Returns to investment in education: A global update
AbstractThe author updates compilations of rate of return estimates to investment in education published since 1985 - and discusses methodological issues surrounding those estimates. Some key patterns: among the three main levels of education, primary education continues to exhibit the highest social profitability in all world regions - private returns are considerably higher than social returns because of the public subsidization of education; the degree of public subsidy increases with the level of education, which is regressive; social and private returns at all levels generally decline by the level of a country's per capita income; overall, the returns to female education are higher than those to male education, but at individual levels of education the pattern is more mixed; the returns to the academic secondary school track are higher than the vocational track - since unit cost of vocational education is much higher; and the returns for those who work in the private (competitive) sector of the economy are higher than in the public (noncompetitive) sector. And the returns in the self-employment (unregulated) sector of the economy are higher than in the dependent employment sector. Controversies in the literature are discussed in the light of the new evidence. The undisputable and universal positive correlation between education and earnings can be interpreted in many ways. The causation issue on whether education really affects earnings can be answered only with experimental data generated by randomly exposing different people to various amounts of education. Given the fact that moral and pragmatic considerations prevent the generation of such pure data, researchers have to make do with indirect inferences or natural experiments. Some have been attempted. The author looks at the research on overeducation or surplus schooling. The conclusions reinforce earlier patterns. They confirm that primary education continues to be the number one investment priority in developing
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal World Development.
Volume (Year): 22 (1994)
Issue (Month): 9 (September)
Contact details of provider:
Web page: http://www.elsevier.com/locate/worlddev
Other versions of this item:
- Psacharopoulos, George, 1993. "Returns to investment in education : a global update," Policy Research Working Paper Series 1067, The World Bank.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading lists or Wikipedia pages:
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.