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Rates of Return to Education: Conceptual and Methodological Issues

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Encyclopedia of International Higher Education Systems and Institutions

Introduction

The purpose of this entry is to provide an overview of the use of rates of return to investment in higher education, which has been one of the most popular methodologies for the analysis of the economic relevance of education since the emergence of the economic analysis of education in general and higher education in particular (Teixeira 2001). The consideration of education as an investment (Becker 1993) led to attempts to estimate the yield of that investment. This yield, or rate of return to education, was held by economists to explain people’s behavior in seeking education of different levels and types and could be used as a guide in allocating public resources to education (Psacharopoulos 1985). Rates of return’s estimates and calculations were used extensively in discussions of allocative efficiency, by considering alternative investments within and outside education (see Psacharopoulos and Patrinos 2018).

The estimates of rates of return were extremely important in...

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Author information

Authors and Affiliations

  1. Georgetown University, Washington, DC, USA

    George Psacharopoulos

  2. Faculty of Economics - U.Porto, CIPES, Matosinhos, Portugal

    Pedro Teixeira

Authors
  1. George Psacharopoulos
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  2. Pedro Teixeira
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Corresponding author

Correspondence to George Psacharopoulos .

Section Editor information

  1. Director CIPES, Matosinhos, Portugal

    Pedro Nuno Teixeira

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Psacharopoulos, G., Teixeira, P. (2019). Rates of Return to Education: Conceptual and Methodological Issues. In: Encyclopedia of International Higher Education Systems and Institutions. Springer, Dordrecht. https://doi.org/10.1007/978-94-017-9553-1_109-1

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  • DOI: https://doi.org/10.1007/978-94-017-9553-1_109-1

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  • Print ISBN: 978-94-017-9553-1

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