The returns to investment in education: Some theoretical and empirical insights

Ukaj Mic and Mustafa Topxhiu Rahmije
Additional contact information
Ukaj Mic: Fama College, Kosovo
Mustafa Topxhiu Rahmije: University of Prishtina, Kosovo

Economics and Applied Informatics, 2019, issue 1, 193-203

Abstract: The aim of this study is to examine the importance of investment in human capital, methods for empirical assessment, challenges during the estimation as well as the main findings of the studies having dealt with this issue on the global scale. This study shows that empirical assessment of investment in human capital is mainly done by calculating the rate of return to schooling, which in most cases is realized through two methods: full discounting method and the Mincer`s earnings equation. For some reasons, researchers have preferred to use more the second method, even though it has been criticized in several cases due to some assumptions made, especially for the fact that it considers schooling as exogenous, omitting the role of innate abilities. Many researchers have used different strategies to handle the issue of innate ability, however, there are still doubts whether these strategies improve the situation in assessing the rate of return to education. However, regardless of the methodology used, the study shows that investment in human capital plays an important role in increasing workers productivity, reducing poverty, reducing gender differentials and bringing a range of other personal and social benefits.

Keywords: Human capital; Education benefits; Education costs; Returns to education (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.eia.feaa.ugal.ro/images/eia/2019_1/Mic_Rahmije.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ddj:fseeai:y:2019:i:1:p:193-203

DOI: 10.35219/eai1584040923

Access Statistics for this article

More articles in Economics and Applied Informatics from "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration Contact information at EDIRC.
Bibliographic data for series maintained by Gianina Mihai ().