Redefining the system of evaluation for investment in education

Abstract

Connection between the education system and economic and social development is indirect, and it can be seen through the interaction of education and technological progress and their impact on future trends, the social and economic development, and thus the process of transition economies in the developing countries. Investment in education is because of very important and requires governments of countries in transition but also of individuals to different approaches to evaluating their investment in this area. Profitability of investment in education can be discussed from the aspect an individual and from the aspect of society. With the internal profitability rate as the most representative criteria for calculating profitability of investment in education from the aspect of an individual, the basic idea is to determine the discount rate that will equalize the current value of all the future benefits from education with the current value of all education costs. Calculating of the social rate of profitability of investment in education from the social aspects has an aim to determine an optimal level of the social expenditures designed for education and their disposition on the certain levels of education. Both profitability rates quantify the efficiency of investment in education but they don't underestimate all the effects being brought by education , both the ones that can be financially expressed, so in that case , besides quantitative there must be brought qualitative estimations of the efficiency of investment in education, too.