This is the fourth edition of this booklet, first published in 1970, which examines the uses and applications of cost-benefit analysis for education in developing countries. It explains the theory underlying estimation of the rate of return to investment in education, as well as describing methods of calculation; considers theoretical and practical objections to the use of cost-benefit analysis as a way of measuring the economic contribution of education and summarizes the results of cost-benefit studies in nearly 100 countries. The booklet discusses problems of interpreting cost-benefit analysis, examines recent criticisms of both its theory and practice as applied to education, and considers its practical usefulness for educational planners. It concludes that although precise measurement of the economic benefits of education is not possible, cost-benefit analysis does provide a useful framework for evaluating and comparing alternative ways of allocating and using resources for education in developing countries.
