'Education is best investment'
Fed chief Ben Bernanke says schooling's economic benefits are many.
Published September 25, 2007
WASHINGTON - As he travels around the country, Federal Reserve Chairman Ben Bernanke is sometimes hit up for investment advice. His answer? It's not stocks or bonds, but rather education.
"Education is the best investment," Bernanke said in a speech Monday. It benefits not only workers but also the economy in a time of continuing competitive strain.
It was a fitting response for Bernanke - a well-respected economist who spent most of his professional life as a teacher and is married to one. "Education - lifelong education for everyone - from toddlers to workers well advanced in their careers - is indeed an excellent investment for individuals and society as a whole," he said.
Economists have long recognized that the skills of the work force are an important source of economic growth, the Fed chairman said.
Although the United States has been a leader in expanding educational opportunities, it also has grappled for years with such challenges as school dropout rates, particularly for minority and immigrant youths.
Added Bernanke, who took over the Fed in February 2006, succeeding longtime chairman Alan Greenspan: "Upgrading skills through continuing education and training outside the job is also important, particularly in an environment in which workers can face displacement from international competition or technological advance."
Bernanke, who spent 17 years teaching economics at Princeton University, made his comments in a speech to an education and work force summit held in Washington by the U.S. Chamber of Commerce.
Sharpening both the nation's educational system as well as the skills of its work force should help the country deal with future challenges, including the retirement of the baby boom generation, advancing technology and increasing globalization, he said.
Education can have other benefits. Research suggests that "more highly educated individuals are happier on average, make better personal financial decisions, suffer fewer spells of unemployment and enjoy better health," Bernanke said.
In his speech, he did not provide any hints about the Fed's next move on interest rates. He also didn't discuss the state of the economy.
The Fed last week slashed a key interest rate by a half percentage point in a move to ensure that a housing meltdown and credit crunch don't throw the economy into recession. It was the first time in four years the Fed had lowered this rate.
[Last modified September 25, 2007, 00:14:12]
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