Abstract

abstract:

This paper provides a conceptual framework for the articles that follow in this special issue by exploring how the external social benefits of higher education contribute to higher sustainable rates of per capita development of families and nations. It presents a fundamental rethinking of economic development that explains the major role of education, and of higher education and its relation to new ideas, as well as of education finance both intuitively and using a formal model. Empirical estimates of social externalities specific to higher education are summarized. The paper also develops guidelines for policies. It concludes that there is substantial underinvestment in higher education and that privatization of higher education finance has reached or exceeded its economic efficiency limits in the US and probably in England.

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