Turn "study or go to work" into a sum: set the three years of wages you would earn by going to work now against the yearly income gap that more schooling would bring over the decades after

Going to work now earns you several years of wages sooner, but that money is received only once. Staying in school means earning a bit more than people who did not, every year after, for thirty or forty years running. So put the two sums side by side. In urban China, one more year of school was associated with about 4.0% to 10.2% more income a year, but those figures are from before 2001. They only give a rough scale.

Cost

No money. Sit down and run the sum once. About half an hour.

Benefit

This is an estimate for urban China from 1988 to 2001. How much more income one more year of school brings is called the return to education. The original text says it "rose sharply from 4.0% per year of schooling in 1988 to 10.2% in 2001." The rise was mainly after 1992. What it reflects is the widening of the extra pay of people who reached university over people who did not (the higher-education wage premium). This is a China-specific scale you can use when you turn "one more year of school" into a gap in yearly income. The global average is in item 7 of this section (the global average return to one more year of education)

Notes

Before you run the sum, first take off the tuition waivers and grants in item 4 of this section (vocational-school tuition and grants). There is also the account in item 2 of this section (one more year of education and mortality). The data stop at 2001 and cover only urban areas. They cannot be used directly as today's figures. The same is true of the global average of 9% in item 7 of this section. What is given here is a method, not an answer: run this way, the conclusion differs from person to person. Where tuition is high, the subject does not match the job, and the years of study are long, the sum may really come out not worth it. That only shows that this particular course is not worth it. It does not show that schooling is useless. A few things do not fit in the formula but do exist: legal education thresholds, in item 5 of this section (linked admission and separate exams in vocational education); resistance to being replaced, in item 10 (pick skills that resist automation); and whether you can change industry. The beneficiary is you

Sources · 1

1. Zhang J, Zhao Y, Park A, Song X (2005). Economic returns to schooling in urban China, 1988 to 2001. Journal of Comparative Economics, 33(4), 730-752. doi.org/10.1016/j.jce.2005.05.008