Details
- Publication date
- 7 March 2014
- Authors
- Directorate-General for Education, Youth, Sport and Culture | European Expert Network on Economics of Education (EENEE)
- Geographical scope
- European Union
- Level of education focus
- Adult education
- Early childhood education and care (ECEC)
- Higher education
- School education
- Vocational education and training (VET)
- Thematic areas covered
- Education-to-work transitions, education and labour market
- Educational effectiveness and efficiency
- Governance of education
- Investment in education, economic impact of education
- Lifelong learning
- Monitoring and quality assurance
- Quality and inclusive education for all
- Skills development
- Teachers and trainers
- Whole-school and whole-system approaches and partnerships in education
Description
This report discusses how cost-benefit (CBA) and cost-effectiveness analyses (CEA) can support education policymaking by providing evidence on the economic value of different programmes. These tools help assess not only private returns but also broader societal impacts.
Education poses specific challenges for these methods, due to long time horizons, uncertainty of outcomes, and difficulties in monetizing non-market benefits such as civic participation or better health. Nevertheless, careful application of CBA and CEA can yield meaningful insights.
The report outlines step-by-step methodologies for conducting both types of analysis, including choosing proper outcome metrics, estimating future benefits, discounting, and considering externalities.
Several real-world examples are provided to illustrate applications and common pitfalls, such as high deadweight losses or inappropriate comparison groups. While few EU countries systematically use these tools in education, the authors argue that they should be mainstreamed.
In conclusion, the report calls for building institutional capacity, encouraging a culture of evaluation, and using CBA and CEA more widely to ensure cost-effective, evidence-based education policies.
Authors
Daniel Münich and George Psacharopoulos
Cite as
Münich, D., & Psacharopoulos, G. (2014). Mechanisms and methods for cost-benefit / cost-effectiveness analysis of specific education programmes. EENEE Analytical Report No. 19.
