THE PROFITABILITY OF SCHOOL INVESTMENTS IN AN EDUCATIONALLY ADVANCED DEVELOPING-COUNTRY

The Philippines is a country in which phenomenal educational expansion has taken place in the last 30 years. As such, it is a natural case f or testing the hypothesis that investment in education is no longer ec onomically valid. In this paper we provide new estimates of the return s to investment in education in that country for 1988. The findings in dicate that both social and private rates of return are of conventiona l levels and therefore a case of overexpansion is not warranted. Among the three educational levels considered, primary education exhibits t he highest returns and university education the least. But because of the particular case of the Philippines where private sources are domin ant in tertiary education financing, the degree of public subsidizatio n is highest in primary education. This makes the Philippines a world outlier in the structure of public financing of education, and serves equity and poverty alleviation causes as well.