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1. It creates awareness of the issues of scarcity of resources and therefore a need to make a
choice in allocating these resources efficiently and effectively. Efficiently refers to the
process of providing education while effectiveness refers to the end result.
2. Economics of education enables us to determine the monetary and non monetary returns
to education. Returns can either be private or social.
- Private returns (rate of returns) refer to the benefits that an individual gets by
receiving education. Studies have shown that at the university level the rate of
returns are higher than at the lower levels (primary or secondary).
- Social rates of return refer to the benefits that accrue to the society that has
educated people. In education there are spill-over effects or the trickle –down
effects to the society. Studies shows that the rate of returns in the lower levels
(primary and secondary)are higher than the university level. This justifies the
introduction of FPE in all 3rd world countries.
3. Economics of education assists in identifying areas of inefficiency in resources used in
education i.e. either under or over-utilization of educational resources.
4. Economics of education helps us in identifying the contributions of education to
economic growth. It gives us insight into important issues in the economy for example
the link between education and agriculture, education and health etc.
5. Economics of education enables us to understand the environment we are living in and
make the rational decision. We are living in a technologically advanced world
characterized by knowledge explosion. This is described by the changes in human lives
e.g environmental changes, population changes, economic changes, technological
changes etc. Therefore education policy makers need knowledge of the subject so as to
get informed and explain the significance of these changes.
6. By using economic tools of analysis, we are able to go beyond the policy of management
rhetoric. Management rhetoric refers to decisions made without any support of the
resources, policy rhetorics are very dangerous.
7. Economics of education has the ability to highlight the difficulties associated with
measuring returns to education i.e. the problems associated with measuring returns to
education i.e. problems associated with the qualification of non-pecuniary returns to
education.
8. The subject enables us to understand the importance of investing in people. It raises the
awareness of the role people play in the organizations.
9. Economics of education equips us with the tools to evaluate education programmes and
to determine the cost-benefit analysis of all the programmes in education.
10. Knowledge of economics of education will help us in the planning process especially as
far as planning for education is concerned. We are able to set strategic plans and decide
how to allocate those resources, reasons for allocation of these resources etc.
Moraa orina answered the question on August 27, 2018 at 18:16
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