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

Role of marginal propensity to consume in accounting for gro, how can we br...

how can we bring in the marginal propensity to consume

SOCIAL WELFARE FUNCTIONS, VIVIDLY EXPLAIN WHAT THE RAWLSIAN SOCIAL WELFARE ...

VIVIDLY EXPLAIN WHAT THE RAWLSIAN SOCIAL WELFARE ENTAILS

Achievements of bretton woods instittutions, ACHIEVEMENTS OF BRETTON WOODS ...

ACHIEVEMENTS OF BRETTON WOODS INSTITTUTIONS: Some of the important achievements of the BW Institutions can be summarised as follows: 1) International reserves have increa

Educational financing, Normal 0 false false false EN-IN...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Market equilibrium, Market equilibrium happens where supply equals demand (...

Market equilibrium happens where supply equals demand (supply curve intersects demand curve).   An equilibrium implies that there is no force that will cause further changes in pri

Market economy, what is market economy and how it solve the central problem...

what is market economy and how it solve the central problem

Derivation of ordinary demand function, Derivation Of Ordinary Demand Funct...

Derivation Of Ordinary Demand Function: Suppose,   and q 1  = (Q 1 1 , Q 2 1 ,..., Q n 1 )T. Let M0 be the money income and p 0 q 0  = M 0  and p 0 q 0 ≥ p 0 q 1 , where p

Oppurtunity cost, 1. Assume that Malaysia can produce cencaluk at 25 bottle...

1. Assume that Malaysia can produce cencaluk at 25 bottles per worker and belacan at RM5 per worker. Assume that Indonesia can produce 10 bottles of cencaluk per worker and 20 pack

Parallel economy, PARALLEL ECONOMY: What is in popular parlance known ...

PARALLEL ECONOMY: What is in popular parlance known as black money, and is, misleadingly called the 'parallel' economy, (as it operates very much with and within the legal, fo

Exchange rate system, EXCHANGE RATE SYSTEM: It is interesting to look ...

EXCHANGE RATE SYSTEM: It is interesting to look at a case study of a country like India for several reasons: first it is a small country in terms of imports and exports as a p

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