Abstract—This paper focuses on specifying the determinants of optimal level of schooling in Egypt, identifying the supply and demand functions for optimal schooling level and estimating the optimal level of schooling in Egypt using a human capital model. The concept of human capital is first introduced by Mincer (1958)  and then elaborated by two of the Nobel Prize winners, Schultz (1961)  and Becker (1962) . It means that, individuals acquire skills and knowledge in order to increase their future earnings stream. Individuals acquire these skills through education, training and experience. The models of investment in human capital ascertain that, the optimal schooling level occurs when the marginal benefits of schooling equal its marginal costs. The main objective of this paper is to provide an economic analysis of a human capital model in order to specify the optimal schooling level and its determinants in Egypt. The methodology of this paper is based on studying and analyzing the topic of optimal level of schooling by clarifying the concept, identifying its determinants and formulating and estimating a model that help in determining the optimal schooling level in Egypt by using data of Egypt Labor Market Panel Survey 2006 (ELMPS 06), which was presented by Central Agency for Public Mobilization and Statistics (CAPMAS) in cooperation with Economic Research Forum. The results imply that, there is a positive relationship between the number of years of schooling and the private rate of return to schooling. It is estimated that, the optimal level of schooling for the sample is 12.6 years on average. Moreover, the main determinants of optimal level of schooling in Egypt are: the father's and mother's level of schooling, which represents the income of the family, the ability differences and the quality of education. Actually, there are two main policy implications of this paper; the first policy is to decrease the number of years of schooling from 16 to 13 years in order to apply the empirical results of this paper. The alternative policy that should be adopted is to pay more attention to the variables that are included in the model so as to increase the optimal level of schooling in Egypt.
Index Terms—Human capital theory, human capital investment models, optimal level of schooling, Egypt.
Marwa Mohamed Shibl Biltagy, Assistant Professor at Faculty of Economics and Political Science, Department of Economics, Cairo University, Egypt (e-mail: email@example.com).
Cite: Marwa Biltagy, "The Optimal Schooling Level in Egypt," International Journal of Social Science and Humanity vol. 2, no. 2, pp. 117-122, 2012.