Serendipity or Singularity: Endogenising Infinite Returns on Education

Abstract

While education has been accepted as an important determinant of well-being, the empirical evidence on the impact of studying economics has been mixed. In this paper, the issue of measuring the impact of investment in economics education is addressed in several steps. First, based on the argument by Skidelsky (2015), the time-invariant model is proposed that allows estimating returns on studying economics. Second, the values of possible returns are estimated in the context of the economics studies offered in 1996-2000 at Tallinn University of Technology. Third, the behavioural properties relative to returns are established and suggestions are made to estimate returns using the acknowledged assumptions and proxies. The main novelty of the present approach is the combination of mathematical reasoning and retrospection. It is shown that returns on economics education will always be positive. It is shown that endogenous parameters may be relevant for assessing the overall impact of such education, and it is suggested that until the nature and properties of singularity and serendipity are explained, the returns on economics education cannot be measured.