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Returns to investment in education in Singapore
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Type
Thesis
Author
Ng, Siew Fong
Supervisor
Ussher, John
Abstract
In the light of Singapore's acute scarcity of natural resources, it is imperative in her strategy for economic survival to maximise human potential.
In the belief that the full human potential may be achieved by raising the standards of educational attainment, a considerable amount of public funds have been invested in education.
The key concern in this study is whether these resources invested in education have been efficiently allocated.
The general approach in the economics of education is to treat educational expenditure as investment in human capital and calculate the yield to educational investment in the same manner as for physical capital. This approach is used in this study to examine the efficiency of resource allocation in education.
The theoretical framework is provided by the human capital theory, the basic premise being that variations in income are due partly to differences in labour productivity as a consequence of differing amounts of human capital acquired by workers via education or other means.
The profitability measure used in this study is the internal rate of return.
The study examines the returns to primary, secondary and tertiary education in Singapore and the returns to university education in Singapore by field of study and class of degree.
The two main sources of data in estimating the returns to education in Singapore are Release 7, Income and Transport of the 1980 Population Census and the 1980 Report on the Survey of Employment of Graduates.
The findings indicate that for men, educational investment is profitable, especially at the tertiary level. Though the private profitability of secondary and tertiary education for women is relatively high, the returns to women are lower than those for men. The findings suggest that greater efficiency in resource allocation may be achieved with expansion of secondary and tertiary education, especially in some fields of study. The returns to graduates by class of degree are not significantly different, implying little or no credential effect in the reward for work in the private sector.
The broad policy implications include the expansion of secondary and tertiary education, especially in some fields of study, raising private educational costs, and upgrading the quality of education.
In the belief that the full human potential may be achieved by raising the standards of educational attainment, a considerable amount of public funds have been invested in education.
The key concern in this study is whether these resources invested in education have been efficiently allocated.
The general approach in the economics of education is to treat educational expenditure as investment in human capital and calculate the yield to educational investment in the same manner as for physical capital. This approach is used in this study to examine the efficiency of resource allocation in education.
The theoretical framework is provided by the human capital theory, the basic premise being that variations in income are due partly to differences in labour productivity as a consequence of differing amounts of human capital acquired by workers via education or other means.
The profitability measure used in this study is the internal rate of return.
The study examines the returns to primary, secondary and tertiary education in Singapore and the returns to university education in Singapore by field of study and class of degree.
The two main sources of data in estimating the returns to education in Singapore are Release 7, Income and Transport of the 1980 Population Census and the 1980 Report on the Survey of Employment of Graduates.
The findings indicate that for men, educational investment is profitable, especially at the tertiary level. Though the private profitability of secondary and tertiary education for women is relatively high, the returns to women are lower than those for men. The findings suggest that greater efficiency in resource allocation may be achieved with expansion of secondary and tertiary education, especially in some fields of study. The returns to graduates by class of degree are not significantly different, implying little or no credential effect in the reward for work in the private sector.
The broad policy implications include the expansion of secondary and tertiary education, especially in some fields of study, raising private educational costs, and upgrading the quality of education.
Date Issued
1987
Call Number
LC67.S5 Ng
Date Submitted
1987