Educational Degree Design: The Economic Rationales

Abstract

Within the economics of education, degrees are treated as given empirical phenomena. There are neither scientific definitions of degrees nor theories of degree design. So far, the economics of degrees are not well understood. This paper aims to improve this understanding. It suggests that especially the economics of information, the real options approach of investment theory, agency as well as transaction cost theories can help to understand the design features of degrees, their inner complexities, and their hierarchical embeddedness. A deeper understanding of the rationales behind degrees allows for new approaches to optimize degrees.