Cost benefit

Cost benefit Cost benefit seeks to measure in economic terms the benefits ofeducation to the individual and to society. Two benefits ofeducation are identified in the literature.

1. The private rate of return to the individual. The basic idea is that education provides individuals with utility (that is, pleasure and satisfaction from consuming goods and services), like any other goods or services. This may be reflected in the higher levels of income that those who are more highly educated can obtain over their lifetime; in non-monetary consumptive benefits associated with education such as participation in cultural events and the enjoyment ofleisure reading; and in some ofthe benefits that educated people pass on to their children. The decision to spend private resources on education is an investment decision. Individuals choose from alternative investments, selecting education when the expected yield from lifetime earnings exceeds the costs by a margin sufficient to give a rate of return greater than anticipated returns from alternatives.