Final answer:
The expected private return of education increases at a faster rate compared to the private cost as years of schooling increase, as evidenced by the increased median weekly earnings and the rate of return to education.
Step-by-step explanation:
When considering the private returns and private costs of education, several studies indicate that as the number of years of schooling completed increases, the expected private return of education usually increases at a rate that is faster than the increase in private cost. Specifically, the rate of return to a college education can be around 10-15%, and this rate surpasses typical investments such as Treasury bonds or savings accounts. Moreover, with each additional year of education, wages tend to increase by about 9%, which signifies the marginal private benefit (MPB) related to higher earnings. However, the marginal private cost (MPC) of providing education also increases, due to reasons such as higher wages for teachers, the need for more facilities, and the necessary qualifications for teaching higher levels of education.
Though both the costs and returns of education increase with more years of schooling, the returns typically increase at a faster pace, which is demonstrated through higher median weekly earnings for individuals with more education, as reported by the U.S. Bureau of Labor Statistics. Additionally, the relationship between resources committed to education and the gains from such investment indicates that when fewer resources have been allocated, the relative gains from more educational investment can be quite substantial. Yet as the level of investment becomes larger, the additional gains tend to diminish proportionally.