ECONOMICS RESEARCH PAPER

Relationship between Education, Health and Wages

Project Submitted To:
Ms. ERITRIYA ROY
(FACULTY OF ECONOMICS)

Submitted By:
Nikhil Parthsarthi
B.A. LLB (HONOURS)
Semester I
Section - A
Roll No: 91

HIDAYATULLAH NATIONAL LAW UNIVERSITY

RAIPUR, CHHATTISGARH
ACKNOWLEDGMENTS

I, Nikhil Parthsarthi, would like to humbly present this project to Ms. Eritriya Roy. I would first
of all like to express my most sincere gratitude to Ms. Eritriya Roy for her encouragement and
guidance regarding several aspects of this project. I am thankful for being given the opportunity
of doing a project on Relationship between Education, Health and Wages.
I am thankful to the library staff as well as the IT lab staff for all the conveniences they
have provided me with, which have played a major role in the completion of this paper.
I would like to thank God for keeping me in good health and senses to complete this
project.
Last but definitely not the least, I am thankful to my seniors for all their support, tips and
valuable advice whenever needed. I present this project with a humble heart.

NIKHIL
PARTHSARTHI

SEMESTER I, SECTION A, ROLL NUMBER 91

BA LLB (HONS.)

Declaration
I, Nikhil Parthsarthi, hereby declare that, this project report entitled, Relationship between
Education, Health and Wages submitted to Hidayatullah National Law University, Raipur is
record of an original work done by me under the guidance of Ms. Eritriya Roy , Faculty
Member, H.N.L.U., Raipur and that no part of this work has been plagiarized without citations.

...
(Nikhil Parthsarthi)

Date:

TABLE OF CONTENTS
1)
2)
3)
4)
5)
6)

7)
8)
9)

ACKOWLEDGMENTS..1
CERTIFICATE OF DECLARATION...2
OBJECTIVES...4
RESEARCH METHODOLOGY5
INTODUCTION .6-7
5.1) ORIGIN OF NABARD6
5.2) FUNCTIONS OF NABARD7
CREDIT FACILITIES OFFERED BY NABARD..8-13
6.1) RURAL INFRASTRUCTURE DEVELOPMENT FUND...8
6.2) KISAN CREDIT CARD.10
6.3) RURAL INNOVATION FUND.11
6.4) SELF HELP GROUP BANK LINKAGE MODEL.11
6.5) RURAL HOUSING FUND 12
NABARDS PERFORMANCE......13
7.1) PAST PERFORMANCE.14
7.2) PRESENT PERFORMANCE15
CONCLUSION17
REFERENCES18

OBJECTIVES

I.

To give a brief background of the origin of Health, Education and Wages, and
highlight its basic functions.

II.

To study in detail the relationships between Health, Education and Wages.

III.

To access the relationship with adequate data and details.

RESEARCH METHODOLOGY

NATURE OF RESEARCH
This research work is descriptive and Analytical in nature. It describes the relationship between
Education, Health and Wages.
SOURCES OF DATA
This study is done with the help of secondary data. This secondary information has been
obtained from published sources such as books, journals, newspapers, official websites,
government publications etc.
MODE OF CITATION
A uniform mode of citation has been adopted and followed consistently throughout this paper.

INTRODUCTION
There is a very popular proverb Health is Wealth.In this modern era, Health and Education
play a very importanrole.Both Health and Education go hand in hand and with better Education
implies a better wage.Thus, Health, Eduacation and Wages are related to each other.
To get a better perspective,the definition are as follows:
Health:
Health is the level of functional or metabolic efficiency of a living organism. In humans, it is the
general condition of a person's mind and body, usually meaning to be free from illness, injury or
pain (as in "good health" or "healthy").1 The World Health Organization (WHO) defined health
in its broader sense in 1946 as "a state of complete physical, mental, and social well-being and
not merely the absence of disease or infirmity.2

Education:
Education in its general sense is a form of learning in which the knowledge, skills, and habits of
a group of people are transferred from one generation to the next through teaching, training, or
research. Education frequently takes place under the guidance of others, but may also be
autodidactic.3

Wages:
1"Dictionary "Health"". Merriam-Webster.As on 4th October,2014
2World Health Organization. WHO definition of Health, Preamble to the Constitution of the World Health
Organization as adopted by the International Health Conference, New York, 1922 June 1946; signed on
22 July 1946 by the representatives of 61 States (Official Records of the World Health Organization, no.
2, p. 100)
3Dewey, John (1916/1944). Democracy and Education. The Free Press. pp. 14. ISBN 0-684-83631-9.

A wage is monetary compensation (or remuneration) paid by an employer to an employee in

exchange for work done. Payment may be calculated as a fixed amount for each task completed
(a task wage or piece rate), or at an hourly or daily rate, or based on an easily measured quantity
of work done.

RELATIONSHIP BETWEEN EDUCATION AND HEALTH

There can be broad explanations for the association between health and education, although they
recognize that these do not represent an exhaustive list. The first is that poor health leads to
lower levels of schooling, since poor health in childhood is linked to poor health in adulthood.
However, it is unlikely that the correlation between child health and adult health fully explains
the relationship between adult health and completed education. Because few children in the U.S.
fail to attend school solely because of illness, one would anticipate the relationship between
education and health to weaken over time. However, this relationship has strengthened,
suggesting that poor health alone cannot explain the relationship between education and health.
The second potential explanation is that additional factors, such as family background or
individual differences, both increase schooling and improve health. Some researchers suggest
that the relationship between education and health can be explained by unobserved factors and
skills, such as the ability to delay gratification, that make better educated individuals healthier..
The third potential explanation for the link between education and health is that increased
education directly improves health. Quasi-natural experiments have demonstrated causal
influences of various changes in educational policies and of maternal education on health
outcomes and also that increasing own education improves ones own health. However these
natural experiments have not considered the quality of schooling. Furthermore, experiments tend
to use study participants whose characteristics differ from those of the rest of the population,
making it difficult to generalize the findings beyond the research samples.
There is a direct relationship between education and healthbetter educated individuals have
more positive health outcomes. This association remains substantial and significant even after
controlling for job characteristics, income, and family background. This suggests that
educational policies have the potential to substantially improve health.

Fig I:Relationship between Health and Education4

4http://content.gallup.com/origin/gallupinc/GallupSpaces/Production/Cms/ADGC/cqdl
1tabqum6omnl8khehq.png accessed on 4th October,2014

RELATIONSHIP BETWEEN EDUCATION AND WAGE

Education plays a central role in modern labor markets. Hundreds of studies in many different
countries and time periods have confirmed that better-educated individuals earn higher wages,
experience less unemployment, and work in more prestigious occupations than their lesseducated counterparts.
Higher levels of education are expected to be associated with higher levels of labour productivity
for two reasons:
Education leads to the accumulation of skills that make workers more productive. Such skills
can be job-specific (for example, skills learned from plumbing or medical qualifications) or
broad (for example, literacy and numeracy) and thus increasing wages for them.
Employers might choose to employ highly educated workers because education can be a
marker of unobservable characteristics such as work ethic and intrinsic motivation. These
characteristics are associated with higher productivity. This is referred to as the signalling effect
of education.

Education plays a central role in modern labor markets. Hundreds of studies in many different
countries and time periods have confirmed that better-educated individuals earn higher wages,
experience less unemployment, and work in more prestigious occupations than their lesseducated counterparts.

Fig 2:Showing different wages for people with different educational qualifications 5

Fig 3:Median earning with respect to educational attainment6

5http://www.huffingtonpost.com/steven-strauss/the-connection-betweened_b_1066401.html accessed on 4th October,2014
6http://www.soc101.com/ accessed on 4th October,2014

RELATIONSHIP BETWEEN HEALTH AND WAGE

The quality of health conditions is one of important factors for human capital accumulation.
The concept of human capital is also developed in traditional economics to explain the impact
the enhancement of human capital which may have on the overall country, companies, and
individuals. In short, the so-called human capital is the skilled labor, with knowledge or skills,
formal education, on-job training, good health conditions. It is different from simply raw labor
because it is not only to count on the labor hours, but pay more attention to the quality of
workers. As for an individual, it contributes to the accumulation of knowledge and skills, the
promotion of productivity, and benefits the individuals performance in the labor market.
Therefore, the theory of human capital explains wage differences in the labor market by the
amount of human capital stock.
The relationship between health status and wage rate can be explained in the following:
(1) the better a worker's health, the higher marginal productivity one will increase in his labor
work. In turn, the enhancement of productivity will generate positive benefit for his wage.
(2) The employers count on individuals traits to make decisions on the wage level of employees
if they could not be informed of their productivity. Health is one of important indicators of these
traits. The employers tend to expect that healthier employees are with higher productivity. That is
why the employers are willing to pay more for those healthier employees.
(3) The workers with poor health, regardless whether their productivity is actually low or not, it
is often for them to be treated discriminatively in the labor market for lower payments.
Recent studies found that health has a significant impact on the labor market.
For example, to enter the labor market or not, the choice of work, working hours, wage and
payment and so on are subject to health conditions.

Fig 4:Mean wages by physical and mental health measures7

7Household, Income and Labour Dynamics of Australia (HILDA) Survey, Waves 15.
Accessed on 4th October,2014

CONCLUSION

REFERENCES

1.