What is Economics of Education?
Economics of education deals with the question how does education, processes of education, and education policies affect individuals (micro level) and society as a whole (macro level).
For instance, economics of education examines how certain decisions (e.g., investments in education) bear on the individual benefits and returns to education. What is the advantage of attending kindergarten? What are the benefits of certain school certificates? Why should a person attend university or begin vocational training?
Concerning processes of education, economics of education examines—among others—the following questions: what benefits does attending kindergarten for three years have compared to attending for only two years? What are the benefits of completing a Master's degree compared to completing a Bachelor's degree?
Economics of education also focuses on the macro level, specifically, on measures related to education policy. For example, l, economics of education tries to define and determine the effects of central exit exams. What are the advantages or disadvantages of adopting educational policies on the state level as opposed to the national level? Does reducing academic track from nine to eight years lead to higher returns on education? What are the consequences of an early enrollment at school? What are the advantages resulting from school choice?
All these questions are linked to individual and social appreciations of costs and benefits. Every decision is made according to individual preferences as well as expectations regarding perceived benefits and costs. Still, every decision and the corresponding results are associated with and contingent upon the input of resources. Economics of education examines if these resources are inserted purposefully and justly. Referring to this point, economists try to find out how various measures affect different cohorts. Are there any differences concerning benefits? Therefore, economics of education does not just try to maximize benefits and minimize costs in the form of input resources; it also tries to measure their effect and efficiency.