In calculating the social rate of return on a human capital investment one would:

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Treating public subsidies to education as a part of the costs is necessary to accurately calculate the social rate of return. This is because public subsidies represent a cost to society, even if they are not a direct monetary cost to the individual receiving the education. Deducting taxes from incremental earnings is also important to accurately calculate the net benefits of the investment. Excluding any external benefits associated with the investment would result in an incomplete calculation, as these benefits can have significant impacts on society as a whole. Treating public subsidies to training as part of the benefits may overestimate the benefits of the investment.

In Calculating the Social Rate of Return on a Human