ECONOMICS OF EDUCATION: FROM THEORY TO PRACTICE

George PSACHAROPOULOS (Hellenic Parliament)

Economics of education is a relatively new field. In the last three decades of its existence, it has generated a great number of hypotheses, empirical findings and predictions, as well as Nobel prizes. However, in the world of education we live, there is an obvious divide between theory and practice. Ministries of Education, in both industrial and developing countries, often act as if economics of education did not exist.

The paper starts by reviewing major findings in the economics of education and their relevance to education policy making. It discusses the reasons why some robust research findings in the economics of education do not translate into practice. And it concludes by listing a number of research questions that are still open in the field.