1. Chapter 9 Slide 1 Copyright © 2003 Pearson Education, Inc.

2. Chapter 9 Slide 2 Copyright © 2003 Pearson Education, Inc. Human Capital: Education and Health in Economic Development Chapter 9

3. Chapter 9 Slide 3 Copyright © 2003 Pearson Education, Inc. 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

4. Chapter 9 Slide 4 Copyright © 2003 Pearson Education, Inc. 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

5. Chapter 9 Slide 5 Copyright © 2003 Pearson Education, Inc.

6. Chapter 9 Slide 6 Copyright © 2003 Pearson Education, Inc. International Trends and Convergence in Health and Education n Enrollment rates have improved worldwide n teacher-pupil ratios have increased in many regions n Average years of schooling has increased in all regions n Infant mortality is down; life expectancy is up in all regions

7. Chapter 9 Slide 7 Copyright © 2003 Pearson Education, Inc.

8. Chapter 9 Slide 8 Copyright © 2003 Pearson Education, Inc.

9. Chapter 9 Slide 9 Copyright © 2003 Pearson Education, Inc. 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

10. Chapter 9 Slide 10 Copyright © 2003 Pearson Education, Inc. Investing in Health and Education: The Human Capital Approach n Initial investments in health or education lead to a stream of higher future income

11. Chapter 9 Slide 11 Copyright © 2003 Pearson Education, Inc. Figure 9.1 Age-Earnings Profiles by Level of Education -Venezuela, 1989

12. Chapter 9 Slide 12 Copyright © 2003 Pearson Education, Inc. 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

13. Chapter 9 Slide 13 Copyright © 2003 Pearson Education, Inc. Figure 9.2 The Financial Tradeoffs in the Decision to Continue in School

14. Chapter 9 Slide 14 Copyright © 2003 Pearson Education, Inc. 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

15. Chapter 9 Slide 15 Copyright © 2003 Pearson Education, Inc.

16. Chapter 9 Slide 16 Copyright © 2003 Pearson Education, Inc. 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

17. Chapter 9 Slide 17 Copyright © 2003 Pearson Education, Inc. Figure 9.3 Child Labor as a Bad Equilibrium

18. Chapter 9 Slide 18 Copyright © 2003 Pearson Education, Inc. The Gender Gap: Women and Education n Young females receive less education than young males in nearly every LDC

19. Chapter 9 Slide 19 Copyright © 2003 Pearson Education, Inc.

20. Chapter 9 Slide 20 Copyright © 2003 Pearson Education, Inc. 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

21. Chapter 9 Slide 21 Copyright © 2003 Pearson Education, Inc. Figure 9.4 Female-Male Ratios in Total Population in Selected Communities

22. Chapter 9 Slide 22 Copyright © 2003 Pearson Education, Inc. Educational Systems and Development n Educational supply and demand: the relationship between employment opportunities and educational demands n Social versus private benefits and costs

23. Chapter 9 Slide 23 Copyright © 2003 Pearson Education, Inc. Figure 9.5 Private versus Social Benefits and Costs of Education: An Illustration

24. Chapter 9 Slide 24 Copyright © 2003 Pearson Education, Inc. 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

25. Chapter 9 Slide 25 Copyright © 2003 Pearson Education, Inc. Figure 9.6 Education Lorenz Curves for India and Korea, 1990

26. Chapter 9 Slide 26 Copyright © 2003 Pearson Education, Inc. Figure 9.7 Education Gini Coefficients for 85 Countries,1990

27. Chapter 9 Slide 27 Copyright © 2003 Pearson Education, Inc. 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

28. Chapter 9 Slide 28 Copyright © 2003 Pearson Education, Inc.

29. Chapter 9 Slide 29 Copyright © 2003 Pearson Education, Inc. 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

30. Chapter 9 Slide 30 Copyright © 2003 Pearson Education, Inc. Health Systems and Development n Measurement and distribution

31. Chapter 9 Slide 31 Copyright © 2003 Pearson Education, Inc. Figure 9.8 Mortality of Children Two Years Old and Younger by Wealth, Brazil,1996

32. Chapter 9 Slide 32 Copyright © 2003 Pearson Education, Inc. Health Systems and Development n Measurement and distribution n Disease burden

33. Chapter 9 Slide 33 Copyright © 2003 Pearson Education, Inc. Figure 9.9 Infant and Adult Mortality in Poor and Nonpoor Neighborhoods of Porto Alegre, Brazil, 1980

34. Chapter 9 Slide 34 Copyright © 2003 Pearson Education, Inc.

35. Chapter 9 Slide 35 Copyright © 2003 Pearson Education, Inc. Health Systems and Development n Measurement and distribution n Disease burden n Malaria and parasitic worms n HIV and AIDS

36. Chapter 9 Slide 36 Copyright © 2003 Pearson Education, Inc.

37. Chapter 9 Slide 37 Copyright © 2003 Pearson Education, Inc.

38. Chapter 9 Slide 38 Copyright © 2003 Pearson Education, Inc. Health Systems and Development n Measurement and distribution n Disease burden n Malaria and parasitic worms n HIV and AIDS n Health and Productivity

39. Chapter 9 Slide 39 Copyright © 2003 Pearson Education, Inc. Figure 9.10 Adult Stature by Birth Cohort

40. Chapter 9 Slide 40 Copyright © 2003 Pearson Education, Inc. Figure 9.11 Wages, Education, and Height of Males in Brazil and the United States

41. Chapter 9 Slide 41 Copyright © 2003 Pearson Education, Inc. 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

42. Chapter 9 Slide 42 Copyright © 2003 Pearson Education, Inc. Figure 9.12 GNP per Capita (U.S.Dollars) and Life Expectancy at Birth, 1994

43. Chapter 9 Slide 43 Copyright © 2003 Pearson Education, Inc. 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

44. Chapter 9 Slide 44 Copyright © 2003 Pearson Education, Inc. 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

45. Chapter 9 Slide 45 Copyright © 2003 Pearson Education, Inc. 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