Counting What Counts: Why Social Accounting MATTERS

In The News

By Elizabeth Castillo

Philanthropy and public policy have yet to catch up with this logic of creating new options rather than minimizing costs. For example, a recent report by the Arizona Chamber Foundation (ACF) argues against large-scale subsidizing of in-state college education, stating that “such a proposal would result in fiscal losses with limited economic benefits.”6 However, its methodology neglects historical context. From 2008 to 2018, Arizona experienced the largest funding cuts to higher education in the nation (a 55.7 percent inflation-adjusted decline),7 disproportionately affecting students of color.8Further, the report does not account for the many benefits of educational attainment that would offset costs.9 At the individual level, these include the fact that college graduates tend to be healthier, rely less on emergency room services and public assistance, and have higher rates of home ownership, interest-earning assets, and private pension–plan investments than people with less or no access to higher education and the benefits and privileges it endows.10 At the macro level, states with more college graduates enjoy higher state credit scores, lower traffic fatality rates, higher rates of voter participation, more parent involvement in schools, reduced energy consumption, more federal aid, and lower infant mortality rates,11 as well as increased levels of diversity and knowledge transfer.12Beyond failing to account for these types of returns in their calculations, ACF’s time horizons are similarly problematic: ACF’s methodology uses a ten-year time span (a standard time frame for cost-benefit analyses), but many higher education benefits extend decades beyond that.13

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