[Excerpt] In this paper, we construct a model of the demand for education in relation to labor market conditions in less developed countries to try to understand why a high demand for education might be expected to persist in countries characterized by a substantial surplus of educated labor. It might be argued that the continued demand for education merely reflects the failure of citizens to adjust their behavior to current labor market conditions. This position implies that the demand for education will fall, perhaps drastically, as expectations come into line with reality. However, in contrast to this position, we demonstrate in this paper that under several alternative labor market scenarios the sustained private demand for education is quite rational and can be explained by the net private benefits which the educated individual receives in the labor market.