Online Education’s Return Benefits and Economic Effects

Online Education’s Return Benefits and Economic Effects
Abstract
This research study compares online versus in-person education regarding salaries, employment, and career growth. Distance learning in China can assist students economically, according to the study. However, traditional degrees' economic rewards are questioned. Employers see online degrees as less credible, which is a major issue. The analysis concluded that remote education provided equivalent economic benefits to regular degrees only in high-demand majors and working mothers with limited time to pursue traditional degrees. Online degrees allows students to balance job and school.
The study suggests that the Chinese Ministry of Education address the perception gap surrounding online degrees by conducting empirical studies to generate accurate findings, investing in promotional activities to improve employer perceptions, and using a multifaceted strategy to boost online degree prestige. This strategy would certify remote education programs, define and enforce standards, and work with businesses and other stakeholders to analyze and improve public perceptions of distant education degrees. The report suggests promoting distance learning programs, maintaining high standards, and enforcing accreditation to close the perception gap. The diverse technique can assist distant education degrees gain credibility and value.
Table of Contents Introduction. 2 Problem Statement. 3 Research Question. 3 Theoretical Framework. 4 Methodological Approach. 5 Significance of the Study. 5 Online Education and Earnings. 8 Online Learning and Employment Opportunities. 11 Online Learning and Career Progression. 13 Disciplinary Differences in Online Education Outcomes. 15 Conclusion. 17 Discussion. 17 Conclusion. 22 References. 24
Introduction
Given its flexibility and affordability, online learning in higher education has seen a significant surge in popularity within China in the recent past. Data showed that almost 17 percent of learners in the Chinese higher education systems were enrolled as distance learners (Li & Wang, 2021). Consequently, the extent to which online education results in economic benefits for a learner is emerging as a topic of interest for those who are undecided about whether to pursue online education or traditional face-to-face learning (Baum, Ma, & Payea, 2013). Li (2017) notes that the cost advantages of online learning make it an ideal mechanism that individuals can leverage to obtain private benefits such as the improvement of human capital.
Notably, the explosive growth of the internet and the significant investments by various institutions towards the development of online learning curricula places it as one of the ways through which learners can enhance their knowledge and skills. Thus, a study examining online education’s return benefits and economic effects can provide learners with the empirical evidence they require to determine whether they should pursue the various opportunities created by online distance universities.
A basic background analysis shows that online education started being considered a viable alternative to traditional higher education with the emergence of the internet, with the internet offering opportunities for universities and colleges to experiment with online courses (Li, 2017). However, it was not until the mid-2000s that online education started to gain momentum, as technological advancements made it easier to deliver high-quality online courses and degrees (Li, Li. & Zhang, 2015). Since then, online education has become increasingly popular, with millions of students around the world enrolled in online courses and programs. The key driver of online education includes its ability to break down geographical barriers and expand access to education and its affordability (Li, 2018).
Problem Statement
The advent of the pandemic saw increased investment in online learning technology owing to disruptions in traditional education. With the pandemic confining people to addressing their problems through various online platforms, newer opportunities developed including online education. There is an increasing desire for learners to identify the benefits associated with an investment in higher education. Notably, not much efforts have been put to explore more insight into the developments within online learning platforms. To this end, the present study is keen to delineate the economic benefits of online education and its overall effect on the economy.
Research Question
There is a need to provide potential students with information on the benefits associated with an investment in online learning so that they can decide on whether to pursue distance learning. To investigate the benefits and costs associated with online education, the key research question that shall be investigated in the paper shall be:
To what extent does the return on investment of online education compare to traditional in-person education in terms of economic outcomes such as earnings, employment, and career advancement?
Theoretical Framework
According to the human capital theory, education is a form of investment because it requires individuals to invest their time, effort, and resources to gain the information and skills to boost their future earning potential (Gillies, 2017). When considering whether or not to put money into education, one must first determine whether or not the benefits of that investment will outweigh the expenses incurred in acquiring that degree. To keep up with the requirements of a dynamic economy, the human capital theory strongly emphasizes the significance of education. According to Cooper and Davis (2017), for individuals to maintain their competitiveness in the labor market in the face of ongoing technological improvements, they must learn new skills and knowledge. According to Li (2018), many studies have been carried out to investigate the advantages of education, and the majority of these studies have suggested that education plays a primary role in boosting individual productivity.
Notably, the Mincerian rate of returns and the internal rate of return are two of the most common methods used in measuring the benefits of private education. According to Glocker and Storck (2014), the Mincerian rate of returns is a method that calculates the return on investment in education by analyzing the correlation between a person's level of education and their level of income. It does this by beginning with the premise that education significantly contributes to one's level of wages and then evaluating the value of education based on how it affects earnings (Cukier, 1997). The internal rate of return, also known as the IRR, is an additional method that may be used to assess the rate of return on investment in education over a specific period.
Methodological Approach
To study the research question, the researcher performed a detailed examination of the available literature to produce a well-rounded and comprehensive solution. According to Newman and Gough's (2020) research, an extensive literature review is an excellent methodological approach since it will allow for an in-depth assessment of past studies, making it easier to synthesize the data from various diverse studies. An extensive literature analysis will, as a consequence, provide a complete and highly nuanced grasp of the advantages and disadvantages connected with the pursuit of remote education.
Significance of the Study
Data from the National Bureau of Statistics of China showed that the number of students receiving distance education in China accounted for 16.72 percent of all the students graduating from higher education, with Li and Wang (2021) positing that the number could be far more given that large proportion of adult learning is accomplished through distance learning. Despite the large number of students pursuing online education, scholars and researchers have dispensed minimal efforts toward analyzing the return of long-distance education. Though there exist several studies examining online education (Li & Wang, 2021; Hoxby, 2014; Castano-Munoz et al., 2016), there is still limited literature on the costs and benefits of online education (Singh et al., 2021).
There are a lot of advantages to getting an education online like offering a broader global perspective to education besides according learners the needed flexibility. Still, many concerns remain regarding the quality of the teaching and whether or not degrees earned online carry the same worth as degrees made the traditional way (Li, 2018). In addition, there are concerns over online education's potential adverse long-term effects on students and society's financial well-being (Castano-Munoz et al., 2016). Consequently, there is a need for additional research into the economic impact of online education and to establish the viability of this form of higher education as an alternative to more conventional forms.
It is crucial to study the return on investment and economic implications of online education compared to traditional in-person education because online education programs are becoming more popular and readily available. Given the proliferation of online education programs, it is essential to understand the economic impact these programs have, not only on the students who participate in them but also on the economy as a whole. The planned research will contribute to studying education economics in several ways. First, it will contribute to our understanding of the financial results of online education in comparison to traditional in-person education, such as earnings, employment, and career development. These outcomes include things like earnings, work, and career advancement. The study will provide a more comprehensive and nuanced view of the subject matter by combining previous research and undertaking unique research. Second, the research will determine the factors that impact the rate of return an investment in online education produces. This could include considerations such as the level of the program, the kind of educational establishment that is providing the program, and the particular area of study. The study can potentially help drive policy decisions and program design by identifying these aspects. This will ultimately increase online education programs' overall efficacy and economic impact. In conclusion, the study results will shed light on the broader economic implications of pursuing an online education. One possible indicator of online education's effect on the economy is the degree to which it contributes to the progress of individuals. For instance, the fact that online education helps individuals advance their careers.
Literature Review
Distance learning, also known as online learning or e-learning, refers to a mode of education in which students can learn remotely from their homes or other locations using electronic communication tools such as the Internet, video conferencing, and email (Ding, 2001). With advancements in technology, distance education has evolved and expanded in China (Ding, 2001), providing learners with an opportunity to access education from anywhere, at any time. The expansion of distance education has led to a debate about the economic value of distance learning in comparison to face-to-face education. This literature review aims to examine the economic outcome of distance education in Mainland China and compare it to that of face-to-face education. Despite the popularity of distance learning in China, there is minimal research on the economic benefits of distance learning and how it compares to face-to-face learning. Owing to the popularity of distance learning, there is a need to provide evidence of its economic benefits that can be used by students when making decisions on investments in distance learning.
Notably, several empirical studies have been carried out to explore the economic benefits of online education with varied scopes. Numerous studies have examined the influence of distance learning on enhancing the earning potential of the learner (Carnoy et al., 2012; Li, 2018; Li et al., 2009; Ni et al., 2011; Zheng, Chen, and Zhang, 2009), some focused on examining the influence of distance learning on employment opportunities (Linardopoulos, 2012; Fogle & Elliot, 2013), and others examined the relationship between distance learning and career advancement (Castano-Munoz et al., 2016; Kibelloh & Bao, 2014). Some studies have also explored the likelihood that the economic values of a given distance learning program could be associated with the discipline (Li & Wang, 2021; Dominguez & Ridley, 2001). Since the focus of the current study is to provide information on the return on investment of distance education to students, I exclude studies that discuss the economic benefits of distance learning to the economy and other stakeholders. Notably, the current study hopes to provide more information that can be reliably used to analyze the potential return on investment of distance learning. Therefore, I will focus on online education and earnings; online education and employment opportunities; online education and career opportunities; and disciplinary differences in online education outcomes.
Online Education and Earnings
Several studies have focused on various economic benefits of distance education in terms of enhancing knowledge creation and dissemination. Carnoy et al. (2012) conducted a survey study examining the earning gains reported by adult learners who enrolled in a two-year course offered by a university in Spain over six years. Compared to full-time workers, the researchers found that enrolling in a 2-year online education course resulted in positive economic benefits for the learners but the results were not translated to learners in a 3-year course. The positive earnings gains for those who completed the two-year second-cycle degree programs suggest that these programs are effective in equipping individuals with the necessary skills and knowledge to improve their employment prospects and increase their earning potential. This is an encouraging finding as it demonstrates that online distance education can provide meaningful benefits for adult learners, particularly those seeking to enhance their career opportunities. However, the lack of positive earnings gains for those who completed the three-year first-cycle degree programs raises important questions about the quality and relevance of these programs. It is possible that the longer duration of these programs, combined with the rapidly changing nature of the job market, may result in graduates having outdated or insufficient skills that are not in demand by employers.
Similarly, Li (2018) conducted a study to examine the relationship between online learning and income. The researcher analyzed data from 2003 to 2006 to investigate the impact of distance learning on the earnings of junior college and distance undergraduate learners. The study indicates that online learning can have a positive effect on the income of learners, with distance learning increasing returns by 30-40% for junior college learners and by 50-60% for distance undergraduate learners (Li, 2018). This suggests that online education can be a viable option for learners seeking to improve their financial prospects. However, the study also found that the returns from online learning were lower compared to those of face-to-face education, particularly at the undergraduate level. This suggests that while online learning can offer financial benefits to learners, it may not be as effective as traditional classroom-based education in terms of income potential. Li (2018) highlights the potential benefits of online learning for learners seeking to improve their income but also underscores the need for further research to better understand the relationship between online education and financial outcomes.
Further, Ni et al. (2011) conducted a cost-benefit analysis to investigate the economic benefits of distance education. The researchers used the Mincerian income equation, a commonly used economic model, to estimate the returns of distance education based on factors such as income, background, and work experience. The studies found that distance education can bring positive economic benefits, indicating that learners who pursued distance education could expect to see a return on their investment in terms of higher earnings (Ni et al., 2011). However, the sample data used in the study was not cross-sectional, which means that it was taken from a specific period and may not be representative of current trends. Additionally, the sample data failed to meet the assumptions of the Mincerian income equation, which could affect the accuracy of the findings. Nonetheless, the findings from the study were in line with similar studies conducted by Li et al. (2009) and Zhang, Chan, and Zhang (2009).
Table 1 below summarizes some of the economic benefits of distance learning. Notably, the benefits vary according to the targeted learning platform and the nature of courses offered.
Table 1: A summary of the economic benefits of distance learning.
Economic Benefit
Description
Affordability
Often, online courses and degrees are more cost-effective than their in-person counterparts, making education more accessible.
Reduced expenses
Reduced expenditures for commuting, housing, and campus-related fees such as textbooks and physical materials.
Upskilling and re-skilling
Individuals can learn new skills without having to leave their jobs, which can lead to wage rises or new career prospects.
Flexible work arrangements
Individuals with online learning skills may be able to negotiate more flexible job arrangements, such as remote work.
Online Learning and Employment Opportunities
Notably, the influence of online education on employment opportunities is another area of interest when examining the return on investment in distance learning. Several studies have examined the extent to which distance learning enhances employment opportunities, with most of the studies reporting a negative perception of online degrees. Linardopoulos (2012) conducted a systematic review to explore how employers perceived degrees obtained through distance learning. The researcher retrieved data from seven representative studies and found that a student who acquires their degree through distance learning may be less preferred to a peer with a traditional degree. The findings suggest that job applicants with online degrees may be at a disadvantage in terms of access to employment opportunities.
Equally, Fogle and Elliott (2013) conducted an exploratory research study to investigate the employment opportunities available to individuals with online degrees. The results of the study indicated that, in many industries, employers viewed traditional or hybrid degrees as more credible than online degrees. However, respondents who had more knowledge about distance learning tended to rate online degrees more favorably. The study also found that most employers were uncertain when it came to employing candidates with online degrees, highlighting the need for further research in this area (Fogle & Elliott, 2013). These findings suggest that while online education may be an effective way for individuals to acquire new skills and knowledge, there may be a perception gap among employers about the value and credibility of online degrees. Therefore, it is important for individuals pursuing online degrees to be aware of these perceptions and for further research to be conducted to better understand the relationship between online education and employment opportunities.
Overall, there are concerns about the effectiveness of distance learning in enhancing the employability of learners. The studies found that most employers have a less favorable view of online degrees (Linadorpoulos, 2013; Fogle & Elliott, 2013). Nonetheless, the negative relationship could be attributed to a perception gap (Fogle & Elliott, 2013). Part of the assessments stem from the variations between the two sets of lerning as summarized in table 1 below. In the table, it is notable that online learning differs from in-class learning in different aspects including location, flexibility, interaction, materials, and personalization among others. With such differences, employers can choose their preferences, which according to Castano-Munoz et al. (2016), can be highly subjective. Bearing the lack of detailed research in each learning aspect, it is impossible to gauge why an individual would prefer one form of learning over the other, hence the aspect of subjectivity.
Table 2: Summary of the differences between online and in-class learning.
Aspect
Online
In-Class
Materials
Relies ...