RATES OF RETURN TO EDUCATION IN SINGAPORE

Abstract

The objective of this academic exercise is to study the rates of return to education in Singapore. It is hoped that such an exercise would provide information as to whether scarce resources are efficiently used. In addition, the degree of public subsidization of education, income distribution among different levels of education and the returns to education in the process of economic growth are also examined. Chapter I spells out the importance of human resource development to the economic growth of Singapore. It also consists of the objective and the scope of the exercise. Chapter II will attempt to discuss the conceptual framework and the literature survey of human capital. This discussion allows us to see the study in the wider theoretical framework. Methods of computing the rates of returns are shown in Chapter III. In addition, the measurements of private and social costs and benefits are also discussed. Chapter IV briefly describes the Singapore Education System as this will provide a useful and essential background to the empirical work. Certain assumptions are spelt out in this chapter too. Chapter V is the application of the rate of return concept with reference to Singapore economy. The cross sectional and time series empirical results are shown. The empirical results are then analysed. implications and suggestions are recommended. Chapter VI summarises conclusions are derived. the whole study and some From the empirical cross sectional and time series data of the private rates of return, it was found that public subsidization to tertiary education should be reduced. The reduction will not hurt the incentives of people to receive the tertiary education because of the expected high rate of return. It has been observed by many scholars that the society, in which the higher educated are more powerful socially and politically, would reward those with higher education more relative to their productivity and those with less education are compensated relatively less to their productivity even if this results in a less "optimum" allocation of resources. This academic exercise, however, does not have concrete evidence to support this observation in the Singapore society.