What is the Learning Effect?

The learning effect is an increase in productivity and wages for people who attend colleges and universities. Economists theorize that going to college can substantially increase a person's lifetime earnings, offsetting the investment necessary to pay for college and the costs of living while in school. A related theory, the screening effect, suggests that employers find college graduates more impressive and are consequently more likely to hire them and pay them well, thus contributing to the higher earnings for college graduates.

Substantial documentation illustrates that people who attend colleges and universities make more, on average, than people who do not. Higher levels of educational attainment translate into even more money made over a lifetime. This supports the claims made by advocates of the learning effect. Attending college for an associate or bachelor's degree can allow people to access more job opportunities, and many high school students are encouraged to so with the goal of making them more successful in life.

According to the theories behind the learning effect, people who go to college will be more productive in the long term. They often pick up productivity skills in college along with useful skills they can apply to employment in a wide variety of sectors. College encourages working independently, prioritizing time responsibly, and organizing tasks in a productive and efficient way. People will carry this with them into employment, potentially making them more valuable as employees. Higher degrees also tend to attract higher wages, especially in the case of professional qualifications like medical and legal training.

Advocates of the screening effect argue that college makes people more employable because they are more appealing applicants. Rather than operating through learning and experience in college like the learning effect, it takes effect when people are applying for jobs. Employers will choose a college graduate over someone with a high school degree, and will gravitate towards people with advanced degrees if they have a choice. These economists suggest employer screening of employees explains the better compensation and productivity levels people associate with college graduates.

A mixture of both screening and learning effect probably comes into play in most situations. The earning differential between college and high school graduates varies around the world, but can be striking. College graduates also tend to be more likely to access jobs with benefits like retirement accounts, health care, and paid vacation. In addition to making more money, they are in a better position for retirement and have more opportunities while at work, including employer-funded continuing education and chances to travel and network with other people in their industries.