Externalities in Education in Nepal

Abstract

This article tries to interlink education with externalities and to show the positive and negative externalities in education. An externality is an economic term referring to a cost or benefit. Education emphasizes positive externality. We can’t measure all the externalities in education in monetary terms as it is merit goods. Nepalese students go to other countries for higher study every year.

We can also see the negative externalities in the education sector in Nepal. Negative externalities in education are caused by lack of proper policy and implication. Generally we see the private and public producers in this field and both have their positive and negative externalities. Without the fulfillment of basic requirements public school cannot spill over the positive externalities. Negative externalities in education lead to an increase in the large number of so called educated masses in the society and flight the money as well as the young generation to other countries. So, this paper will provide some basic information about externalities in education for the interested researchers in this field.