Economics of Education Flashcards
What is Economics?
Study of how scarce resources are managed
Why does scarcity exist?
Bc our wants are greater than the resources available
What should we prioritize?
Teachers (quality) - if teacher quality improves student achievement, competitive compensation is needed
Capital expenses (books) - If books, tech, & equipment improves student achievement, capital spending is required
Class size - if class size improves student acheivement, increased hiring is justifiable
What is the difference between Public and Private (independent) education?
Public schools cannot select students, cannot charge tuition
Private schools selective of students, charges tution
What are the 2 types of private education?
Accredited - must follow curriculum, operates independently, selective on students
Registered - Don’t need to follow a curriculum, operates independently, selective on students
What are the 2 types of public education?
Provincial run - must follow curriculum centrally (board) run, cannot deny students
Charter - must allign with curriculum, greater autonomy, cannot deny students
What is the Debt-to-income (DBT) ratio?
The % of your gross monthly income that goes to paying your monthly debt payments & is used by lenders to determine your borrowing risk
Why do students sacrifice for university degree?
The idea of education acquisition as an investment & economic returns to education underpins the decision for many to undertake post-secondary education
What is the human capital theory?
Human capital consists of the knowledge,
skills, & health that people accumulate.
Schooling increases the productivity, skills,
and value of employees
What is the signalling theory?
Schl may not improve ability but can inform employees of workers potential skills
Employers hire based on degree, time to complete the program and percieved quality of the school
What is unbounded rationality?
idea that people know their preferences and are able to evaluate their options completely
What does behaviour economics say?
People prefer certain gains over probable ones even if the utility (input) is higher than the outcome
Preferences are not always consistent or well-defined
How do universities make money?
Government revenues
private revenues (tuition, grants, donations, sales investment)
What is the strategic mandate agreement?
Most of the operating funding has been based on enrollment with a small portion tied to performance (until 2020-2021)
What is the Mincer Earnings Equation?
Examines the relationship between earnings & an individual schooling & work experience
