Manpower planning,rate of return analysis,and the university medical schools: The case of Australia

In this paper, an examination is made of some of the errors in educational planning arising from manpower forecasts. Using the Australian doctors manpower plan, 1975–91 (Committee on Medical Schools, 1973) as an illustration, the writer shows the large variation in results that can occur through the substitution of alternatively feasible coefficients. Rate of return analysis is then used to examine the economic feasibility of the recommendations to expand the Australian medical schools, the conclusion being made that rate of return analysis is required for the economic decision making, the manpower forecasting only being a thechnological. guide for varying, the returns of income differentials of the investment to allow for any rigidities in the education system or the labour market.