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Abstract
This paper reviews some of the existing economics of education literature from the perspective of South Africa's education policymaking needs. It also puts forward a suggested research agenda for future work. The review is arranged according to five areas of research: rates of return, production functions, teacher incentives, benefit incidence analysis and cross-country comparisons. Production functions, especially if translated to cost-effectiveness models, can point to important policy solutions. Teacher incentives is a policy area that is in need of a better theoretical and empirical basis. Rates of return are difficult for policymakers to interpret, but suggest a need for a qualification below the Grade 12 level. While benefit incidence analysis can demonstrate large improvements in the equity of public financing, cross-country comparisons reveal that not only is the distribution of schooling outcomes particularly unequal, on average it is well below what the country's level of development would predict.
Acknowledgements
Both authors are lecturers on the economics of education course offered to education planners studying for the Professional Certificate in Education Finance, Economics and Planning at the University of the Witwatersrand. This initiative, funded by GIZ (German Society for International Cooperation), is targeted at sub-Saharan Africa. This article is partly informed by what has appeared important to practitioners attending this course. An earlier working paper version of this article can be found online: http://ideas.repec.org/p/sza/wpaper/wpapers105.html
Notes
1FET colleges are institutions that may accept school leavers in the Grades 9 to 12 range. They were previously known as technical colleges.