A Theoretical Study of the Demand for Education.

Overview & Synopsis

In this study of the economic process of education, individual activities regarding education are treated as a process of overtime resource allocation. The optimum plan for receiving education is investigated in terms of a mathematical model, and the demand for education is derived by examining the effects of changes in parameters on this optimum plan. First, a theory is formulated which concentrates on how to spend one's time between receiving education and engaging in work, and how to divide one's income between paying for education and saving. Costs are analyzed as income spent and wages foregone; benefits are defined as improved labor efficiency and personal satisfaction. The model is then analyzed to reveal characteristics of a person's plan for receiving education. It is shown, among other things, that one generally receives education before engaging in work, that demand for education decreases when funds are scarce or when educational costs rise, and that rising wages can increase or decrease educational demand according to whether the wage shift is proportional or constant at each educational level. (author/ly)