Economists have been investigating these questions since the late 1950s. If education is an investment, economists reasoned, we should be able to calculate a rate of return on that investment. The rate of return to the individual would be some measure of increased income due to the purchase of more education, minus the cost of acquiring it.
Economists are interested in the rate of return for a couple of reasons.
First, they wanted to measure how important it is for people to be educated and what level of education is optimal. More recently, calculations of returns to education have received increased attention for another reason. A generation or more ago, one of the most often asked questions about the value of education was how much a high school degree mattered. Today the need for a high school degree is almost taken for granted. The issue now is how much college matters.