Steven Yamarik writes,

Labour economists have estimated the micro-Mincerian wage equation using different time periods, samples, and econometric techniques. For the US, the private return to schooling ranges from 4 %to 16% with a consensus estimate is around 10%.

The recent construction of state-level physical and human capital stock data has provided the opportunity to apply the macro-Mincerian model to US states. Chad Turner and his co-authors estimated a social return of 12% to 15%, while I estimated a slightly lower social return of 9% to 13%. The closeness of the estimates of the social return to the private return suggests that US schooling generates little to no external return.

For economics teachers, I cannot recommend this article strongly enough. It demonstrates how economists show that something that is good for the public (education) is not necessarily a public good (something that taxpayers ought to subsidize). It would be worth spending 45 minutes explaining this article to a freshman econ class.

Thanks to economics teacher Professor Mark Thoma for the pointer.

Update: Thoma points to some counter-arguments by Richard H. Serlin here and here.