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
Description
This report examines how cost-benefit (CBA) and cost-effectiveness analysis (CEA) can be applied to evaluate education programmes. It explains the economic logic behind these tools and details the specific challenges in applying them to human capital investments. Education involves long-term, uncertain, and often non-monetary benefits, which makes precise valuation complex but not impossible.
The report outlines methods for estimating private and social returns, discusses data needs, time horizons, and how to quantify externalities like reduced crime or better health. It emphasizes that CBA/CEA should support both ex-ante policy design and ex-post evaluation.
The authors argue that despite data and methodological limitations, these tools enhance transparency and policymaking quality. Lastly, they recommend broader adoption across EU member states and call for developing institutional capacity and evaluation culture.
Authors
Daniel Münich & George Psacharopoulos
Cite as
Münich, D., Psacharopoulos, G. (2014), Why Should We Care About the Costs and Benefits of Education?, EENEE Policy Briefing no. 3/2014.
