Smart Investments for Iowa
Investing in Education Will Build a Stronger Iowa Economy
IPP's Fisher: Also Good for State Budgets in the Long Run

FOR IMMEDIATE RELEASE THURSDAY, August 22, 2013

View full report online or as 14-page PDF


IOWA CITY, Iowa (Aug. 22, 2013) — The best way for Iowa to grow its economy is by investing in a well-educated workforce, according to a new paper published by the Economic Policy Institute (EPI) for the Economic Analysis and Research Network (EARN).

In “A Well Educated Workforce is Key to State Prosperity,” Noah Berger, president of the Massachusetts Budget and Policy Center, and Peter Fisher, research director at the Iowa Policy Project (IPP), find a strong link between the educational attainment of state workforces and both productivity and median wages.

Expanding access to high quality education will create more economic opportunity for Iowa residents and do more to strengthen Iowa’s overall economy than anything else, Fisher said.

“Investing in education is also good for state budgets in the long run,” Fisher said. “Highly educated workers have higher incomes and thus pay more in taxes and rely less on state assistance.”

IPP is a member of EARN, a network of 61 state and local economic think tanks and 25 national partners founded by EPI and several other state and national groups.

Fisher said ways to increase the educational attainment of Iowa’s population include working to slow the growth of college tuition, and increasing financial aid.

Meanwhile, strategies such as cutting taxes to lure employers and capture private investments from other states are shortsighted, and promote a race to the bottom that undermines states’ ability to invest in and attract an educated workforce.

“We find no clear relationship between a state’s tax rates and its wages,” Fisher noted.

The Iowa Policy Project is a nonpartisan, nonprofit research organization in Iowa City that focuses on family prosperity trends, budget and tax issues, and energy and environmental policy. Reports are at www.iowapolicyproject.org, and IPP staffers provide perspectives on timely issues on the Iowa Policy Points blog, www.iowapolicypoints.org.