ABSTRACT
This chapter examines outcomes in terms of economic returns to investments as revealed through the methods and the data of economics. It reviews and assesses the findings of economists about both monetary and nonmonetary returns on higher education. Physical capital, in the lexicon of economists, includes all useful physical assets—other than unimproved land and natural raw materials—that are used in the production of goods and services. According to the theory of human capital, individuals will spend time and money on more education when they judge that the present value of expected future benefits from the investment exceeds the cost (or when the expected rate of return exceeds the prevailing interest rate). By limiting the values of educational investment and rate of return to those only attributable to higher education, one also could estimate relative contributions of higher education to national income growth.
