Question

a) Why do people invest in education? Discuss how individuals make these decisions using the human capital model and the signalling hypothesis.

b) How do these two models differ in their implications for policy makers with regards to subsidising education?

Answer 1

INVESTING IN EDUCATION

• we first need to know the importance of education to understand as to why do people invest in education.
• education is a prime and a key fundament to succeed in future and build and strengthen the economy
• a fundamental right to every individual to survive everywhere. it has itz due importance all over the globe
• some one rightly said " the only thing more expensive than investing in education is not investing in education".
• lack of investments in education leads to more public spendings, theft,illeteracy, crime, health and hampers economic growth deeply
• no economy can afford not investing in the education of the society. it is of grave importance to the extent it cannot afford to leave out even an individual
• economic growth, economic independence and the stability of an economy all lie in theinvetsments made in education
• education brings in effeciency, productivity,human capability and capacity in the economy
• as per the human capital model education is an engine to growth and the key to development od the society
• high and quality education is vital for an economy to grow and develop.
• each developing nation and an underdeveloped nation needs to prioritize itz edcuation in order to meet itz basic development standards
• expanding educational opportunities expands and promotes economic growth
• the standard of each individual rises with education which brings in consumer satisfaction,consumer utility,human resource, high standards in production, exposure to the markets and growth in every field. it is an input to human resource development
• it is necessary to apply the theory of human capital to the educational system for the society to grow and the conomy to develop
• development is attained with the increase in ability of the work force by edcaution
• productivity, creativity, enhancement, skill, and labour force is attained by eductaion which ultimately relate to economic growth
• educating itz population and investing in the education will effeciently cover the investments and promote economic growth also fosters technological innovations which makes capital and labour more productive which generates income and growth