Social costs

Definition

The total resource cost of education to the economy. This includes the value of teachers’ time, books, materials and other goods or services, the value of the use of buildings and capital equipment, and finally the value of students’ time, measured in terms of alternative uses.

Source :

Woodhall, M. 2004. Cost-Benefit Analysis in Educational Planning. Fundamentals of Educational Planning, 80. Paris: UNESCO-IIEP.

Example of use

To sum up the arguments so far: Cost-benefit analysis of education usually consists of an attempt to measure the social or private rate of return to investment in particular types or levels of education. The social rate of return measures the relationship between the before-tax lifetime earnings differential associated with a particular type of education and the total social cost of that education measured in terms of its opportunity cost. This rate of return can be compared with the rate of return on other types or levels of education or with alternative forms of social investment to provide a measure of the economic profitability of educational expenditure by the state. Similarly, the private rate of return, which measures the relationship between after-tax earnings differentials and those costs that are borne by the individual, provides a means of assessing education as a form of private investment (pages 46-47)

Source :

Woodhall, M. 2004. Cost-Benefit Analysis in Educational Planning. Fundamentals of Educational Planning, 80. Paris: UNESCO-IIEP.