people with science degrees that employers are willing and able to pay current market wages is the demand. At higher wages employers will demand fewer people with science degrees. At lower wages employers will demand more people with science degrees.
Does higher education guarantee a job or high income?
Visit Forbes and Read the article by Richard Vedder
Think about this
1. While it is true that there is a strong correlation between higher education and having a larger income, the increase in income comes at high and increasing cost, is it worth it?
2. Was he encouraging more people to come into the field? Was he hoping to increase the supply of people with science degrees?
3. Dr. Hale seems to be saying that at the market price, the quantity demanded of people with science degrees is less than the quantity supplied of people who want those jobs. How do you think that would affect wages?
4. Based on this article, would you think that, when a job is announced in this field, many applicants would apply or few would apply?
The following statements are true:
So, we see that although people with higher education and skills tend to earn more than people with less education and skills, higher education by itself doesn't guarantee high income. What was the problem in this case? It seems that at current salaries, the number of people willing and able to be astronomers is higher than the number astronomers of astronomers demanded.
Go to America's Career InfoNet site again and read the occupation report for astronomers.
What did you learn about the current wages and demand for astronomers?
What did you learn about the predicted wages and demand for astronomers?
What would you expect to happen in fields where demand is increasing?
What occupations are increasing in demand?
Now look at the at the fastest growing occupations one more time.
Why do you think that demand is increasing in computer-related fields?
Based on the information you’ve seen, which seems to be true? Wages are likely to go up most in fields with:
Why doesn't everyone take a job as a computer engineer, physician or one of the other higher-paying occupations?
Since the skills one gets from education make such a difference in income, why doesn't everyone get the skills?
To get an education, a person must be willing and able to pay the costs.
List as many of the costs of getting more education and training that you can think of.
Did you think of all of these? Did you think of more?
Did you think of others?
Did you think of opportunity costs? Opportunity costs are things that one gives up as a result of having chosen something else. Can you think of any opportunity costs you'd have to pay in order to get advanced education?
Whatever income one might have earned, or the fun one might have had, or the sports one might have participated in, could be some of the opportunity costs of:
What other things did you think of?
*Even those who can afford some education programs often can't get in because of the limited number of openings. At some physical therapy schools, for instance, there are more than 1,000 applications for 40 openings. Competition is keen.
These are the costs one pays to make an investment in one's human capital.
One makes this investment in order to do work one enjoys, avoid work one doesn't enjoy, and improve one's lifetime earnings.
So far we know that:
1. Income is determined by the quality of skills one has and the supply and demand for those skills.
2. Education is a means of developing skills and knowledge. If the demand for certain skills is low and at current salaries there is a surplus of people with those skills, salaries will probably not be rising.
Visit this site to view "Occupations With The Largest Projected Numerical Growth 2008-2018."
Demand for people with these skills is expected to increase. Think about the investment in human capital. Think about the supply of people with the skills to do those jobs. Which ones do you think will have rising salaries?
Once you've thought these questions over, go on to Part 3