ABSTRACT:
Schultz's human capital theory suggests that education is an investment in human capital, contributing to economic growth and social, economic, and scientific development. Higher education equips individuals with skills for employment and enhances productivity and earnings. It’s growth in recent years is notable, with the World Bank stating that every additional year of education increases a country's GDP by 0.37%. In India, higher education is recognized as a key driver of economic growth, contributing 4-5% to the country's GDP. It also promotes women's empowerment, self-esteem, and cultural awareness. The study aims to understand the concept of efficiency in higher education, its measurement, comparison with effectiveness, and future research directions. Efficiency in higher education is influenced by various variables, including individual benefits, process measurements, performance comparisons, economic value, competency alignment with job markets, value for money, Pareto criteria, cost variations, and a balance of economic and social efficiency. Metrics for efficiency in higher education include publications, research grants, and graduates' competencies. The study also explores the relationship between efficiency and effectiveness in higher education. The study finds that efficiency in higher education focuses on how optimally inputs and educational resources can be used to produce outputs which are related to individual performance measures. On the other hand, the no less significant idea of effectiveness in higher education is best understood by looking at the extent to which desired outcomes and goals are achieved, which are, of course, student-centric. Further research needs to be taken up to ascertain the roles and responsibilities of other stakeholders in the domain of higher education, namely, the parents and socio-political institutions as these may well influence educational outcomes.