The economic evaluation of education initiatives

By making appropriate investments in capital, both physical and human productivity and hence economic performance can be improved. A key challenge for policy makers is to identify when a government intervention can improve the allocation of resources. In general policy makers will want to know which interventions are the most attractive in terms of the net benefits they can deliver. Accurate assessment of the benefits and costs of each potential intervention are crucial, particularly when public funds, which have an obvious opportunity cost, need to be committed. In this Chapter, we describe some of the key issues in programme evaluation before providing details of different techniques that can be used. We then assess the empirical results from two large innovative UK education initiatives. The first, Excellence in Cities (EiC), is a programme aimed at improving the ability of school children so that they can achieve better education and labour market outcomes. The second, the Education Maintenance Allowance (EMA), offers a financial incentive to young adults from lower income families to continue into further education.