Measuring education services using lifetime incomes

This paper estimates the nominal value of education output by adapting the Jorgenson Fraumeni lifetime income approach, such that enrollments by education type are multiplied by the amount by which lifetime earnings change with additional qualifications, taking account of the impact of experience on earnings. The model is estimated using data for the UK covering the time period 1993 to 2018 under a range of assumptions. Next, the treatment of education services in national accounts is reviewed, and the paper argues that education services could be treated as an intangible asset and the acquisition of schooling knowledge assets included in saving and net investment. Finally, the paper discusses modifications required to adjust for international students who pay for the cost of their tuition.