Abstract

Human capital is a crucial element for industrialization. The post-industrial world relies heavily on knowledge as a vital part of economic growth. The supply of highly skilled workers trained through higher education is of increasing importance to the development of a nation’s economy. A university education not only provides significant economic and non-monetary private benefits to students, it contributes substantial social and public benefits to society and future generations. However, critics argue that as decades of increasing access to higher education have not resulted in higher economic gains, the benefit of higher education could be in “signalling”. Therefore, the critical question is whether the increasing social costs of higher education have produced a corresponding increase in social benefits. There is an ongoing debate among educational economists between the “signalling” effects versus the “developmental” effects of university education.