A SOCIAL ECONOMIC PROJECT ON INVESTMENT IN EDUCATION: Human Capital

Student thesis: Master thesis (including HD thesis)

  • Rikshan Selvarajah
4. term, Science in Economics, Master (Master Programme)
This thesis is based on one of the most debated political educations topics in Denmark – free education system.
Denmark is one of the countries that spends a larger percentage of GDP on education. To examine whether this high investment is justified for the society, will this thesis analyze empirical studies on return on education – based on the return for the society and individual.
The thesis begins with a theoretical explanation to provide an understanding of the topic. Based on two most dominant theories which are the human capital theory and the signaling theory.
Based on empirical studies and articles, it has been found that education provides a positive return, but still a high variation among the different educations and levels. The choice of profession is crucial factors in exploiting the full economic potential of education for society as well as the individual. The studies illustrate that some educations lead to high unemployment as well as low returns, which then gives the individual incentives to work below qualification where they are simply overeducated. In addition, it’s also found that majority of young Danes choose education based on their own interest rather than job opportunities and returns.
Overeducation is a socio-economic problem as society does not get the full benefits of the investment. Especially in a country where the education system is paid for by the taxpayers.
The thesis found a possible solution to this controversial topic. The solution would be to change the danish education system. This means to go from a free education to convert this to loans for the master-graduates. This will lead to much more applications to educations based on unemployment and high returns rather than their own interest.
LanguageDanish
Publication date29 Nov 2021
Number of pages80
KeywordsHuman
ID: 454389845