A Review of Some Principles Defining the Concept of the Economics of Education
The concept of the economics of education emerged during the 1990s. Most of the research in this area has been conducted in Anglo-Saxon countries and emerging economies. These studies fall within complementary research fields: human capital and growth, the economic efficiency of general and vocational training, and the impact of education and training, most often linked to the issue of evaluating training programs.
Overall, the application of the economics of education approach is evident in practice and in the literature through the comparison of the costs associated with establishing and operating education and training programs with the benefits and advantages they provide at various levels (individuals, families, regions, countries, etc.). Thus, to address questions regarding the social or economic return on investment of a training-and-job-placement system, three elements are key to its implementation: measuring costs, quantifying benefits, and calculating the return on investment.
In its overall design, the approach is based on two main elements: the measurement of total costs on the one hand, and the measurement of wealth created and technical and social impacts on the other. It makes it possible to calculate the returns on investment generated by the program and to measure the system’s impacts.
Why evaluate the economic performance of a training and job placement program?
To understand the motivations behind these studies, it is important to consider them within the context of the challenges surrounding the sustainability and long-term viability of training and job placement programs, which, in most cases, owe their existence to external funding, often international (public or private) or national (government).
In this context (with external funding sources becoming increasingly limited), demonstrating the economic effectiveness and impact of the funded programs is essential to their long-term viability.
Added to this reality is the institutional challenge, primarily linked to the recognition of initiatives carried out in line with public policies and/or those of funding agencies. From this perspective, the perception of vocational training is not always positive, because in many cases the mismatch between the qualifications awarded and the labor market, along with the lack of a genuine job placement system, undermines the image of these programs. Demonstrating the effectiveness of well-designed systems to authorities and partners is therefore a crucial factor in ensuring their sustainability.
Finally, the sustainability of a training-and-job-placement program also depends on the quality of its management and the positive momentum among its stakeholders, whether they are program organizers and/or beneficiaries. Thus, the information provided by a study on the “economics of training and job placement” is very useful:
- When developing a strategic plan, such a study provides data on cost-effectiveness and helps identify the most suitable business models (scenarios): This was the case for Fekama during the initial analysis in 2018, which made it possible to shorten the program from 6 years to 5 years (3 years of training + 3 years of transition support → 2 years of middle school education + 1 year of work-study training + 2 years of transition support) without compromising quality.
- To foster recognition among professionals in the agricultural and rural sectors and involve them in the governance of the programs and in recruitment.
- To help families recognize the program’s benefits for their children’s future, which is also a key factor in recruiting future students.
- To help young people themselves (the beneficiaries) recognize the program’s effectiveness.
Fekama Agricultural High School in Manganoro, Madagascar
The Economics of Training and Job Placement at Fekama and the CFAR des Savanes
Based on the cost-benefit analysis method described above, two new studies on the economics of training and job placement were conducted in 2026: one focused on Fekama, a federation of six agricultural colleges in Madagascar, and the CFAR (Rural Agricultural Training Center) in Les Savanes, Côte d’Ivoire. Both programs are led by the agricultural sector and supported by Fert in collaboration with other partners.
The process was structured according to the following phases:
- For the assessment of training and job placement costs: by reviewing accounting data from the relevant fiscal years, as well as the number of trainees and those in job placement,
- For the section on the economic and social benefits and impacts of the program: organizing the work as a project (management, steering committee), formalizing expectations, defining the information to be collected and the method of collection, carrying out data collection (mobilizing relevant stakeholders, targeting young people to be surveyed, training interviewers, conducting the survey, and developing a data processing tool). And, throughout the process: coordinating the data collection process, verifying data, and interpreting results, in collaboration with the project leaders.
Measuring Cost
Without going into technical details here, the cost measurement developed in collaboration with the teams from both training programs aims to quantify the cost of training and job placement. This cost consists primarily of operating costs and, to round out this approach, costs borne by families.
Capital costs, which are primarily funded by grants, were deliberately excluded from the overall cost in both studies.
Measuring Benefits
It is worth noting that the concept of “benefits” in the field of training and integration economics is understood in the broad sense to include the various advantages generated by a training and integration program: financial benefits, of course, but also social, regional, and family benefits, as well as those that impact the agricultural and rural workforce.
Thus, it is recommended to define the scope of the concept of benefits adopted for the project, as these choices will influence the type of data to be collected to provide information on these impacts.
At this point, a preliminary remark is in order. The three editions of the study applied to the Fekama program in Madagascar (2018, 2023, 2026) focused on the training and integration of young farmers, which resulted in the trainees establishing themselves in agriculture. For the CFAR des Savanes in Côte d’Ivoire, it should be noted that by conducting a detailed post-training follow-up, it was possible to measure the benefits (salary amounts) for young people who were integrated into the workforce as employees. This status allows some young people to immediately engage in professional work while preparing to establish themselves as farmers.
It is also worth noting that the indicators chosen vary depending on the objectives being pursued. For Fekama and the CFAR des Savanes, four key indicators were selected: gross margin, return on investment for families, contribution to farmers’ professional organizations, and the technical and economic impact of services provided by young farmers (e.g., vaccination of animals such as pigs and chickens). The following diagram illustrates the overall approach.
Return on Investment
The principle is to calculate the average total cost of the entire program per young person and compare it to the cumulative gross margins generated by a young person who has successfully entered the workforce. The program’s return on investment is measured by the time required for wealth creation (the sum of gross margins) to reach an amount equivalent to the total cost of training and employment support.
For the CFAR des Savanes, the return on investment is achieved 2 years and 3 months after the end of the training program. In other words, after 2 years and 3 months, a young person has generated as much wealth as the cost of their training and the support provided to help them enter the workforce.
For Fekama, the payback period is longer (3 years and 2 months) due to smaller-scale farms, but the impact assessments we conducted indicate that for families, the payback period is 18 months. The other components of the impact assessment are detailed in the studies.
Studies conducted by Fert and its partners, with support from Ifocap
The third edition of the Fert-Fekama study (Madagascar) was conducted in 2025–2026 and covers data from 2022 to 2024.
The Fert-CFAR study in the Savanes region (Ivory Coast) is the first edition for this center, whose first graduating class completed the program in mid-2021.
The documents below are available only in French.
This article was written by Jean-Jacques Loussouarn, a member of Fert.
These studies were conducted with support from AFD, the Louis Dreyfus Foundation, and Ifocap.
