EFFICIENCY IN THE PROVISION OF PRIMARY SCHOOL AND SECONDARY SCHOOL TEACHING

Abstract

Investment in human capital has been recognized as one of the main engines of economic growth and success. With an aid of a model, observed rates of return to human capital investment , prior to committing in an investment decision, will help to ensure an efficient allocation of country's scarce resources. The investment project evaluated in this academic paper are the various education level in Singapore. The rates of return to primary, secondary, post- secondary , polytechnic and tertiary education were estimated through the average yearly earnings approach and the internal rates of return approach. The average yearly earnings approach revealed two important points. First, cross-sectional data analysis suggested that tertiary education receives the highest returns followed by post-secondary and primary education. Second, while tertiary education may have received the highest return relative to the rest, comparison between 1980 and 1994 results suggested that its return has fallen significantly from 141.1 % to 51. 7%. The internal rates of return approach demonstrated similar results . Cross-sectional data analysis for 1980 revealed tertiary education received the highest returns. Secondary education ranked second while primary education came in last. 1990 results were also consistent with 1980 findings. However , instead of tertiary education receiving the highest, polytechnic education now emerged as the profitable investment. Tertiary education ranked next, followed by post- secondary , secondary and lastly primary education. Comparing 1980 and 1994 results, the private pre-tax , post-tax and social internal rates of return to education demonstrated a significant fall for tertiary rates. The deterioration in tertiary rates, through the Kuznets' compression effect reduced the educational structure of earnings. Meanwhile, the substantial increased in demand and supply of tertiary education has brought about the change in the education composition of the labour force who completed tertiary education from 2.4% in 1977 to 9.8% in 1994. The two effects eventually explained the improvement in the Gini ratio for the household income of Singaporeans.