Title: Return on investment for undergraduate education in actuarial science

Authors: Pushkar Aggarwal

Addresses: Civil Air Patrol-MD332, Upper Montgomery Composite Squadron, Germantown, MD, USA

Abstract: The students all over the world, many a times, encounter the question - Are education costs worth the degree? To answer this, Actuarial sciences major undergraduate degree at US based Ivy League University, in-state public university and out-of state public university was evaluated. Based upon interest rates (discount rate) and inflation rates, net present value of the education costs and salaries was analysed using a systems dynamics model. An actuary can expect to earn about 3.3 times more than a non-graduate in present dollar terms. After taking into account the taxation regime, the net gain is about 2.5 times. The choice of type of university in actuarial career has less significance if the person retires at 68 years of age. For an earlier retirement age, ROI is greater for in-state public university followed by Ivy League and out-of-state public university respectively, the main influencing factor being the education costs.

Keywords: undergraduate education; return on investment; ROI; actuaries; Ivy League; colleges; universities; economics; higher education; actuarial science; USA; United States; interest rates; discount rate; inflation rates; net present value; NPV; education costs; systems dynamics; modelling; taxation regime.

DOI: 10.1504/IJEED.2013.057704

International Journal of Education Economics and Development, 2013 Vol.4 No.4, pp.297 - 312

Received: 08 Dec 2012
Accepted: 13 Jun 2013
Published online: 10 May 2014 *

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