IV.B Education and Development

Carleton UniversityECON 3508

(Text, Chapter 8, pp. 382-406]

October 21, 2015

Arch Ritter

The Central Roles of Education and Health

Health and education are important objectives of development, as reflected in Amartya Sen’s capability approach, and in the core values of economic development

Health and education are also important components of growth and development

Education and Health as Joint Investments for Development These are mutually supportive

investments in the same individual;

Greater health capital may improve the returns to investments in education Health is a factor in school attendance Healthier students learn more

effectively A longer life raises the rate of return

to education Healthier people have lower

“depreciation of education capital”

Education and Health as Joint Investments for DevelopmentGreater education capital may improve the returns to investments in health

Public health programs need knowledge learned in school

Basic hygiene and sanitation may be taught in school

Education is needed in training of health personnel

Better educated mothers tend to have healthier children at any income level

Improving Health and Education: Why Increasing Incomes Is Not

Sufficient Increases in income often do lead to

substantial increases in investment in children’s education and health But higher incomes certainly can help at

the family and national level

Significant market failures in education and health require policy action Signifying a need for major Government

roles everywhere

What is Education?What is Education?

Where does one get it?Where does one get it?

What is Education?What is Education? ““All forms of learning and improving human knowledge All forms of learning and improving human knowledge

and capabilities”and capabilities” Education =/= “Schooling”Education =/= “Schooling” Types of education:Types of education:

Informal:Informal: At home, from our parents and family, friends……. At home, from our parents and family, friends……. On our own, learning by doing. studying, workingOn our own, learning by doing. studying, working At playAt play On the job; at work On the job; at work In conversationIn conversation In our communities In our communities

FormalFormal At “day-care”, school, college, university, classes…At “day-care”, school, college, university, classes… Employee training Employee training Formal apprenticeships Formal apprenticeships

The Functions of The Functions of EducationEducation

The Functions of The Functions of EducationEducation General socialization; Ethical Understanding the world and ourselves Community & citizenship

responsibility Fundamental personal empowerment Improvement in personal and family

quality of life “Joy of learning”…an “end” in itself“Human capital”: of relevance

here

Human CapitalHuman Capital

The economist’s term for the knowledge and skills that workers acquire through education, training, and experience.

Produced through investment in people

Examples:

formal education, health,

informal education, sanitation,

family environment water availability, nutrition,

Education and Education and DevelopmentDevelopment

In general: Education promotes development and Development promotes education

How does education promote development??

Education and Education and DevelopmentDevelopment

How does education promote development? Basic literacy and numeracy are

indispensible for coping and survival in the modern world

Generates skills of all sorts needed in the economy

Improved parental, esp. mothers’ education builds “human capital” of children; e.g. via nutrition, health, child-care spill-overs or via nutrition, health, child-care spill-overs or “externalities”“externalities”

May improves quality and scope of entrepreneurship on farms and in other economic activities

But education on its own will not “produce” development;

Public policy mess-ups, institutional stupidities and political dysfunction all can overwhelm good education and produce stagnation and contraction

Development and Development and EducationEducation

Does development promote Does development promote education?education?

How?How?

Education and Development

How does development promote education? Development (sustainable material

improvement plus equity) generates the resources that can improve and support education

• Growth leads to increased tax revenues for public education expenditures;

• Higher family incomes permit increased family financing of education

• Technological and structural change provide opportunities for further and enhanced learning

8.5 Educational Systems and Development

Educational supply and demand: the relationship between employment opportunities and educational demands;

“Education Certification”: - continuous up-grading of job entry

requirements for jobs previously filled with less-educated workers;

- relevant for developing and developed countries.

Analyzing Education: Costs and Benefits, Private and Social

Private Costs and Benefits:Private Costs and Benefits:

Social Costs and Benefits” Social Costs and Benefits”

Analyzing Education: Costs and Benefits, Private and Social

Private Benefits:Private Benefits:• Personal empowerment: Personal empowerment:

knowledge, skills, “learning to learn”knowledge, skills, “learning to learn”• Higher lifetime earningsHigher lifetime earnings• Greater potential for participationGreater potential for participation• Consumption benefits?Consumption benefits?

Private Costs Private Costs • Hard work (also maybe a private benefit).Hard work (also maybe a private benefit).• Earnings foregone (opportunity cost) Earnings foregone (opportunity cost) • Direct costs (fees, supplies, board & lodging)Direct costs (fees, supplies, board & lodging)

Analyzing Education: Costs and Benefits, Private and Social

Social BenefitsSocial Benefits Improved productivity benefits allImproved productivity benefits all Improved nutrition, health, child-care spill-overs or Improved nutrition, health, child-care spill-overs or

“externalities”, especially from women’s education“externalities”, especially from women’s education Improved potential for tech change and productive Improved potential for tech change and productive

entrepreneurship entrepreneurship More effective political participation?More effective political participation?

• Social CostsSocial Costs Resources dedicated to educationResources dedicated to education Opportunity costs to societyOpportunity costs to society

Investing in Education and Health: The Human Capital

Approach Initial investments in health or

education lead to a stream of higher future income

The present discounted value of this stream of future income is compared to the costs of the investment

Private returns to education are high, and may be higher than social returns, especially at higher educational levels

Figure 8.1 Age-Earnings Profiles by Level of Education: Venezuela

Figure 8.2 Illustration of the Financial Trade-Offs in the Decision to Continue

through Secondary School

Psacharopoulos and Patrinos, 2005

Figure 8.6 Private versus Social Benefits and Costs of Education: An Illustration

8.5 Educational Systems and Development

Distribution of Education Lorenz curves for the distribution of

education

Education, Inequality, and Poverty Note that formal education systems Note that formal education systems

can worsen income distributioncan worsen income distribution

Lorenz Curves and Gini Coefficients for Education in India and South Korea, 1990

Gini Coefficients for Education in 85 Countries

Trends in African Trends in African Education:Education:

Gross Enrollment RatiosGross Enrollment Ratios197

0200

02007 201

1Primary 51.

081.7 94.0 100.

3Secondary

6.3 25.7 30.0 40.3

Tertiary 0.8 3.6 5.5 6.2Source: World Bank, World Development Indicators, 2009

MDG Goals and

Achievement: Education

Figure 8.4 Youth Figure 8.4 Youth Literacy Rate, 2008Rate, 2008

Educational Issues1.1. Achieving 100% primary school enrollmentsAchieving 100% primary school enrollments

2.2. Expanding secondary enrolmentsExpanding secondary enrolments

3.3. Expanding tertiary educationExpanding tertiary education

4.4. Equal access to education for girls and womenEqual access to education for girls and women

5.5. Child labour and educationChild labour and education

6.6. Relevance of curricula; especially in rural areas; Relevance of curricula; especially in rural areas; balancing supply of graduates with demand for balancing supply of graduates with demand for labourlabour

7.7. Financial and equity issuesFinancial and equity issues

8.8. ““Balance” among primary, secondary and tertiary Balance” among primary, secondary and tertiary educationeducation

9.9. Improving QualityImproving Quality10. Education, Internal Migration, and the Brain Drain

Educational Issues1. Achieving 100% primary school

enrollments; almost complete

2. Expanding secondary and tertiary education

Major achievements so far in these areas:

But note

Africa:

gross enrollment ratios

Unevenness of advances among countries

1970

2000

2007 2011

Primary 51.0

81.7

94.0 100.3

Secondary

6.3 25.7

30.0 40.3

Tertiary 0.8 3.6 5.5 6.2

Participation in Education for Some African Countries, 2007

Country Primary

Secondary

Tertiary

Adult LiteracyM F

South Africa

103 96 15 89 87

Ghana 96 49 6 72 58

Kenya 106 50 Na Na

Zimbabwe

101 40 Na 95 88

Botswana

107 76 5 83 83

Nigeria 97 32 10 80 64

Malawi 126 28 0 79 65

Ethiopia 91 30 3 Na

D. R. Congo

85 33 4 Na

All Africa 94 32 5 71 54

Source: UNDP. Human Development Report, 2007/2008

Educational Issues., continued

3. 3. Equal access to education for girls and women, especially in East Asian and some African countries

Why the imbalances? Cultural traditions in some countries; “At home” tradition for women; Early withdrawal

for work at home Income potentials for males vis-a-vis females

outside the home? Lack of resources Policy approach of governments Early pregnancies; early marriage

The Gender Gap: Discrimination in Education Closing the educational gender gap is

important because: The social rate of return on women’s

education is higher than that of men in developing countries

Education for women increases productivity, lowers fertility

Educated mothers have a multiplier impact on future generations

Education can break the vicious cycle of poverty and inadequate schooling for women

Good news: MDG goal on educational parity is close to achievement; major progress in every region

Gender disparity is measured by the ratio of girls to boys enrolled in primary and secondary schools. Most regions are on track to achieve this target by 2015.

MDG Goals and

Achievement: Gender

Disparities

Educational Issues, continued

4. Expanding Tertiary 4. Expanding Tertiary EducationEducation

High costHigh cost Quality issueQuality issue Equity issueEquity issue Brain drain issueBrain drain issue Curriculum relevance?Curriculum relevance?

5. Child Labor

Child labor is a widespread phenomenon

Children need to learn to work; but when does this become exploitative and “counter-developmental”?

Government intervention may be necessary

Sometimes this shift can be self-enforcing, so active intervention is only needed at first

Other approaches to child labor policy

Get more children into school e.g. new village schools; and enrollment incentives for parents

Consider child labor an expression of poverty, so emphasize ending poverty generally (a traditional World Bank approach, now modified)

If child labor is inevitable in the short run, regulate it to prevent abuse and provide support services for working children (UNICEF approach)

Ban child labor; or if impossible, ban child labor in its most abusive forms (ILO strategy;)

Activist approach for high income countries: trade sanctions vs. LDCs that permit child labour

Concerns: could backfire when children shift to informal sector; and if modern sector growth slows

Educational Issues, continued

6. Relevance of curricula; especially in rural areas

Are “school-leavers” also “village-leavers”? (Rural brain drain?)

“Education for Development”

7. Financial and equity issues7. Financial and equity issues

How should costs be shared between How should costs be shared between society and individual for higher society and individual for higher education? education?

[Hint: Observe social and private costs [Hint: Observe social and private costs and benefits]and benefits]

Educational Issues, continued

Public Expenditure per Student per Year as a Percent of GDP pc

Country Primary

Secondary Tertiary

Botswana 16.1% 41.2% 440.6%

Burundi 20.0 77.5 363.1

Ghana 18.4 29.1 213.4

Mauritius 10.3 17.4 40.4

Niger 28.7 46.1 371.4

Rwanda 10.2 365.1 372.8

South Africa 15.6 16.7 44.3

Canada na na na

USA 22.2 24.6 26.0

Source:: World Bank, World Development Report, 2009, Table 2.11

Re. 7 and 8: The Issue of Balance and Fairness among Levels of Education

8. “Balance” among primary, secondary 8. “Balance” among primary, secondary and tertiary educationand tertiary education

What should be the relevant emphases What should be the relevant emphases placed on these?placed on these?

Educational Issues, continued

Educational Issues, cont’d:

9. Improving Quality while the systems expand rapidly

A Major task. How can this be done??

9. Improving Quality while the systems expand rapidly. How can this be done?? Increase resource allocations (from Taxation via

economic growth)

Easily said, hard to do; Relevance of economic growth to undergird tax increases

and education

Better teacher training; Better salaries to incentivate good full-time work Improve ability of children to learn

(nutrition at school sometimes)

Concentrate attention on primary schools ? Reconsider financing for higher education ?

10. 10. Education, Migration and various “Brain Drains”