Education can view as consumption and investment. A product or services is considered to belong to the consumption category when it gives satisfaction or utility in a single period only while, it is considered pure investment goods or services when it is expected to give satisfaction in the future periods only. Education is regarded as the most important determinant of a person’s economic and social success. In economy, terms of education is an economic good because anything that satisfies a human wants is considered a good.
Consumption can be determined as simply paying the cost for a good or services and receiving all of the benefits for that good or services immediately. Education as consumption is education as a fundamental human right one of the right of every citizen in each country. It defined as consumption goods because a lot of the students could be said to be enjoyed the lectures and the homework given including the reading. This can be seen where many countries set the basic education that is primary and secondary school were used as compulsory education.
Education is also seen as public goods. It considered as consumption as it motivated by a desires to satisfy the need for personal development, social needs, and also for the needs of knowledge for understanding. Higher education can be viewed both as a consumption good for which the individual is willing to pay, and as an investment alternative that yields higher wages later in life. Besides that, education is as an investment aiming to obtain greater net income or rate of return in the future.
In other words, investment in education occurs when current consumption is sacrifice towards the purchase of education that is expected to give a higher level of benefits in the future. For instance, higher education level usually will provide higher future income and at the same time providing higher levels of future consumption. Education is an investment to increases the individual’s wage in the next period. As education is an investment, its assuming that man is a form of capital and capital is important to the growth of productivity of the country.
Therefore, education cost is viewed as the amount of money bought to acquire or invest in a number of human capitals that can expand the country economic capacity in the future. Some example of cost of the investment for education is sum of the direct costs, such as tuition fees, books and other expenses, and forgone labor income if they choose to work rather than study. Higher education enables the individual to choose from a broader aspect of jobs that are mostly considered more interesting and more challenging.
Higher education makes the individual more flexible in the type of job he is able to perform, as well as to perform it, which provides insurance against unemployment. Person chooses the kind and length of education that maximize his income. EDUCATION IS A GOOD INVESTMENT Education is a good investment. Which, investment in education can give more advantages and impacts to our self and our future? Furthermore, at same time investment in education can enhance economic growth. For instance, which some countries, for them investment in education take more years of schooling can earn more and get better jobs.
Besides that, many schooling can also be a source of social mobility. In part, raising level the average level of schooling in their population can also improve productivity, raise quality of jobs in economic and increase economic growth. Education is one of the best types of investments and will bring many benefits to the individual and for the development of country. Level of education from pre-school right up to the highest levels is the main way to improve the quality of life of individuals, as the main goal of education was to produce high quality of labor.
Education has significant impact on human life opportunities to gain and maintain the quality of life. Education can explain the ability of an individual to manage the quality of life for economic and social factors depends on the education received. The higher level of education was received, then the higher position in the society. This is because nowadays society regards that education as an important asset in the development of human capital, which is able to produce individual to be knowledgeable and will have a highly skilled.
Therefore, individuals with higher education will be able to deal with the amount of individuals who had a low education in the labor market even though they are fresh to the job market. Education people are seen as very important people in the effort to develop organization and they always good to the employer compare to people had a lower education level. This situation is an example for return on investment in education. Investment in education will give advantage to individuals in terms to get higher and unlimited income level.
The higher of education the higher income can be earned. In fact education will form an individual with knowledge and skills to improve themselves and in order to develop the state. With a variety of skills and knowledge that obtained from education, individuals will be able to get a job with higher offer salary or they can build own careers. Thus, who investing more in education to achieve a high level of education will be able to have a better life style with high household income, in addition education will give a lot of opportunities in terms of good job.
This stated that education will bring positive returns in the long run to the individual life. This is because they enter the job market late the people who do not make investment in education, especially education at the highest level, but will always have a good place in the job market and will even enjoy higher income levels. Other than that education was as a good investment because, individuals with high level of education are more likely to get a better job and will and will easy to get higher promotion or high job designation or will have unlimited work choice than individual who are less educated.
What we can says educated people will have more opportunities to build career in the labor market. For example Degree graduates will be able to become managers easily in the organization even though they are fresh in the labor market, while individuals who are educated as only with SPM will be so difficult or not be able to achieve that level of position even though was has been working for a long time in the labor market, unless they have a good training certificate during they work.
This proves that education is a very good form of investment, because have a good return in investment to the quality of life in the future. Someone who graduates with good grades from a good college or university will demonstrates intelligence more convincingly than if he simply tells a potential employer that he or his are smart and also demonstrates a degree of discipline and docility to employers, the employers will easily think that he or she is a good performance and have high IQ and will easily have a job.
Other than that education, will be able to increase labor productivity, by education they can learn more about theory and practical from that they can be a good in problem solving. Education can produce individuals who are creative and innovative. Creative and innovative thinking can improve labor productivity by produce high technology machine to increase the amount of production. This shows that education is not only give a good investment to individual but also to organization as well. Another good that education provides is the creation of social networks; in the education system the students will know each other.
They will learn something from associating with other intelligent kids and they will form friendship with them that may carry over into adult life and become business or professionals relationship and can cooperate in developing countries in terms of social and economics. Education will also provide a good social investment; with proper education individuals will be able to learn skills in life or known as soft skill. Human are preferably use multi-skill when performing daily life activities such as relation to family and community members, well as acting as an individual, member of a group, and employees of an organization.
Possess and practice the skills correctly is very important to adapt to the current environment. Therefore, individuals need skills in each four separate education that is learning to know, learning to do, learning to live with others and learn to become one. In addition, each individual also requires cognitive skills, concentration, self management, and social. Life skills will make individuals enable to link what they know and do right now with what they know and can do in the future, this will be able to form a well balanced human beings. Clearly education also is a good social investment.
Which, basically more education in early work economic can affect on economic growth? It is because better educated workers are more literate and numerate. They should be easier to train and also easier for workers to learn more complex tasks. Besides that, more education in the labor force can increase output in two ways; education adds skills to labor, increasing the capacity of labor to produce more output and it increases the worker’s capacity innovate (learn new ways of using existing technology and creating new technology) in ways that increase his or her own productivity of other workers.
At same time, more educated workers will have greatest opportunity to express their creative capacity. Higher earnings for more educated individual represent higher productivity, which an increase in educated labor in the economy will increase economic output and higher growth rates. Besides that, investment in education can effective of reducing poverty. Because this is most important investment education a country can make in its people and its future and is critical to reducing poverty and inequality. For instance, education gives people critical skills and tools o help them better provide for themselves and their children, education helps people work better and can create opportunities for sustainable and viable economic growth now and into the future, education helps fight the spread of HIV/AIDS and other diseases, reduces mother and child mortality and helps improve health, and education encourages transparency, good governance, stability and helps fight against graft and corruption. Besides that, investment in education also key of our successful in our life and future. Which, education can increasing our knowledge and expertise in a particular field.
From that, we can study to learn a particular subject and apply it effectively so that may gain something out of it. Besides that, When we study a lot about that subject it makes we more expert in that subject and experts in any subject are always in demand by the market. They are needed to cater to the growing needs of various entities. Furthermore, education also can give our being more qualification in labor market. It is because basically employer will give prioritize those have well qualification in a particular subject and provide what employer wants and they will hired them.
At same time, also give benefits over people who have minimum education. And this is considered any field. IS EDUCATION IS GOOD CONSUMPTION Education is a system in which all men must go through to acquire knowledge. Education is very important in the life of all mankind. Through education we also can obtain various types of information, knowledge, and so on. With the availability of education, knowledge gained is also able to distinguish between right and wrong, good and bad, good and evil, and others. Knowledge or education can differentiate the standard of living with others.
Consumption is a process to fulfill the basic needs or even for the others desired. For these cases, education is one of the consumption. Consumption is the process in which the substance thing is completely destroyed, used up, or incorporated or transformed into something else. Consumption of good and service is the amount of them used in a particular time period. Education is simply a normal consumption good and that like all other normal goods, an increase in wealth will produce an increase in the amount of schooling purchase. Increased incomes are associated with higher schooling attainment as the simple result of an income effect.
Education is a good consumption because at the margin school may be work, but infra marginally at least some or most people actually enjoy the reading, the lectures, the homework or else. Students especially those that go into college and graduate school could say to enjoy the lecture and the homework including the reading notwithstanding the dreaded final examination. Students more enjoy learning an education because of their interest. Some people enjoy go to school not only to learn a knowledge, but there also want to make a friend, and competent with each others.
Education was a good consumption because if the goal is to increase “social capital” for consumption purposes this is probably the least efficient way to do. Spend more money on education is more benefit that spend it on other factors. This is because, education has a highly advantage that will give a good feedback. Social capital is very important to improve the economic performance. As a country has a high social capital performance, so there will be a high national income. So, these show that an education is a good consumption.
Besides that, education is a good consumption because it can reduce the criminal level. As people more educated, there are no more crime. People will become skilled and educated to done a good job that give benefit to the economy and country as a whole. People will be more excellent to create a new product. As criminal level decrease, government no needs to spend a lot of money to solve the crime issues. The money can be used to develop a new project that will give benefit to all citizens. Other than that, education is defines a good consumption because it will bring the economic performance towards.
Other factors beside education will also give an advantage, but education will bring more advantage compare to others. References 1. Jeff Borland, Peter Dawkins, David Johnson and Ross Williams. Returns to Investment in Higher Education. Report no 1. 2000. 2. http://oecdeducationtoday. blogspot. com/2012/06/higher-education-good-long-term. html 3. http://www. becker-posner-blog. com/2007/04/is-higher-education-a-good-investment–posners-comment. html 4. http://siteresources. worldbank. org/EDUCATION/Resources/278200-1099079877269/547664-1099079934475/547667-1135281504040/Returns_Investment_Edu. pdf