California's Fiscal Returns on Investments in Higher Education by Jon Stiles, Michael Hout, and Henry Brady

The ongoing budget crisis in California raises many questions about the most effective ways to allocate resources in ways which sustain future investments. In this paper, we consider two questions: What are the benefits to the state for investing in higher education? And, how do current educational investments create an environment which supports future needs? Drawing on current and historic data on returns to education for individuals, income tax regimes, state investments in higher education, progress and completion patterns, and mechanisms which translate individual impacts into date revenues and expenditures, we conclude that the benefits of higher education extend well beyond the direct payoff for students and include substantial gains to the state.