Effectiveness of investments in education

In spite of the high costs of education, investments in education are considered to be highly profitable (Checchi, 2006). In this respect, it should be said that the major advantage of investments in education is the huge potential such investments opens for an individual. What is meant here is the fact that investments in education allows an individual to acquire knowledge and to develop skills and abilities which can allow him/her to make a successful professional career that will make the return on investments substantially higher compared to costs spent on his/her education. At the same time, companies investing in training of their employees or in educational programs for their future employees can count for a more effective and productive work of these employees compared to other employees. As a result, the growth of productiveness and effectiveness of employees ensures positive effects of investments in education.

As for the state investments in education, it should be said that the effectiveness of such investments can be traced on the macroeconomic as well as microeconomic level, through the unemployment rate, the growth of productivity, the emergence of knowledge-based industry, the amount of innovations and new technologies introduced in a country. Even though, the state’s investments in education do not necessarily bring direct returns on investments, but still such investments increase the scientific and economic potential of a country, which is of the utmost importance in the modern world since the development of science and knowledge-based industries allows a country to take the leading position in the international market. At this point, it is important to remember that the high level of development of education can enlarge sources of funding of national education. For instance, British and American Universities attract a large number of international students who are willing to study in the UK or the USA, where they can get the higher education and, thus, get consistently better job opportunities in their countries compared to other professionals, who studied at local Universities. In such a way, Universities that are able to attract international students can get an additional source of funding, while international students studying at these Universities can benefit from better job opportunities. As a rule, the return on investments is consistently higher than costs spent on education by such students and the same trend can be traced in relation to all students, regardless of the country of their origin.

Finally, speaking about the effectiveness of investments in education, it is worth mentioning the cost-effectiveness of education. Today, the costs of education can be decreased by means of the development of the system of distance learning, especially at the level of higher education, while benefits from such investments outweigh costs substantially because the number of students increases consistently, while costs of education remain relatively low (Coleman, 1996). At any rate, the development of new, cost-effective education systems and programs makes investments in education particularly profitable.

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