Private and Social Cost of Technical and Professional Education With reference to J.N.V. University, Jodhpur (Rajasthan) India

Abstract

Angus Maddison (Former Member of OECD) has described the role of education in respect of five major goals as : a means of personal fulfilment; an instrument for social continuity and cohesion; a mechanism for social mobility; a means to promote social equality and as an economic investment for individuals and society. The importance of knowledge was recognised as long ago as 1776. Adam Smith at that time argued that "Man educated at the expense of much labour and time may be compared to an expensive machine." And Benjamin Franklin, Smith's contemporary, declared that "An investment in knowledge pays the best interest." A prime example is the work of Princeton Professor Fritz Machlup "The production and Distribution of knowledge in the United States. According to Machlup's all-encompassing definition, knowledge industry includes education, research and development, communications media, information machines and information services. Chicago Professor Theodore Schultz points out that "The growth of this investment in human capital may well be the most distinctive feature of the economic system. Increase in national output has been large, compared with increases in land, man hours and Physical reproducible capital. The investment in human capital is probably the major explanation for this difference." Nonetheless, knowledge investment is a costly affair. Expansion of higher-education cost has been even more starting. The necessity for increased education investment is due to increase in the numbers and rising demand for higher education. With increases in family income, a larger proportion of the population is able to afford the costs associated with sending children to college and foregoing their earnings while there. With migration of the population to urban industrial areas, a larger proportion of the population resides in urban area where facility of higher education is available and where higher education is demanded as a job passport. Further with the advances in technology, the demand for persons possessing the necessary skills has increased.

Keywords : Human Capital, Investment, Private and Social Cost, Recurring expenditure, Fixed Cost, Variable Costs, Capital Costs, Stipend.