Measurement of Rate of Return in Education. Research Directions

There is a need to measure the efficiency and effectiveness of higher education in its various aspects, including in the area of non-monetary benefits of higher education. Education relates to wider economic and social effects and human welfare depends partly on earnings but also on non-monetary outcomes that all trace back to education in various ways. There exist positive relationships between education and health, the health of family members, the schooling of one’s children, life choices made, fertility choices and infant mortality. Increasing the education level also has a positive effect on the environment and has a strong influence on crime reduction. Article is a review of the impact of intangible benefits of higher education, particularly non-monetary private and social rates of return on investment in education. The traditional, Humboldtian type of the University faces serious criticism. Main weaknesses of such concept includes outdated governance style with fragmented structure and management, insulated, extensive state dependency, overregulated legal status, heavily underfunded budget; uniformity and egalitarianism confronted with strong hierarchical human resource structure. It is accompanied with mono-disciplinary specialization; traditional learners approach; ineffective or lack of knowledge transfer; accompanied with little world-class excellence. The definition of the Universities new role of in the society is based on the triple helix concept. It covers Education; with the priority activity in higher level education. The task is to provide trained people for the needs of contemporary society. The second helix is Research. The role of the university is the knowledge generation, especially on the frontier research. This gives or extends limits of the conceptual or technological basis for new products and services. It works, provided functional processes of knowledge transfer via agencies or people are available and are efficiently working. Third Mission of the university is Society. The traditional role of the university covers regional support inclusive business advice for politics. It is ever growing, grand challenge. The answer of the European commission to the need of the university modernization is the policy promoting three main reforms. First of them is under way for some time now. It consists of radical curricular reform symbolized with the Bologna Process. The second is the governance reform. It promotes transformation from the traditional, Humboldt type of the university towards new, entrepreneurial concept of the university. The governance reform is essential for new challenges formulated for university system. The implementation of the entrepreneurial concept of the university is impossible with current funding system. The funding reform is designed to enable change from input oriented towards output oriented budgeting. The latter needs adequate measurement system of the output in all three activity fields. Only research has more or less functioning assessment indicators. The education and third mission results indicators need to be designed.