Increments in human capital which provide a yield appropriable by the individual and a stream of benefits to society as a whole; or, in the words of Attiyeh (1974), educational and informational output, which refers to "increases in student’s knowledge and skills, which increases their productivity and their ability to earn income, and the reporting of student’s attributes and educational attainments to students themselves and to prospective employers, which may facilitate more rational choices and hiring decisions."

Entertainment services consumed currently and privately by students during the studies.

Increments in the stock of research, i.e., increases in theoretical and empirical knowledge and the creation of new concepts and products which may directly or indirectly increase the economy’s productive capacity.

Methods for Measuring Macro-Economic Returns of Education: The Internal Rate Method evaluates the private and social profitability of the educational investment. The concentration on private returns may well lead to an underestimation of the full returns to society, if education has the characteristics of a public well. Social rates of return include all direct costs of schooling (and not just those borne by the individual) and are calculated on the basis of pre-tax (instead of post-tax) earnings. According to OECD (1998), social rates of return are consistently found to be lower than private ones. In general, differences between the social and private rates of return in different countries appear to be due exclusively to differences in the direct cost of schooling. The estimated social rates should be regarded as a lower bound of the full returns to education, as all costs of education are well included whereas broader non-employment personal benefits are excluded (social or political gains, lower risk of unemployment, etc.).

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* Contributed by -
Raamakrishnan M. & Aparna Renganathan,
PGP1 Students,
BIM, Trichy,
Published in KRIYA, February 2006 Issue, the monthly magazine of the institute.