Economics of Education

Abstract

During the past twenty-five years economists have made a substantial contribution to thinking about problems of resource allocation to education and of returns to education. The study of the statistics of costs and expenditures on education, which had been neglected, has advanced. Economists have contributed to three main lines of debate: the relationship of expenditure on education to economic growth, individual and social returns to education, and the role of education in meeting economic needs. The debate has not been conclusive. During the period of rapid economic growth up to 1970 it served to promote increased spending, with changes in its distribution. Since 1970 with slower growth, greater emphasis is being given to problems of democratisation and efficiency in national expenditure patterns. Divergencies in the character of needs for education as between developed and developing countries have raised new problems for analysis by economists and other specialists. The issue of the role of the state in determining the balance between social expenditures and other expenditures in national economic and social development remains central. Economists still have an important contribution to make to the development of cost and finance anlysis and to studies of the efficiency of resource allocation to education in order to avoid waste.