J.CuiDevelopment Workshop1 Why Governments Should Invest More to Educate Girls Jinjie Cui (Eric) Faculty of Economic Science University of Warsaw 12th November, 2009

J.CuiDevelopment Workshop2 The Planning for today 1. Highlight the main idea of the paper - Private wage returns to schooling of women and men - Externalities of women’s and men’s schooling - Public finance and implications for taxation - Policy options to increase the schooling of women 2. What questions can we raise? 3. Conclusions

J.CuiDevelopment Workshop3 1.1 Private wage returns to schooling of women and men Gap between men’s and women’s years of schooling can be a indicator of human capital, evidence of wage differences among males in US by their schooling & age (Becker, 1964). To construct a measure of productivity of women with different years of schooling is to be able to explain women decide to work outside of their family for a wage (Heckman,1980). Three determinants of female labor force participation: 1) woman’s market wage opportunities proxied by schooling and age; 2) her source of non- earned income & her market labor supply; 3) the wage opportunities of her husband or extended family (Schultz, 1995a; Smith,1980; Heckman,1980). The Correlation between years of schooling and log wages to disentangle the true causal effect that should inform public policy and would represent the labor productivity effect that society could expect when it increase the schooling of representative member of the population (Griliches,1977).

J.CuiDevelopment Workshop4 Family wealth could also merely increase the demand for children’s human capital for consumption purposes (Becker,1967; Jacoby,1994; NaRanong,1998). Wage returns to health (Schultz,1995b). Psacharopoulos and Woodhall (1985) noted that the highest returns to schooling in the low-income world occur at the primary school level, where most of the world’s population reside and that returns tend to decline at secondary and higher educational levels, particularly when social returns include public school expenditures.

J.CuiDevelopment Workshop5 1.2 Externalities of women’s and men’s schooling At the macro economic level, schooling has been the most powerful “nontraditional” input discovered to explain the puzzle of modern economic growth (Denison,1962; Jorgenson,1995; Kuznets,1966; Schults,1961). Mother’s schooling will have a larger beneficial effect on a child’s health, schooling, and adult productivity than would adding to a father’s schooling by the same amount (Alderman & King,1998; Haddad, Hoddinott & Alderman,1997; Quisumbing,1995; Schultz,2001; Strauss & Beegle,1996; Thomas,1990,1994). Women’s schooling and their children’s is due to the marriage matching process and can be attributed to men’s preferences rather than to women’s differential productivity in schooling their children, evidence from rural Bangladesh and India (Behrman, et al.,1997; Foster 1996). Another potential externality of schooling relates to fertility which is widely found to be inversely related to women’s schooling (Cochrane,1979; Schultz,1973,1981,1997)

J.CuiDevelopment Workshop6 Increments to the schooling of men, holding constant the educational attainment of women, are associated in low-income countries with increases in fertility, although this pronatal effect of male education seems to diminish as the country develops (Schult,1973, 1994, 1997). Rural India found that mother’s literacy and some primary schooling had a larger effect on the child’s school work and attainment than did her post-primary schooling, suggesting higher social returns for the most basic level of female schooling (Behrman et al.,1997).

J.CuiDevelopment Workshop7 1.3 Public finance and implication for taxation Differences between the market labor supply elasticity of men and women could influence the efficient design of a tax system for individuals and families and thereby modify social priorities for subsidizing the schooling of women versus men (Apps & Rees,1988; Boskin & Sheshinski,1983). The female schooling effect is to increase directly women’s own labor supply and market earnings tax base (Killingsworth,1983;Schultz,1981). From a public finance perspective, the increased schooling of women can be expected to increase the participation of women in the market labor force and thereby broaden the society’s tax base.

J.CuiDevelopment Workshop8 1.4 Policy options to increase the schooling of women Culture-specific institutions may be designed to demonstrate how family welfare is enhanced by education females and allowing them access to managerial, nonagricultural, and extra-familial jobs. The traditional approach to increase female enrollments has been to reduce the cost of schooling to parents, by building schools closer to the population they serve, reducing tuition fees specifically for females, providing girls with subsidies for their school uniforms or school feeding programs, and extending fellowship for girls to attend boarding school. Public expenditures on female schools, female teachers and female oriented facilitates contribute cost-effectively to increase the educational attainment of women.

J.CuiDevelopment Workshop9 2. What questions can we raise? Would subsidies for girls’ education repay the pubic sector and shift the gender balance of enrollment rates in families? How does a society intervene and design a culturally acceptable program to change this pattern of lifetime allocation of women’s time? How effective can we increase girls year of schooling and engage women’s employment in the wage labor force in West Asia and Middle East, so-called Moslem world?

J.CuiDevelopment Workshop10 3. Conclusions Private returns to an additional year of schooling for the representative female exceed those for the representative male, and social returns that factor in public expenditures on schooling are even more favorable to a general increase in female relative to male enrollments. Population growth is thought to impose social costs, female schooling should be assigned a higher priority than male schooling, other things being equal.

J.CuiDevelopment Workshop11 Source: Paper: Schultz, T. Paul. (2002). Why Governments Should Invest More to Educate Girls? World Development Vol.30, No.2, pp

J.CuiDevelopment Workshop12 Questions??? Thank you for your attention!!!