Reflections on the Economics of Education Modern research on the economics of education began in the 1950s with research by T. W. Schultz Jacob Mincer Sherwin Rosen and some others although there are earlier precedents including analyses by Adam Smith Alfred Marshall and Milton Friedman. This new literature treats education as an investment that has both costs and returns. The returns analyzed are principally the increase in earnings because of greater amounts of schooling. The costs included tuition fees and other direct expenses from schooling and the earnings foregone by being in school rather than at work. Higher education has boomed throughout the world during the past three decades in many poorer and in all rich nations. An important part of the explanation for this development is that new technologies such as computers and the Internet increased the demand for persons with college education because college graduates more easily utilize and adapt to these technologies. Other important developments explaining the greater incentives to get a higher education are the shift to high skilled services such as the education and health sectors and away from manufacturing and increased globalization that helped spread the demand for these new technologies throughout the world.