Abstract

BARCEINAS PAREDES, Fernando  and  RAYMOND BARA, Jose Luis. Is it Profitable for the Public Sector to Subsidize Education in Mexico?. Inv. Econ [online]. 2003, vol.62, n.244, pp.141-163. ISSN 0185-1667.

This article estimates firstly the private and social rates of return of education in Mexico, and secondly the public rate of return on educational investment. The latter calculation -the Internal Rate of Return (IRR)- , considers the costs to be the sums of public educational investment per educational level, and calculates the benefits by means of an approximation of the payment of higher income tax and of more value added tax, which would go together with a higher educational level. The general conclusion is that public investment in education is highly profitable, and that this profitability is positively related to educational level. Viewed from another angle, it is worth mentioning that the public sector "recovers" its investment in periods -generally- of less than 20 years.

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