Externalities of Public Education System



Externalities of Public Education System

Introduction

From the technical point of view, education is a private good, since it does not share the consumption characteristics and impossibility of exclusion set price that is the specificity of the public goods. On the other hand; education, in general, is recognized as a public good with special features, or as a good merit or meritorious whose provision by public sector is justified as a complement to private. Fundamental Appearance and motivating the public provision of education is the existence of externalities, leading to suboptimal performance level in the private sphere. The formation of the individual, creating conditions for research and development, improvement of intellectual attributes such as creativity, ability and versatility to communicate knowledge, the contribution to personal experience and the social interaction and improved job placement are some of the externalities that are inherent to education.

As these external effects are not incorporated into price market, social returns and social benefits of education are therefore underestimated. On the other hand, the social and economic implications of certain decisions policy, the allocation of resources for education in general and the transfer of funds between levels of public education in particular, require a specific quantification of rates of private and social returns of education.

Discussion

Most of the empirical and theoretical literature has focused on the estimation and analysis of private returns to education, leaving the social factor in the background. In spite of this, the thought that people do not capture the full benefits of their own education has been strengthened over time. The theoretical consideration of externalities in education needs the simultaneous analysis of 2 analytical dimensions, which are the individual and collective. The individual perspective covers the set of the people benefits derived from their skills, education, knowledge, abilities, the occupational, connectedness. On the contrary, the collective dimension incorporates the full range of social benefits that are derived from the person's interaction with the environment which dumps the skills learned in the process of education. The individual application of personal and intellectual resources is developed from lead education in society development, research, streamlined processes and technological advances and, eventually, an efficiency that materializes in the economic growth and better performance. In recent times, the literature has shown greater interest in considering the externalities and social returns to education. Authors, such as Schultz (1988), state that “education acts as a ...