Valuing the Impacts of Adult Learning

1. Valuing the Impacts of Adult Learning Daniel Fujiwara London School of Economics 11 October 2012

2. Introduction.what is value and why is it important? • Value is subjective – it differs for each person. • And it ties in with the ultimate intrinsic good – ‘wellbeing’ • The value of adult learning should tell us something about how much adult learning improves our lives and in that sense makes us better-off. • A monetary value is the equivalent amount of money required to keep wellbeing constant. • This is useful information because it helps us to: • Choose between different options (relative appraisal). • Assess the merit of a single option – do benefits exceed costs? (absolute appraisal).

3. The value of adult learning: Methods • Adult learning may impact positively on people’s lives in a number of ways, eg • Better/new skills; • More friends, • Improved confidence, etc • This will be valuable to participants and we could measure this value in a number of ways: 1. Ask them their WTP (contingent valuation) 2. Look at their behaviour (revealed preferences) 3. Analyse their wellbeing

4. The value of adult learning: Preference approaches • Very little research on the monetary value of adult learning –one or two contingent valuation studies. • Preferences can be misleading. • Preference-based valuation methods require that people have a set of well-informed underlying preferences for adult learning and that they can report their values accurately. • This is often not the case.

5. Policy intervention Money Wellbeing The value of adult learning: Wellbeing • We look to a newer approach that uses people’s actual experiences with adult learning rather than their preferences for hypothetical goods. • Wellbeing Valuation method:

6. The value of adult learning: Wellbeing Valuation - Framework • In the study we assessed and valued the impact that adult learning has on four different domains in life: (i) health (ii) employment (iii) social relationships (iv) volunteering • Indirect values of adult learning

7. The value of adult learning: Wellbeing Valuation - Advantages • There are some advantages to this approach: - we can look at a wide range of impacts for a large sample of UK population. - we do not rely on people’s preferences. - values are based on people’s actual experiences of adult learning.

8. The value of adult learning: Wellbeing Valuation - Data • Data comes from the British Household Panel Survey: nationally representative sample of 10,000+ adults (1991-present). • Adult learning: part-time course in the past year (mean 2 courses per year) (binary). • Wellbeing: Life satisfaction. • Social relationships: Satisfaction with social life. • Health: Self-reported health (Excellent – very poor). • Employment: Current employment status (binary). • Volunteering: volunteers at least once per month (binary).

9. The value of adult learning: Wellbeing Valuation – Results (1) Impact of adult learning on social relationships Impact of social relationships on wellbeing

10. The value of adult learning: Wellbeing Valuation – Results (2) • Health = higher self-reported health; less likely to report heart and blood pressure problems and alcohol/drug abuse problems. • Employment = higher likelihood of being employed; improved job expectations. • Social relationships = higher satisfaction with social life; increased frequency of meeting with people. • Volunteering = more likely to volunteer frequently

11. The value of adult learning: Wellbeing Valuation – Interpretation • Values show the amount of extra money required to keep people just as well-off (in terms of wellbeing) in absence of adult learning. • Seems that adult learning creates greatest benefits through impacts on social life. • This does not necessarily accord with willingness to pay or market price. • These values can be added but they do not represent the overall value of adult learning: • There may be other domains • There may be some negative effects too

12. The value of adult learning: Wellbeing Valuation – Caveats • Causality is an issue (as with any observational dataset), but used most robust methods given the data. • Is life satisfaction a suitable measure of wellbeing? • These are population average values (sample size wouldn’t allow more detailed analysis). • But they are values based on people’s actual experiences of adult learning. • And they provide much more information than market prices. • People may not be aware of these benefits until they try it and so these figures should complement any contingent valuation studies.

13. Future research • What other domains does adult learning impact on? • Can we experiment? • Greater focus on pre-defined outcomes. • Better assessment of causality.