Consider the social rates of return provided in Table 13.3. The social rates of return for graduate degrees appear to be very low (or negative). Based on these estimates, an analyst recommends that government support for graduate education be reduced. Discuss the merits of this recommendation. Is there any reason to think the “true” social rate of return to graduate education might be higher or lower than reported?

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TABLE 13.3 Private and Social Internal Rates of Return to Education by Sex, Level of Education, and Selected Undergraduate Fields of Study, 2000 Private Rates of Return (%) Social Rates of Return (%) Women Women 14.1 9.2 2.1 4.1 Type of Degree Undergraduate Master's PhD Men 11.5 2.9 less than 0 9 9 9 18.1 Education Engineering Commerce Health Sciences Source: Moussaly-Sergieh and Vaillancourt (2009), Table 2. 5 3.6 14 14.2 19.3 17.7 Men 8.6 less than 0 less than 0 8.2 4.7 8.2 9.7 11.9 5.9 16.4 7.6