Economics Class Lecture Notes

Cost of Education

Marginal Cost:
- Associate's degree at Paradise Valley Community College: $10,000 - $20,000
- Opportunity costs must be considered

Associate's Degree:
- Adds $7,000 per year over a high school diploma
- Lifetime increase: approx. $300,000
Bachelor's Degree:
- Adds an additional $750,000 over an associate's degree
College Premium:
- Higher than ever before
- Education generally leads to higher lifetime earnings

Definition:
- Human capital includes knowledge, experience, and skills
- Education increases human capital by teaching valuable skills
Evidence in Majors:
- Best starting pay: Engineering, Computer Science, Economics
- Mid-career salaries are higher than average
- Lower start salaries: Communications, Liberal Arts, Sociology, Psychology
- Advanced degrees often needed for non-technical fields

Key Points:
- College signals productivity and conscientiousness to employers
- Hard to fake degree completion
Variations in Major Difficulty:
- Socioloy and Psychology seen as easier
- Economics and Engineering require more rigor
Income Mystery:
- Economics graduates earn more than Psychology graduates
Education Premium:
- "Sheepskin effect" indicates a significant income jump with a degree completion
- 60% of the premium comes with degree attainment

Reputation and Success:
- Harvard graduates achieve high success rates
- Offers high signaling value
Access to Education:
- Harvard courses could be attended without official admission
- Harvard degree holds much value beyond the education itself

School Worth:
- Education is worth the investment; signaling model supports degree completion
Becoming Conscientious:
- Work on diligence and conscientiousness
Utilizing Resources:
- Engage with college resources and support systems
- Learn to navigate and utilize the system effectively