What are the incentives for people to invest in education?
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The efforts people make to continue education after compulsory schooling can be thought of as an investment with the potential to bring rewards in the form of future financial returns. People invest in education in several ways: directly, through the payment of tuition fees, for example, and indirectly, by sacrificing potential income when they are in college and not in work (these can be thought of as "costs"). As with any investment, a rate of return can be calculated. In this case, it is driven mainly by the reality that people with higher levels of education earn more and are more likely to be in work ("benefits"). Where the rate of return is high, it implies a real financial incentive for people to continue their education.
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