When we think about smart investments, we usually think about the stock market, real estate or retirement accounts, but there is another investment that delivers consistent, lifelong returns for individuals and society alike — education.
In a new study with Angelica Rivera-Olvera, a consultant in economics at the World Bank, the department of education reform at the University of Arkansas in Fayetteville looked closely at the relationship between education and earnings in Arkansas using the latest data from the U.S. Census Bureau’s 2024 Current Population Survey. Our goal was to answer a simple but important question: How much does an extra year of school pay off in the Arkansas job market?
The answer is clear — education pays. Each additional year of schooling increases earnings by 7.7 percent, on average, in Arkansas. The most striking finding is this: Women in Arkansas see even greater benefits. For women, each extra year of education boosts earnings by 8.9 percent.
That return rises further with a university degree. Across the state, a college graduate earns 8.8 percent more than someone without a degree. For women, that figure jumps to 10.8 percent. That means that women who complete university not only close the gender earnings gap but often surpass their male counterparts when it comes to educational return on investment.
Those gains help explain why more Arkansas women are pursuing higher education. The economic incentives are strong, and the rewards are tangible. Education leads to higher earnings, greater financial stability and expanded professional opportunities. It is not just about better jobs — it is about building better lives.
Of course, going to college involves costs — tuition, time out of the workforce and other expenses — but our research shows the average long-term payoff is well worth it. The private rate of return — what individuals and their families receive — to university education in Arkansas, after accounting for all costs, is an impressive 11.5 percent. That is higher than many traditional investments and comes with personal and societal benefits. For example, an investment in a college education beats an investment in the stock market.
In dollar terms, the average college degree in Arkansas adds about $1.1 million in lifetime earnings. That is not just a win for individuals; it is a boost to the state’s economy. A well-educated workforce drives innovation, attracts new businesses and raises productivity across the board.
Interestingly, in nearly every comparison, women experience equal or greater returns than men for the same levels of education. That finding reflects national and global trends and confirms the powerful role education plays in advancing gender equity. It also signals a tremendous opportunity for Arkansas: By investing in women’s education, we invest in the state’s economic future.
We also looked at changes in returns over time. Like much of the country, Arkansas saw a jump in returns to education during the COVID-19 pandemic. However, unlike the national trend, which has stayed high, Arkansas has seen a slight dip in recent years. Still, the long-term benefits remain strong, especially for women.
What can we do to keep those returns high and make sure more people benefit?
First, Arkansas can continue to expand access to education, especially for women and underserved communities. Scholarships, career pathways and flexible learning options help make higher education more accessible and more attainable.
Second, education policy should be guided by labor market analysis to ensure students acquire the skills most in demand. When programs are informed by real-time data on employer needs, the connection between schooling and employment outcomes is strengthened, raising the return on education for individuals and improving the efficiency of public investment.
Finally, Arkansas should continue investing in its schools and universities. The state’s funding formula is well structured, and sustained support will ensure that public education remains a smart and rewarding investment for generations to come.
In the end, education is about opportunity, growth and mobility, and in Arkansas, especially for women, it is a path to prosperity.
Harry Anthony Patrinos is head of the department of education reform and 21st Century Endowed Chair in Education Policy at the University of Arkansas in Fayetteville. He specializes in the economics of education, particularly the returns to schooling, school-based management, demand-side financing and public-private partnerships.
