Returns from education, Microeconomics

Assignment Help:

Returns from Education

Monetary benefits from education are called as returns. Such benefits accruing to an individual are called as private returns. The sum of all private returns together with the taxes on income paid by individuals is known as social returns. In the context of education, costs for various courses are first calculated. Returns to these courses over a life time are then computed based on factors like total years of working (i.e. working span), expected or average returns or earnings, etc.

The life time returns are then calculated for unit costs or per unit of expenditure. Two techniques are followed to calculate rates of return to different levels and forms of education. They are: the Net Present Value (NPV) technique and the Internal Rate of Return (IRR) technique. There have been a large number of studies using particularly the IRR technique to compute the economic value of a variety of educational courses. A comprehensive review of these studies was made by Psacharopoulos and Hinchcliffe in 1973 and again updated in 1985. As per this international update on findings of studies on rates of return from sixty countries, the following inferences have been drawn.

a) Social rates of return are lower than private rates of return;
b) Social rates to primary education are higher than those to secondary and higher education;
c) Social rates for developing countries are higher than those for developed countries;
d) Social rates on investments in education are higher than social rates on investment in physical capital (industry, trade, etc) for developing countries.


Related Discussions:- Returns from education

What is high-powered money, What is "high-powered money"?  The "high-po...

What is "high-powered money"?  The "high-powered money" is the similar as monetary base, which is defined, at the minimum, as the sum of the currency in circulation (banknotes

Change in the price of a related good, Change in the price of a related goo...

Change in the price of a related good: Goods relate to each other in two ways. Goods are either complements or substitutes. Complementary goods are goods with joint demand. The

Supply, plese give me supply assigement

plese give me supply assigement

What is use of analytical tools in the modern economics, What is use of ana...

What is use of analytical tools in the modern economics? Analytical Tools: Modern economics also gives different powerful analytical tools which are usually specified by geo

Theory of customs union, THEORY OF CUSTOMS UNION: A customs union is a...

THEORY OF CUSTOMS UNION: A customs union is an association of two or more countries to encourage trade. The countries making such an arrangement agree to eliminate tariffs and

Linear demand curves, Below are three questions. WRITE A BRIEF NOTE OF EXPL...

Below are three questions. WRITE A BRIEF NOTE OF EXPLANATION IN ANSWER TO EACH PART OF EACH QUESTION. The marks awarded will depend on the quality of the reasoning exhibited and th

Determine the increase in money supply, Is it true to say that inflation ca...

Is it true to say that inflation can only sustain with the increase in money supply?  Inflation can only be sustained if there is a persistent enhance in money supply. If there

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd