Rate of return on investment in university education: A case study of iraq.

This study is concerned with a cost-benefit analysis of university education in Iraq. The major purpose is the calculation of the monetary private and social rate of return to investment in particular forms of university education in Iraq, represented by University of Baghdad. The subjects chosen for calculating were fifteen different programs. The present study evaluated the decision to invest in various university subject groups at age eighteen (i.e. immediately after secondary school graduation) and at later age. Costs and benefits are calculated from point of view of three entities: Private; the institution; and society as a whole. Costs and benefits per student year and per graduate are also calculated. The results indicate that private rates of return are higher than social rates of return in all subject groups; that the social and private rates of return on investment in Engineering are the highest; that the private and social rates of return for Medicine program higher than other programs (four-year and five-year program) except for engineering; that the private rates of return to investment in five programs (Engineering, Medicine, Pharmacy, Dentistry, and Veterinary Medicine) are found to be greater than returns associated with other kind of investment i.e. to exceed 12%); that the social rate of return on investment in all four-year subject groups, except Engineering are found lower than 7%; that the social rate of return, while the social rate of return in Engineering is greater than 12%; that there is a negative relationship between the commencement age and private rate of return; that there is a positive relationship between commencement age and foregone earnings (private cost). The implications of these results for allocation of government spending on university education in Iraq are discussed.