The Return of Investment on Tertiary Education in Malaysia

Abstract

This paper examines the rate of return on higher education to first degrees, master's degrees, and PhDs in Malaysia using previously published data. The purposes of this research are to study and identify whether or not there is a direct link between tertiary education and wages. Barbara Ischinger, Director for Education, points out ''Education has always been a critical investment for the future, for individuals, for economies and for societies at large.'' 1 John F. Kennedy once said; ''Let us think of education as the means of developing our greatest abilities, because in each of us there is a private hope and dream which, fulfilled, can be translated into benefit for everyone and greater strength for our nation.''2 A common belief existing in all societies suggests that tertiary education degree actually provides great pay-off to the beneficiary. According to the results of some recent surveys on this topic, students in general seem to agree with this common belief that they will have positive returns immediately after graduation.