The Social Returns to Education: A Review

Abstract

Countries strive to grow and develop over a period of time. Investments made in human capital has the ability to propel development. Every society in one way or the other has benefitted from investments made in education. Returns to education can be categorized into private and social returns. Private returns to education look at the extent to which acquiring education improves the individual's earnings, employment prospects and the general wellbeing of an individual. Social returns to education are the extent to which other members of the society benefit from the education acquired by the individual's private returns. It usually occurs in situations when there is positive spillover effects or externalities from education. The extent to which this investment in education has yielded some benefits, how these benefits are measured and the magnitude of these investments is what has necessitated the writing up of this review. This study assessed some problems identified in measuring returns to education generally and social returns to education specifically. It also highlights some measurement issues in social returns to education. Most studies have identified that there exist positive social returns to education at all levels. However as a result of data and estimation problem as well as the huge spillover effects of education it is relatively difficult to attribute the growth in returns to education to only education.