The private and social returns of public tertiary education in thre Philippines
Date
2013-01
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Abstract
This study aims to know the relationship between the social rates of return to education
and the amount of society's investments or government subsidies in the Philippines, and the
private rates of return and the individual's investment on his or her education. Cost benefit
analysis is employed in this study to determine the social and private returns of investments in
public higher education, specifically in the University of the Philippines and the Polytechnic
University of the Philippines. The results show that the UP system has a higher social return than
PUP. Thus, UP should be subsidized more than PUP. This proves that there is indeed a
relationship between the social rates of return to education and the amount of society's
investments or government subsidies in the Philippines. Subsidy for PUP may be increased, but
not necessarily up to a point equal to or higher than the subsidy for UP. Private return is also
higher in UP than in PUP. Students would prefer to invest in a UP education rather than a PUP
education, disregarding the factors such as accessibility of school and choice of courses. It also
proves that the private rate of return is used to explain the behavior of an individual regarding the
demand for higher education and the equity effects of subsidy. A socialized tuition scheme is
recommended for both UP and PUP for equity reasons among students from low to high-income
families enrolling in these state universities.
Description
Keywords
Private and Social returns, Public tertiary education, Philippines