IV.B Education and Development Carleton University ECON 3508 (Text, Chapter 8, pp ] 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 Development Greater 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? Where does one get it?

What is Education? “ All forms of learning and improving human knowledge and capabilities” “ All forms of learning and improving human knowledge 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, working On our own, learning by doing. studying, working At play On the job; at work At play On the job; at work In conversation In our communities In conversation In our communities Formal Formal 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 Education

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 Capital The economist’s term for the knowledge and skills that workers acquire through education, training, and experience. Produced through investment in people E xamples: formal education, health, informal education,sanitation, family environmentwater availability, nutrition,

Education and Development In general: Education promotes development and Development promotes education ? How does education promote development ?

Education and Development 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 via nutrition, health, child-care spill-overs or “externalities” Improved parental, esp. mothers’ education builds “human capital” of children; e.g. via nutrition, health, child-care spill-overs or “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 Education Does development promote education? 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” Higher lifetime earnings Higher lifetime earnings Greater potential for participation Greater 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 Benefits Social Benefits  Improved productivity benefits all  Improved nutrition, health, child-care spill-overs or “externalities”, especially from women’s education  Improved potential for tech change and productive entrepreneurship  More effective political participation? Social Costs Social Costs Resources dedicated to education Resources dedicated to education Opportunity costs to society Opportunity 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 can worsen income distribution Note that formal education systems can 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 Education: Gross Enrollment Ratios Primary Secondary Tertiary Source: World Bank, World Development Indicators, 2009

MDG Goals and Achievement: Education

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

Educational Issues 1. Achieving 100% primary school enrollments 2. Expanding secondary enrolments 3. Expanding tertiary education 4. Equal access to education for girls and women 5. Child labour and education 6. Relevance of curricula; especially in rural areas; balancing supply of graduates with demand for labour 7. Financial and equity issues 8. “Balance” among primary, secondary and tertiary education 9. Improving Quality Education, Internal Migration, and the Brain Drain

Educational Issues 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 Primary Secondary Tertiary

Participation in Education for Some African Countries, 2007 CountryPrimarySecondaryTertiaryAdult Literacy M F South Africa Ghana Kenya10650Na Zimbabwe10140Na95 88 Botswana Nigeria Malawi Ethiopia91303Na D. R. Congo85334Na All Africa Source: UNDP. Human Development Report, 2007/2008

Educational Issues., continued 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 MDG Goals and Achievement: Gender Disparities

Educational Issues, continued 4. Expanding Tertiary Education High cost High cost Quality issue Quality issue Equity issue Equity issue Brain drain issue Brain 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 issues How should costs be shared between society and individual for higher education? [Hint: Observe social and private costs and benefits] Educational Issues, continued

Public Expenditure per Student per Year as a Percent of GDP pc CountryPrimarySecondaryTertiary Botswana16.1%41.2%440.6% Burundi Ghana Mauritius Niger Rwanda South Africa Canada na USA 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 and tertiary education What should be the relevant emphases 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 ?

E ducation, Migration and various “Brain Drains”