Rates of Return to Education in Singapore

In this paper, the rates of return to education in Singapore are computed by the cost- benefit approach covering the period 1980-1994. The results indicate that the rates of return to education increase with the level of education. Although remaining higher than the rates of return to secondary education, the rates of return for tertiary education are found to be declining during the period of investigation. Social as well as private rates of return for professional university-level courses such as accountancy, law and engineering are also enumerated. The rates for tertiary education are, in general, well above the prevailing prime lending rates. This has provided justification for the government to facilitate a study loan scheme for tertiary students so as to shift part of the burden for financing tertiary education to private individuals (students) who enjoy direct benefits.