The Investment approach to educational planning

Woodhall, Maureen
Lecture - Discussion Series, 32
12 p.

Online version

About the publication

If education is a form of investment, how much does it contribute to economic growth compared with other forms of investment? The first approach to answering this question was the correlation approach. But although simple correlation studies show a relationship between education and economic progress, they do not prove cause and effect. The residual approach tried unsuccessfully to show how much increase in national income was due to education. A third approach viewed education as an investment in human capital and tried to measure the economic rate of return on this investment. Recently research has shifted toward the search for strategies of educational planning as the process of forecasting the demand for education. Another strategy is manpower forecasting, which tries to mold the educational system to meet the particular manpower needs of the economy. A third strategy uses cost-benefit analysis to decide how best to allocate resources among different types and levels of education (from ERIC database)