Recent research reported in the SMH suggests that the IQ test score acheived by a five-year-old can predict if they will complete high school and go on to university, which is a signficant factor affecting earning potential. Michael Keane, professor of economics at the University of Technology, Sydney, reports that "If you know the kid's IQ test scores at age five, that is a better predictor [of future earning capacity] than the parents' IQ or income,". This suggests that good-quality preschoolling can be more cost-effective than later attempts to boost intellectual performance, and casts doubt on whether spending money on private schools for primary and secondary schooling is an efficient allocation of your financial resources if good-quality free education is available.
Personally, I have DS1 and DS2 booked on the waiting list of a good private school (Sydney Grammar) for their secondary years, but they may not end up going there. At $20,826pa for school fees (non-boarding) they will only be attending if I win the lottery, or, more realistically, if they score well enough on a scholarship test to obtain a half or full-scholarship. I'm sure that there are some "networking" benefits of attending such a school (if they end up pursuing a business/finance career in Sydney), but I imagine the effect would be marginal in the long run - once you complete a university degree which high school you attended no longer seems very significant, and once you have several years work experience where you obtained your undergraduate degree isn't very important either (for most people - it may matter if your are applying for a job as a merchant banker). For most private schools there would be lots of "old boys" who went on to mundane careers in middle management, which hardly justifies spending $125,000 on private school fees. Then again, I'm probably biased by the fact that neither of my sons is very likely to be selected for one of the 18 full scholarships that is available each year.
Copyright Enough Wealth 2007
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