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

Diseconomics of scale, is a hotdog vendor''s stand a good example of diseco...

is a hotdog vendor''s stand a good example of diseconomics of sale?

Slutsky theorm, explain slutsky theorm with graphical representation

explain slutsky theorm with graphical representation

Williamson''s model, williomson''s model of managerial discretion

williomson''s model of managerial discretion

Definition of labour force, Q. Definition of labour force? Labour Force...

Q. Definition of labour force? Labour Force:Total population of working-age people who are willing and able to work and who thus have ‘entered' labour market. Labour force incl

Natural research, Biochemistry is regarded a dull topic. Not many learners ...

Biochemistry is regarded a dull topic. Not many learners like to research it in school since it includes a thorough comprehension of issue and clinical changes in the framework, fr

Employer’s estimates of future manpower requirements, Employer’s Estimates ...

Employer’s Estimates of Future Manpower Requirements One of the parameters of demand for employment in a firm or a factory or an establishment is the level of capital investme

Opportunity cost, what are the concept of opportunity cost

what are the concept of opportunity cost

Sustained increases in material productivity of human labor, Why were there...

Why were there not any sustained increases in material productivity of human labor back before 1500? Since improved technology quickly ran aground on resource scarcity. As huma

How many wokers should the firm hire(need help now!!plzz), Labor Total Out...

Labor Total Output 1 30 2 50 3 60 4 75 5 80 a) If the price of the firm’s output is $12 per unit and the wage rate is $100 per worker, how many workers should the firm choose to

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