Legislators are becoming increasingly aware of the important link between higher education’s effectiveness and the state’s economic strength. They are concerned about mediocre student outcomes in the higher education system and worry about the lost wages and revenue of students who drop out of the system before getting a degree. As state budgets tighten and less state funding is available for higher education, legislators want to ensure that funds are wisely invested and wisely spent. As states plan for jobs that will drive the economy in the future, they are looking to higher education to train and produce the workforce needed for these jobs.
As a result, many states are approaching higher education policy as an investment strategy. An investment in a strong, accessible, and high- quality higher education system is an investment in the economic development of the state, with significant payoffs down the road. Indeed, a state can benefit from wise investment in its human capital. When all citizens have the opportunity and resources to succeed in
the education system, the state reaps the rewards of an educated and productive citizenry. The benefits of a highly educated citizenry include improving the state’s economy, meeting future workforce needs, and improving the state’s quality of life.
Higher education has often been primarily valued as a benefit for
the individual, but an educated citizenry significantly benefits the state. That is the fundamental principle behind the higher education- economic development linkage.