Economic Return of Attending Medical School in Ethiopia

Abstract

The decision to attend university and the choice of field of study has a significant impact on an individual’s lifetime earnings. The main objective of this study is to examine and estimate the private returns to medical schooling in Ethiopia with a focus on bachelor degrees. The paper applied the discounted rate of return method. Thus, by treating Medical school tuition payments, room and boarding expenses and the opportunity costs of foregone wages as investments in human capital the researcher estimated both net present value (NPV) and internal rate of return (IRR) of medical education. Questionnaire was designing and different documents were reviewed to get the required data. The result of the study revealed that under a 5 and 10% discount rate, on average physicians enjoys a net present value of 88,891.15 birr and 76,274.15 birr respectively. The expected private internal rate of return also found to be 25.5%, which represent a higher rate than the ones found in the developed countries literature. This result implies that medical education in Ethiopia is profitable and sound investment in private point of view.