State legislators looking for the best returns on budget investments should focus their efforts on education spending, according to a new report issued by the Economic Policy Institute.

The study found that in states where higher percentages of the workforce have attained bachelor’s degrees, such as Massachusetts, Connecticut, Maryland and New Jersey, workers have much higher average hourly wages than states with fewer college graduates, such as Nevada, Arkansas, Louisiana and Mississippi.

“It becomes very clear, when you look at the higher-wage states, they have one thing in common: They have a well-educated workforce,” said Noah Berger, the president of the Massachusetts Budget and Policy Center and one of the study’s lead authors.

The report explains that in our modern economy, employers who pay good wages generally need well-trained and better-educated workers. By improving the overall level of education of its workforce, a state can increase the productivity of firms, which allows the firms to increase both profits and wages. As obvious as this fact is, education often receives less attention in state economic policy discussions than do taxes, regulations and business incentives.

Washington Post, Aug. 23