Abstract:

This paper focuses on investments in terms of formal education financing as a tool of accumulation of human capital. Studies in human capital show that states which provide important investments in human capital (education, research, health) are the ones that experiencing the most significant economic performance. This explains economic supremacy of the United States and the unprecedented economic development in the second half of the last century of several countries in Southeast Asia where it has invested heavily in education.

The objective of this work is to create an overview of the situation of education funding at European level, compared to the investment made by Romania. General education funding, particularly in recent decades is a matter of debate and analysis both in the economic field, and at the level of policy makers. Efforts are justified in terms of the importance they have for public budgets, determining the level of investment made by a nation in human capital development.

In the new economic environment characterized by instability, crises and competitive pressures, human capital turns into an essential pillar that leads to economic growth and development, recognized as one of the engines of economic development, both at the social and community and individual levels. Today, more than ever, education makes the difference and the interest of the general policy appears increasingly centred on the power of education in ensuring the welfare and of the competitiveness of a nation. Renowned specialists in education and economy have shown that a nation's level of development and education are closely interdependent, which leads us to affirm the supreme role of education through a slogan of "one country is rich if it has educated individuals."

In Europe, education systems are funded primarily from the public budget becoming increasingly difficult to sustain, especially for less developed countries. In the face of growing budget constraint arises not only the problem of optimal allocation of resources, but also the optimal way of financing education services.

Given the importance of education, and the financial crisis that we have just crossed, it should be needed to investigate the way education is funded nowadays. So far, it is noted by the World Bank researches that have generated a number of conclusions related to the positive effects on efficiency and equity by the institutionalization of selective tuition fees. It has also been noted the need to reform the help systems going towards a reduction and selective allocation of scholarships to students in higher education as well as creating a credit market for education and financing the loans for this purpose.

The scientific approach in writing this article was based on using data from the Eurostat database, Tempo and Statistical Yearbooks and official data provided by public institutions (eg Ministry of Education) and international organizations (World Bank, United Nations Development Programme - UNDP, Organisation for Economic Co-operation and Development - OECD, The United Nations Educational, Scientific and Cultural Organization - UNESCO). As well to achieve the level of knowledge and reasoning of the research conducted so far there have been consulted a vast literature which includes books and scientific articles in the field of education funding and investment in human capital.

Keywords:

Education, investment, human capital, cost, competitiveness.