Why con more jobs be creted in the field of educhjation? Give any 3 resons?
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Education economics or the economics of education is the study of economic issues relating to education, including the demand for education, the financing and provision of education, and the comparative efficiency of various educational programs and policies. From early works on the relationship between schooling and labor market outcomes for individuals, the field of the economics of education has grown rapidly to cover virtually all areas with linkages to education.
Education as an investmentEdit
Economics distinguishes in addition to physical capital another form of capital that is no less critical as a means of production – human capital. With investments in human capital, such as education, three major economic effects can be expected:
increased expenses as the accumulation of human capital requires investments just as physical capital does,increased productivity as people gain characteristics that enable them to produce more output and hencereturn on investment in the form of higher incomes.
Investment costsEdit
Investments in human capital entail an investment cost, just as any investment does. Typically in European countries most education expenditure takes the form of government consumption, although some costs are also borne by individuals. These investments can be rather costly. EUgovernments spent between 3% and 8% of GDP on education in 2005, the average being 5%.However, measuring the spending this way alone greatly underestimates the costs because a more subtle form of costs is completely overlooked: the opportunity cost of forgone wages as students cannot work while they study. It has been estimated that the total costs, including opportunity costs, of education are as much as double the direct costs.Including opportunity costs investments in education can be estimated to have been around 10% of GDP in the EU countries in 2005. In comparison investments in physical capital were 20% of GDP.Thus the two are of similar magnitude.
Education as an investmentEdit
Economics distinguishes in addition to physical capital another form of capital that is no less critical as a means of production – human capital. With investments in human capital, such as education, three major economic effects can be expected:
increased expenses as the accumulation of human capital requires investments just as physical capital does,increased productivity as people gain characteristics that enable them to produce more output and hencereturn on investment in the form of higher incomes.
Investment costsEdit
Investments in human capital entail an investment cost, just as any investment does. Typically in European countries most education expenditure takes the form of government consumption, although some costs are also borne by individuals. These investments can be rather costly. EUgovernments spent between 3% and 8% of GDP on education in 2005, the average being 5%.However, measuring the spending this way alone greatly underestimates the costs because a more subtle form of costs is completely overlooked: the opportunity cost of forgone wages as students cannot work while they study. It has been estimated that the total costs, including opportunity costs, of education are as much as double the direct costs.Including opportunity costs investments in education can be estimated to have been around 10% of GDP in the EU countries in 2005. In comparison investments in physical capital were 20% of GDP.Thus the two are of similar magnitude.
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