L. Halkiv L. Halaz M. Bihus 1Lviv Politechnic National University 2Lviv Polytechnic National University 3Ivan Franko National University of Lviv, Department of International economic and Investment Activity Purpose. The purpose of this article is to improve theoretical, methodological, and applied foundations of the study of the educational component of human potential. Design/methodology/approach. Scientific works of domestic and foreign scientists studying issues related to human potential, labor market, and education financing, as well as official statistical data that characterize these issues, formed the information, theoretical, and methodological basis of the study. To achieve this purpose, the article uses a set of scientific methods that have ensured conceptual integrity of the study, in particular: the method of theoretical generalization and the abstract method were used to systematize scientific results and formulate conclusions; the method of structural analysis was used to study education costs in terms of individual components; concentration and differentiation analysis was used to study distribution of costs of financial agents; dynamic modeling was used to build trends in the number of educational institutions, the number of students, and the total cost of education; the tabular method was used for a compact representation of quantitative indicators; the graphical method was used to visualize the results of the study, etc. Findings. The functioning of the country's education system has a decisive influence on the quality of human potential. Graduates who complete a higher education program are more likely to work in knowledgeintensive jobs and earn higher salaries. Workers with higher education are usually more likely to be formally employed and less likely to lose their jobs. Effectiveness of the education system depends on its financing. The results of the analysis of data on expenditures on education in Ukraine indicate the following patterns: most funds are allocated for educational services provided by higher education institutions, for the first stage of secondary education and primary education; private firms and corporations most often allocate their funds for post-secondary education; the share of state institutions among financial agents carrying out activities in the field of education reaches about 90 %; the maximum costs of the public sector are observed at the ISCED 0-3 educational levels; the network of institutions and the contingent of students receiving vocational, technical, and higher education are decreasing; there is a declining trend in the level of education expenditures in the Consolidated Budget expenditures. The rise in the price of educational services against the background of an unbalanced labor market leads to a loss of knowledge; additional retraining expenses; increase in social benefits. Practical implications. The materials presented in the article can be useful to representatives of institutions and scientists whose activities are related to the financing of education and the labor market. Originality/value. In the article, the author. The level of education of an employee is considered as one of the components of their potential. This component allows an employee to compete successfully in the labor market. In Ukraine, financial resources of the population cover more than 30 % of doctoral studies and their equivalents, as well as about 25 % of expenditures cover higher education. Given the spread of poverty and the weakening of state support for higher education, Ukrainians will face the problem of the provision of financial support for universities.