Education as an Investment

Education as an Investment

Bill Gates says,

“Today, at the end of another century, change is in the air again. People are wondering whether schools are giving their children the skills they’ll need to succeed, this time in the Information Age. A new technology revolution is transforming business and putting new demands on our educational system”

As we enter the twenty-first century, it is clear that education is, indeed, the best investment that we can make, for an information economy depends upon a knowledgeable, skilled, educated workforce.

According to Merriam Webster’s Dictionary

“Investment is a thing that is worth buying because it may be profitable or useful in future”

Micro economics education learns the elements of demand, supply, and price of product education services. At the request of the elements learned about how prospective students to maximize the net revenue expected lifetime. Who's on the producer, namely education units to learn about how to combine inputs in order to obtain the lowest total cost, therefore, the discussion will also be related to the discussion about education as an industry.

Education organized by educational institutions, in which educational institutions may establish one or more educational units, then this means that the institution has a position as a business entity, and education units such as elementary, junior high, high school, vocational school, and programs of study in college serves as the company.

Education as Consumption and Investment

Education as consumption is education as a fundamental human right. Or is one of the democratic rights of every citizen. So until a certain level of procurement should be done by the government. Therefore, in many countries basic education (primary and secondary school) were used as compulsory education.

Cost

Psychological (Abilities, Interest, Willingness to Study, Cognition, stress)

Economical (Fees, Books, Other Expenditures)

Time

Benefits

PUBLIC BENEFITS

Literacy

Increasing Democracy

Producing Leaders

Productivity

Favorable Effects on Society

Social Norms

HRD       

PRIVATE BENEFITS (MONETARY)

Removing Poverty

Wages/Allowances

Better Working Conditions

Better Jobs

NON MONETARY

Making Wise decisions 

Culture

Values

Information

Knowledge

Communication

Skills

Human Capital Investment

The Concept of Human Capital was introduced by Nobel Laureate Theodore W. Schultz and elaborated by Gary Becker

Economists refer to "capital" as any man-made resource used to create goods and services. An education can be thought of as human capital because it supposedly makes you better at creating products or delivering services. The education is the "resource" that creates better products/services.

The rate of return is hard to define or measure. Theoretically, if you could measure all the money you could make after a college education and compare that to the money you would have made without the education, the difference is the value of the education. It's a good investment if the cost of the education is less than the value.

Education as an Economic Goods

                              Producer’s Goods

Goods

                        Consumer’s Goods

Education as an Industry

·         With the popularization of the private self-financing colleges, and the Deemed Universities, the role of the private sector in education has been accepted and recognized.

·         Employment

·         Economic Growth

On the whole we can say that Education has an brilliant role in economical growth and it is an investment too because

1.      Producing Economically efficient Citizens

2.      Scientific and technological progress

3.      Creating opportunities

4.      Removing poverty

5.      Skilled workers

6.      Right attitude towards learning and work

7.      Awareness for better living

8.      Increasing Productivity

9.      Importance of education