Education – a cost or an investment?

The impact of education as an economic problem

• Reijo Raivola Oulun yliopisto

DOI: https://doi.org/10.33336/aik.96839

Abstract

At the back of all economic analytical methods applied to education there is the assumption concerning production function(s). The results obtained from estimating the production functions are as yet unsatisfactory. This has led to a situation in which the concept of production function has been used as some kind of a justification for administrative resource allocation decisions. Commonly used economic assumptions may be applied in the resource allocation of educational functions, e.g. cost-effectiveness. The application of this general equation can, however, easily lead to unfortunate trimming decisions which fail to take into account the special nature of the functions that are being cut down: i.e. the production functions peculiar to the profession. However, if economic theories are joined to educational, psychological and sociological conceptualization, there is a possibility for fresh approaches to the production function of education.