This volume, part of a series of monographs that explores the relationship between the economy and schooling, is intended to show how economists have sought to cast light on the economic nature of education, on resource allocation problems within the education sector, and on policy implications of such analyses. The first part describes the basic…

The "new" economics of education replaces the "old" economics expressed in human capital theory, which viewed education as contributing to individual enhancement and ultimately to economic betterment. The "old" economics foundered on the rising levels of youth unemployment, a result of declining productivity and…