Economics of education

Education for young people has always been a leading social task. In all industrial societies young people from the age of 5 to 16 and sometimes older go to school. A lot of young adults then take jobs, but some — like you — go to college and a fewmore take advanced studies.

Education varies from country to country but it has the same economic characteristics in all countries. It improves skills which make people more productive. By means of education people are made stable members of society. Some teachers also do creative research which helps to improve technology. So education creates large economic values varying from technical productivity in factories and offices to progress of knowledge.

Various values of education are of two classes: private and social. Each student gets private benefits when he or she learns new skills which will allow them to get higher pay on the job. Besides, the job will probably be more pleasant and the person will cope with problems of modern life better.

There are also public benefits of education. First, it provides more productive workers for society, economy becomes more efficient and profitable. Without education many people do not cope with difficulties of life and turn to crime¹ or require public support. Second, people understand social life better and they will deal with public problems more intelligently and avoid extremism. Third, greater productivity of population provides more taxes in order to pay for public needs.

The task of economics of education is to evaluate public and private benefits and make decisions how much a government is going to invest in every type of school and how the government is going to do it. As productivity and stability of population is mainly increased at school level, total public subsidies for schools are justified. For education at the college level, however, the public benefits are weaker than private benefits and full public subsidies are considered less justified than at the school level.

Education is being financed by subsidies or scholarships. Which of them are more effective is also a problem studied by economics of education.

Technologies are becoming more complex and demand for education as well as a number of qualified specialists will grow in future. With it, the role of economics of education and the scope of problems studied by it is growing in the years to come².