ABSTRACT
Individual (family) is the main purpose of the education investment in order to obtain better employment opportunities, make the future more income such as salary, for individuals, in determining the goal of higher education investment, right after the investment direction of professional (e.g., school, etc.), should determine the optimal investment scheme. Individuals, therefore, higher education investment decisions need to consider to pay the cost, time, jobs and future earnings, on balance, decide whether to continue to go to school or employment immediately. This paper uses costbenefit, internal rate of return and payback period of investment to analyze the rationality of personal education investment decisions. Including personal internal rate of return of higher education is the core of the higher education investment decision theory, and has become the theoretical basis of higher education scientific decisions of investors. In the economics of higher education, personal internal rate of return is cost-benefit method application in the field of higher education, is to a person’s future by increase the receiving higher education net economic compensation of a kind
1 INTRODUCTION
In 2012, the number of university graduates in China has nearly 7,000,000, so the situation of employment is very severe. However, there are many not be admitted to the University of the people, is to try to accept higher education or selfstudy mode through the network, going to a certain degree of human capital investment. How could they do it? In addition to the knowledge economy era and social development’s demand for high-level talents, job market information asymmetry, entrepreneurship channels is still incomplete, industrial structure adjustment of external causes such as instability of employment environment, knowledge can change fate and intrinsic motivation of parents also plays a key role. “Education is not only consumer behavior, on the contrary, people consciously spending and social and private education is to obtain such a productive accumulation: this accumulation contained in the human body, can provide a variety of services in the future, these services including future revenue, operating capacity will be their future family activities, and to meet the consumption capacity. Therefore, the quality of the population regarded as investment in education human capital investment”.[1] According to the theory of human capital investment, education investment rewarding people for education and other human capital investment, improve the configuration and production ability, the ability to optimize the allocation of resources, but also can bring greater production. Therefore, the more educated people, the more enterprise is willing to pay higher wages for them. This phenomenon can be explained by age income curve: an education can improve one individual production skills. With
of measure, so need to determine the costs and benefits is determined based on the internal rate of return.
