Contributions and Shortfalls: Economic Analysis and Non-Formal Education.

Education in general and specific educational projects fit into the construct of the allocation of investment resources that is basic to economic theory. Two techniques of computing returns to education and education projects are benefit-cost ratios and rates of return, which both rely on measuring costs and benefits. While measuring costs is relatively easy, measuring benefits is difficult because of the problems of identifying benefits and isolating benefits stemming from specific programs, trying to measure social versus private returns, the need to use experience to predict future income levels, and the marginal nature of calculations. The manpower approach is often suggested as a substitute method, but because it solves the problems of the other two techniques by ignoring them, its difference is illusory. The techniques are actually successive approaches to computing the returns to education and educational projects. The unique nature of non-formal education and the lack of clear definition of intended results cause problems in the measurement of program output. Further, the potential of economic theory with respect to non-formal education in the rural sector is discouraging because of the lack of cash wages among peasants, lack of record keeping, and difficulty of determining the effect of one new skill among many. (SB)