Costs and Returns of Education in Five Agricultural Areas of Eastern Brazil

Abstract

Abstract This study tests the hypothesis that education has a major role in agricultural development by estimating costs and returns of schooling and extension in areas at various modernization levels. Public and private costs are estimated from secondary information and farm surveys. Value‐added and auxiliary equations, estimated from farm‐level data, are used to derive annual returns of education. Although based on weak statistical results, schooling returns are negative or low, but increase with modernization level. Extension returns are generally high for individuals, but cover social costs in only two geographic areas. This suggests education's role in development may be limited.