1. Chapter 8 Human Capital: Education and Health in Economic Development

2. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-2 The Central Roles of Education and Health n Health and education are important objectives of development n Health and education are also important components of growth and development

3. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-3 Education and Health as Joint Investments for Development n Greater health capital may improve the returns to investments in education n Greater education capital may improve the returns to investments in health

4. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-4 Improving Health and Education: Why Increasing Incomes Is Not Sufficient n Increases in income often do not lead to substantial increases in investment in children’s education and health n Better educated mothers tend to have healthier children n Significant market failures in education and health require policy action

5. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-5 Investing in Health and Education: The Human Capital Approach n Initial investments in health or education lead to a stream of higher future income

6. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-6 Figure 8.1

7. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-7 Investing in Health and Education: The Human Capital Approach n Initial investments in health or education lead to a stream of higher future income n The present discounted value of this stream of future income is compared to the costs of the investment

8. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-8 Figure 8.2

9. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-9 Investing in Health and Education: The Human Capital Approach n Initial investments in health or education lead to a stream of higher future income n The present discounted value of this stream of future income is compared to the costs of the investment n Private returns to education are high, and may be higher than social returns

10. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-10 Table 8.1

11. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-11 Child Labor n Child labor is a widespread phenomenon n The problem may be modeled using the “multiple equilibria” approach n Government intervention may be called for to move to a ‘better’ equilibrium

12. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-12 Figure 8.3

13. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-13 The Gender Gap: Women and Education n Young females receive less education than young males in nearly every LDC

14. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-14 Table 8.2

15. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-15 The Gender Gap: Women and Education n Young females receive less education than young males in nearly every LDC n Closing this educational gender gap is economically desirable n Consequences of gender bias in health and education

16. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-16 Figure 8.4

17. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-17 Educational Systems and Development n Educational supply and demand: the relationship between employment opportunities and educational demands n Social versus private benefits and costs

18. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-18 Figure 8.5

19. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-19 Educational Systems and Development n Educational supply and demand: the relationship between employment opportunities and educational demands n Social versus private benefits and costs n Distribution of education

20. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-20 Figure 8.6

21. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-21 Figure 8.7

22. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-22 Educational Systems and Development n Educational supply and demand: the relationship between employment opportunities and educational demands n Social versus private benefits and costs n Distribution of education n Education, inequality, and poverty

23. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-23 Table 8.3

24. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-24 Educational Systems and Development n Educational supply and demand: the relationship between employment opportunities and educational demands n Social versus private benefits and costs n Distribution of education n Education, inequality, and poverty n Education, internal migration, and the brain drain

25. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-25 Health Systems and Development n Measurement and distribution

26. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-26 Figure 8.8

27. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-27 Health Systems and Development n Measurement and distribution n Disease burden

28. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-28 Figure 8.9

29. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-29 Health Systems and Development n Measurement and distribution n Disease burden n Malaria and parasitic worms n HIV and AIDS

30. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-30 Table 8.4

31. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-31 Table 8.5

32. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-32 Health Systems and Development n Measurement and distribution n Disease burden n Malaria and parasitic worms n HIV and AIDS n Health and Productivity

33. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-33 Figure 8.10

34. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-34 Figure 8.11

35. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-35 Health Systems and Development n Measurement and distribution n Disease burden n Malaria and parasitic worms n HIV and AIDS n Health and Productivity n Health systems policy

36. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-36 Figure 8.12

37. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-37 Policies for Health, Education, and Income Generation n Integrated programs for the promotion of health, education, and nutrition status in poor families n Links between health and education programs and microcredit programs

38. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-38 Concepts for Review n AIDS n Basic education n Brain drain n Derived demand n Educational certification n Educational gender gap n Enrollment ratios, gross and net n Human capital n Human immunodeficiency virus n Literacy

39. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 8-39 Concepts for Review (cont’d) n Private benefits of education n Private costs of education n Social benefits of education n Social costs of education n World Health Organization