- The growth of capital
Each of these areas has played a part in dramatically increasing the "rate of return of education," as he put it in his address to members of the Milken Institute Associates. This growing gap in pay between those who receive a higher education and those who don't can be seen in developed and developing countries alike.
In China and India, for example, education has helped lift millions of people out of poverty as they now compete for decent-wage jobs with workers from around the world.
"There is a good reason why China is investing so much in education," Becker said.
This development has led to two opposing trends, he added. First, the level of inequality around the world has declined, thanks mainly to China and India's growing economies. At the same time, inequality within individual countries has increased, with the educated raising their standards of living while many uneducated and unskilled workers remain in poverty.
The challenge in the United States, he said, is how can we increase the number of young people going to college? He suggested establishing policies that would support these proven methods:
- Better student loan programs
- Head Start
- School vouchers
- More stable families
Becker is the University Professor of Economics and Sociology at the University of Chicago. He was awarded the Nobel Prize in Economic Sciences in 1992 for extending the domain of microeconomic analysis to a wide range of human behaviors and interactions, including non-market behavior. His current research focuses on habits and addictions, the formation of preferences, human capital and population growth.
To join the Milken Institute Associates, please contact Mindy Silverstein at (310) 570-4634, or by e-mail at msilverstein @milkeninstitute.org.