Question

Why does primary school education carry a relatively higher rate-of-return in lesser developed countries than it does in developed countries.

Answer 1

By the analysis of the condition we are clear that the primary school of education carry a relative higher rate-of-return in lesser developed countries than it does in developed countries. It is because of the reason that the the limited availability or the insufficiency of the human capital in the low income countries provides a better rate-of-return for the investment made in the education. This scarcity is observed in the lesser developed countries only.

For the low income countries { lesser developed countries} the rate-of-return is almost observed to about 12 percentage. While in the developed countries this will be relatively lower than that of lesser developed nations.

This rate-of-return for the education is made on the basis of human capital theory of education. And the theory gives us the idea that the education play a very significant role in promoting the productive capacity of the population in an economy.