Determinants of Social Demand for Education - Externalities

The state has several objectives of which welfare and development of the people are most important. Promotion of culture, protection of sovereignty of the nation, maintenance of peaceful and constructive neighbourly relations, pursuit of excellence, promotion of a just and equitable social order, fostering leadership in all walks of life, etc. are the other objectives. The list is not prioritised. The state would require a large pool of people with suitable and adequate skills, attitudes and capabilities to contribute effectively in realising these objectives.

Thus, the spread of educational opportunities would be of advantage to the larger society in general and the state in particular in fulfilling its functions. This spill over benefit of education to the society in general is known as externalities. It may assume several forms and get reflected in a variety of individual and group behaviours. Concern for hygiene and health care among educated, adoption of a small family norm, tendency to save a part of their income, development of a civic sense and people’s mobilisation for civic causes, constructive participation in electoral and other decision making processes, increased efficiency in work (in the fields of agriculture and allied activities, industry and the services) are some illustrations of externalities operating at macro level functioning of society.

Technically qualified manpower that supports the state in the realisation of its functions is the major contribution of the system of higher education. Along with this, there are a number of unaccounted and not easily quantifiable benefits. For instance, an educated woman is an asset to a society whether she is in the workforce or at home.