Economics of Education: A Research Agenda

-The paper presents a systematic taxonomy of research areas in the economics of education and gives a number of key topics that deserve more research attention in the future. Emphasis is put on documenting the unit cost of education at different schooling levels and curriculum types, along with the learning and earning outcomes of education. Evidence on the costs and benefits, from both the private and the social point of view, can lead to efficiency and equity assessments of an educational system. Among topics where the research effort should be intensified are the screening hypothesis, measuring education externalities and the quality of schooling. [JEL I21] Copyright ©1996 Elsevier Science Ltd 1. I N T R O D U C T I O N GONE ARE the days when the economics of education literature could be annotated in the handful of items in Mark Blaug's (Blaug, 1966) first bibliography on the subject. The explosion of literature in the field is such that today a similar bibliography would occupy several volumes, if not an encyclopedia (for a modest attempt, see Psacharopoulos, 1987). It is customary before suggesting a research agenda to provide an overview of what we already confidently know on the subject. But even this is a very difficult task, given the many dimensions "economics of education" has taken. For example, it has been merged with labor economics, and entered into complementary fields such as psychology, sociology, anthropology and political science. Instead, I have chosen to follow a different route: I will provide only a critical list of research topics that are important for answering the most common policy questions governments face today regarding education. Table 1. Broad, over-time research themes in the economics of education Period Type of research Rate of return Screening Externalities 1960s X 1970s X X 1980s X X X in the late 1950s/early 1960s with estimates of the profitability of investment in education (see Becker, 1960). The 1970s witnessed the challenge to the social returns to education by the formulation of the screening hypothesis (see Arrow, 1973, among many others). And the 1980s saw a revival of attempts to estimate the effect of education on economic growth by means of "endogenous" models that allegedly catch much of education's positive externalities (see Lucas, 1988; Romer, 1990).