McKinsey (a few years ago):
A persistent gap in academic achievement between children in the United States and their counterparts in other countries deprived the US economy of as much as $2.3 trillion in economic output in 2008, McKinsey research finds. Moreover, each of the long-standing achievement gaps among US students of differing ethnic origins, income levels, and school systems represents hundreds of billions of dollars in unrealized economic gains. Together, these disturbing gaps underscore the staggering economic and social cost of underutilized human potential. Yet they also create room for hope by suggesting that the widespread application of best practices could secure a better, more equitable education for the country’s children—along with substantial economic gains.
According to the paper (with the unassuming title “Aggregate Supply in the United States: Recent Developments and Implications for the Conduct of Monetary Policy”), our seemingly endless slump has done long-term damage through multiple channels. The long-term unemployed eventually come to be seen as unemployable; business investment lags thanks to weak sales; new businesses don’t get started; and existing businesses skimp on research and development.
What’s more, the authors — one of whom is the Federal Reserve Board’s director of research and statistics, so we’re not talking about obscure academics — put a number to these effects, and it’s terrifying. They suggest that economic weakness has already reduced America’s economic potential by around 7 percent, which means that it makes us poorer to the tune of more than $1 trillion a year. And we’re not talking about just one year’s losses, we’re talking about long-term damage: $1 trillion a year for multiple years.
Are these complimentary, contradictory, or what? Well... more McKinsey
>We made three noteworthy assumptions: test scores are the best available measure of educational achievement; educational achievement and attainment (including milestones such as graduation rates) are key drivers in hiring and are positively correlated with earnings; and labor markets will hire available workers with higher skills and education. While these assumptions admittedly simplify the socioeconomic complexities and uncertainties, they allowed us to draw meaningful conclusions about the economic impact of educational gaps in the United States.
Oh, I see... yes, if you assume higher paying jobs will magically appear for all educated workers, that's... quite an assumption.