CHAPTER 9: EDUCATION AND

DEVELOPMENT

STUDENT NAME: DENIZ YILMAZ

STUDENT NUMBER: M0987107

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 A. EDUCATION AND HUMAN RESOURCES

Human resources of a nation determine the character and pace

of its economic and social development. According to professor
Frederick Harbison of Princeton University:

Human resources are the ultimate basis for wealth of nations.

Clearly a country which is unable to develop the skills and
knowledge of its people and to utilize them effectively in the national
economy will be unable to develop anything else.

The formal education system is the principal institutional

mechanism for developing human skills and knowledge.

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 A. EDUCATION AND HUMAN RESOURCES

Most Third World nations believe that; “the more education, the
more rapid the development”. But universal education is politically
sensitive but economically costly.

In many parts of south Asia, Africa and much of Latin America
seems little improved even in a condition of rapidly expanding
enrollments and a lot of investment for educational expenditure
because absolute poverty is chronic and pervasive (Economic
disparities between rich and poor and unemployment &
underemployment problems).This should not be seen as a failure of
formal educational system.

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 A. EDUCATION AND HUMAN RESOURCES

The expansion of formal schooling can greatly distort student

aspirations in modern urban sector and too much investment in formal
schooling can divert scarce resources from more socially productive
activities so it can drag on national development.

The educational system of developing nations are strongly

influenced by the whole nature, magnitude, and character of their
development process.

The role of formal education : imparts the knowledge and skills

that enable individuals to function as economic change agents in their
societies, and imparts values, ideas, attitudes, and aspirations.

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 A. EDUCATION AND HUMAN RESOURCES

The relationship between development and quantitative and

qualitative educational expansions in terms of six basic issues

1. How does education influence the rate, structure, and character of

economic growth? Conversely, how do the rate, structure, and
character of economic growth influence the nature of the
educational system?
2. Does education in general and the structure of LDC educational
systems in particular contribute to or retard the growth of domestic
inequality and poverty?
3.What is the relationship of education to rural-urban migration and
urban unemployment? Are rising levels of the educated unemployed
a temporary or chronic phenomenon?

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 A. EDUCATION AND HUMAN RESOURCES

The relationship between development and quantitative and

qualitative educational expansions in terms of six basic issues

4. The woman lag behind men in educational attainment, and is

there a relationship between the education of woman and their
desired family size?
5. The contemporary formal educational systems tend to promote
or retard agricultural and rural development?
6. What is the relationship, if any, among LDC educational systems
developed country educational systems, and the international
migration of highly educated professional and technical workers
from the less developed to the more developed nations?

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 B. EDUCATION IN DEVELOPING REGIONS

Public Educational Expenditure

In many developing countries formal education is the largest

“industry” and the greatest consumer of public revenues. Poor
nations invested huge sums of money in education. The reasons for
this are the differences between the thinking of literate and illiterate
people or their graduate level.

In developing countries people have made a great effort to

political pressure for the expansion of school places, because
parents have realized the more schooling can bring better chances
for getting secure and well-paid jobs. This is the only hope for poor
children to escape from poverty.

As a result of this forces, there has been a great increase in

public expenditures on education in LDC.
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 B. EDUCATION IN DEVELOPING REGIONS

Enrollments

•Total number of persons enrolled in the three

main levels of education rose from 163 million
to 440 million
1960-1990, Africa,
Asia,the Middle East, •According to total LDC school enrollments,
Latin America the largest part of increase in primary
education with the rate %78. Secondary and
tertiary levels are 12.7%-14.5%.

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TABLE 9.1 Gross Enrollment Ratios in Selected Developing Countries:

Primary,Secondary,Postsecondary Education,1980 and 1995

Numbers Enrolled as a Percentage of Age Group

Primary Secondary Postsecondary

Country 1980 1995 1980 1995 1980 1995
Low-income LDCs
Bangladesh 61 92 18 19 3 4
Ethiopia 36 31 9 11 0 1
Haiti 76 n.a. 14 22 0 1
India 83 100 30 49 5 6
Sri Lanka 103 113 55 75 3 5
Tanzania 93 67 3 5 0 1
Middle-income LDCs
Colombia 124 114 41 67 9 17
Guatemala 71 84 18 25 8 8
Mexico 120 115 49 58 14 14
Philippines 112 116 64 79 24 27
South Korea 110 101 78 101 15 52
Thailand 99 87 29 55 15 20
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Developed countries 102 103 87 104 35 57
 DROPOUT RATES OF THE NATIONS

LEVELS PRIMARY LEVEL SECONDARY LEVEL

In Latin America 75% %18

In Africa 54% 38%

In Asia 20% 18%

In Europe 11.4%

In Certain African 81%

Nations

In Certain Asian %64

Nations

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 B. EDUCATION IN DEVELOPING REGIONS

Literacy
The ability to read, write and comprehend information, is
obviously a fundamental component of human resource
development.

The highest illiteracy rates are found

In south Asia: 50%

In Arab states: 43%
In sub-Saharan Africa:43%
East Asia:16%
Latin America:13%
In North America:1.0%
In Europe: 2.5%

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 B. EDUCATION IN DEVELOPING REGIONS

Costs and Earnings

The imbalance of educational costs are particularly apparent at
various educational levels of LCDs.
TABLE 9.2 Ratios of Total Cost by Educational Level per Student
Year
Relative Cost
Secondary versus Higher versus
Groups of Countries Primary Primary

United States, Great Britain, 6.6 17.6

New Zealand
Malaysia, Ghana, South 11.9 87.9
Korea, Kenya, Uganda,
Nigeria, India

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TABLE 9.3 Ratios of Average Annual Earnings
of Labor by Educational Level.
Relative Cost
Secondary Higher
Groups of versus versus
Countries Primary Primary
United States,Great 1.4 2.4
EARNINGS
Britain, New Zealand
Malaysia,Ghana,Sout 2.4 6.4
h Korea,Kenya,
Uganda,Nigeria India TABLE 9.2 Ratios of Total Cost by Educational
Level per Student Year
Relative Cost
Secondary Higher
Groups of versus versus
Countries Primary Primary
United States,Great 6.6 17.6
COSTS Britain, New Zealand
Malaysia,Ghana,South 11.9 87.9
Korea,Kenya,
Uganda,Nigeria India
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 C. THE GENDER GAP: WOMEN AND EDUCATION

Young females receive less education than young males in almost every
developing country. Female education is so important because of two
important reasons, the one is social inequality, and another one is
educational discrimination against women.
Closing the gender gap by expanding educational opportunities for women
is economically desirable for four reasons:

1. The rate of return on women’s education is higher than on men’s in most

developing countries.
2. Increasing women’s education is the meaning of increases their
productivity and also results greater labor force participation, later
marriage, lower fertility, and greatly improved child health and nutrition.
3. Improved child health and nutrition and more educated mothers lead to
multiplier effects on the quality of a nation’s human resources for many
generations to come.
4. Because women carry an unequal burden of the poverty and
landlessness and this is very widespread in developing countries any
significant improvements in their role and status via education can break
the vicious cycle of poverty and inadequate schooling. 14
 TABLE 9.5 The Educational Gender Gap: Females as a Percentage of
Males
Country Adult Mean Primary Secondary Postsecondar
Literacy Years of Enrollment Enrollment y Enrollment
Schooling

Afghanistan 32 14 52 50 24
Algeria 66 18 89 79 44
Bangladesh 47 29 86 46 19
Egypt 54 41 79 82 52
India 55 34 97 57 45
Mexico 94 96 97 100 76
Morocco 62 37 68 70 58
Nigeria 65 28 93 74 37
South Korea 95 61 100 96 49
Sudan 28 45 71 87 70
ALL LDCs 71 55 91 72 51
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 D. THE ECONOMICS OF EDUCATION AND
EMPLOYMENT

Two fundamental economic processes:

1. The interaction between economically motivated demands
and politically responsive supplies in determining how many
school places are provided, who gets access to these
places, and what kind of instruction they receive; and

2. The important distinction between social and private benefits

and costs of different levels of education and implications of
these differentials for educational investment strategy

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 D. THE ECONOMICS OF EDUCATION AND
EMPLOYMENT

Educational Supply and Demand: The Relationship between

Employment Opportunities and Educational Demands
The amount of schooling by an individual can be largely affected
by demand and supply. On the demand side, there are two principles
that influences on the amount of schooling desired:

1. A more educated student's prospects of earning considerably more

income through future modern sector employment ( the family’s
private benefits of education).

2. The educational costs, both direct and indirect, that a student or

family must bear. The amount of education demanded is thus in
reality a derived demand for high-wage employment opportunities in
the modern sector.

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 Educational Supply and Demand: The Relationship between
Employment Opportunities and Educational Demands

On the supply side, the quantity of school places at the primary,
secondary, and university levels is determined largely by political
processes, often unrelated to economic criteria. Political pressures on
third world countries for greater number of school places, the public
supply of these places is fixed by the level of government educational
expenditures. These are in turn influenced by the level of aggregate
private demand for education.

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 Educational Supply and Demand: The Relationship between
Employment Opportunities and Educational Demands
The amount of schooling demanded determined by the combined
influence of four variables:

1. The wage or income differential: this is the wage differential between jobs
in modern and traditional sector. For entering in modern sector jobs
,someone need to be on the level of completed education but for traditional
sector , education is not required. The greater the income differential
between modern and traditional sectors, the greater the quantity of
education demanded. so the quantity of education directly related to the
modern-traditional sectors wage differentials.

2. The probability of success in finding modern-sector employment: an

individual who completes the necessary schooling, he or she has high
probability of getting well paid urban job. As the probability of success is
related to the unemployment rate, the quantity of education demanded will
be inversely related to the current unemployment rate.

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3. The direct private costs of education: it refers the expenses
of financing a child’s education. These expenses include
school fees, books clothing and related costs. The quantity of
education demanded is related to these direct costs, the
higher the school fees, the lower the private demand for
education, everything else being equal.

4. The indirect or opportunity costs of education: it refers

more than out of pocket costs that when child reaches the age
of which he can make a productive contribution to family
income. For each year child continue his education, he could
expect to earn or produce for the family farm. So we can
understand the relationship between opportunity cost and
quality demanded; the greater the opportunity cost, the lower
the quantity demanded.

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 Educational Supply and Demand: The Relationship between
Employment Opportunities and Educational Demands
Some situations in an less developed countries where the following
conditions prevail:

1. The modern- traditional or urban-rural wage gap id of magnitude of,

say, 100% for secondary versus primary school graduates.

2. The rate of increase in modern-sector employment opportunities for

primary level dropouts is slower than the rate of individuals enter the
labor force. The same may be true at the secondary and even the
university level in countries such as India, Mexico, Egypt, Pakistan,
Ghana, Nigeria, and Kenya.

3. Employers tend to select applicants by level of education. They prefer

to choose secondary education rather than primary.

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 4. Governments tend to give the going wage to the level of
educational attainment of jobholders rather than to the
minimum educational qualification required for the job.

5. School fees at the early primary level are often nominal or

nonexistent. They tend to rise sharply at the late primary and
secondary level and decline at the university level as the state
bears the college student’s costs.

Under these conditions in many developing countries

quantity of education demanded may be substantial because
private benefits of more schooling would be large compared to
the alternative of little or no schooling.

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 Social versus Private Benefits and Costs

In developing countries, the social costs of education increase

rapidly as students climb the educational ladder and it means the
opportunity cost to society As a whole resulting form the need to finance
costly educational expansion at higher levels when these limited funds
might be more used in other sectors of the economy.

The private costs of education increase more slowly or may even

decline.

Widening Gap between social and private costs provides an even

greater stimulus to the demand for higher education than it does for
education at lower levels.

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 Social versus Private Benefits and Costs

The problem of divergent social versus private benefits and costs has
been artificially created by inappropriate public and private policies with
regard to wage differentials, educational selectivity and the pricing of
educational services.

Functioning reward and cost structure may develop human resources

in accordance with requirements and opportunities in various segments
of the economy. But this can be absent in where high wage are paid to
workers and scarcity of jobs. In such conditions two obvious
misallocations of human resources are likely to occur:

1. With the output of the educational system, many students will

emerge seeking educationally qualified jobs but which have been
preempted by others with even more education.

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Social versus Private Benefits and Costs

2. Individuals who adjust their sights downward and secure

modern-sector employment normally have to take jobs for
which they are overeducated in terms of the number of years
spent in school. Individuals who fail to get modern-sector jobs
and permanently unemployed or become self-employed in the
informal sector.

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 E. EDUCATION, SOCIETY AND DEVELOPMENT: SOME
ISSUES
 Relationship between education and development contains social
character of Third world society and links to the structure of the
educational system.

 If the society is inegalitarian (accepting of social, economic, or

political inequality), the educational system probably reflect that bias
in terms of who is able to proceed through the system.

 There are five specific economic components:

1. Growth,
2. Inequality and poverty,
3. Population and fertility,
4. Migration,
5. Rural development.
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 Education and Economic Growth
 The expansion of educational opportunities at all levels has
contributed to aggregate economic growth by;

1. Creating a more productive labor force and endowing it with

increased knowledge and skills;

2. Providing widespread employment and income-earning

opportunities for teachers, school and construction workers, etc.;

3. Creating a class of educated leaders to fill vacancies left by

departing expatriates or otherwise vacant positions in
governmental services, public corporations, private businesses ;

4. Providing the kind of training and education that would promote

literacy and basic skills while encouraging “modern” attitudes on
the part of diverse segments of the population.
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Education, Inequality, and Poverty

 Recent studies have demonstrated that the educational

systems of many developing nations sometimes act to
increase rather than to decrease income inequalities. The
basic reason for this perverse effect of formal education on
income distribution is the positive correlation between level of
education and lifetime earnings

 According to educational economist John Simmons;

“Schooling, the poor quickly learn, in most countries, is an escape
from poverty for only a few. The poor are the first to drop out
because they need to work, the first to be pushed out because they
fall a sleep in class and the first to fail their tests because upper
income children have had better opportunities at home.”

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 Education, Inequality, and Poverty
 Two fundamental economic reasons for suspecting in many LDC
educational systems are inherently inegalitarian:

1. The private cost of primary education are higher for poor students
than for more affluent students.

2. The expected benefits of primary education are lower for poor

students.

 Higher opportunity cost of labor to poor families means that even if

the first years of education are free, they are not without cost to family
. As a result of higher opportunity costs, school attendance, school
performance, tends to be much lover for children of poor families.

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Education, Inequality, and Poverty

 In many developing countries, annual tuition is roughly

equivalent to the per capita national income. The cost of
education therefore becomes prohibitive to lower-income
families.

 The inegalitarian nature of many Third World educational

systems is compounded even further at the university level,
where the government may pay the full cost of tuition and
fees.

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TABLE 9.6 Share of public for Education Appropriated by Different Socioeconomic Groups, by
Region
Percentage in the Percentage of Public Ratio between
Population School Resources Percentage of
Resources and of
Population
Region Farmer Manual White Farmer Manual White Farmer Manual White
s Worker Collar s Worker Collar s Worker Collar
s and Worker s and Worker s and Worker
Traders s Traders s Traders s

Africa
Anglophone 76 18 6 56 21 23 0.73 1.19 3.78
Francophon 76 18 6 44 21 36 0.58 1.15 5.93
e
Asia 58 32 10 34 38 28 0.59 1.19 2.79
Latin 36 49 15 18 51 31 0.49 1.04 2.03
America
Middle East 42 48 10 25 46 29 0.60 0.35 2.87
and North
Africa

Members of the Organization for Economic Cooperation

Developme 12 53 35 11 46 42 0.95 0.87 1.2
nt (OECD)
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Education, Internal Migration, and the Brain Drain

 Education is an important factor influencing rural-urban

migration. Individuals with higher levels of education
face with urban-rural real income differentials and higher
probabilities of getting modern sector jobs.\

 Brain Drain: Education also plays an important role in

the growing problem of the international migration of
high-level educated workers from poor to rich countries.
Ex: scientists, engineers, academics, and physicians.

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 Effects of the international brain drain:

• The international brain drain effects the rate and structure

of LDC economic growth and also has impact on the style
and approach of third world educational systems.

• Reduce the supply of vital professional people available

within developing countries;

• Divert the attention of scientists, physicians, architects,

engineers and academics who remain from important local
problems and goals such as: the development of
appropriate technology; the promotion of low-cost
preventive health care; the construction of low-cost
housing, schools and so on.
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Education of Women, Fertility, and Child Health
 Most studies show that there is a relationship between the
education of woman and their size of family at the lower levels of
education.

 Lower levels of urban unemployment and fertility are important

policy objectives for LDC governments because the basic issue
is; whether continued rapid quantitative expansion of the formal
educational system improve or worsen the problems of
accelerating internal migration and rapid population growth.

 According to this issue; theory and evidence seem to indicate

that given limited government resources, the further excessive
quantitative expansion of school places beyond basic education
is both undesirable and unwise. There are two main reasons for
this conclusion:

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1. Any rapid expansion of the formal primary system creates
unstoppable pressures on the demand size for the
expansion of secondary and tertiary school places.

2. The education of women does affect their fertility behavior,

such as; the mechanism of raising the opportunity cost of
their time in child-rearing activities. If sufficient employment
opportunities for women can be created, the reliance on
educational expansion will be more effective.

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 Education and Rural Development
 Rural development should be viewed in the context of far-reaching
transformations of economic and social structures, institutions,
relationships, and processes in rural areas.

 The goals of rural development cannot simply be restricted to

agricultural and economic growth. Rather, they must be viewed in
terms of a balanced economic and social development as well as the
rapid generation, of the benefits of higher levels of living.

 Broader goals of the rural development are; the creation of more

productive employment opportunities; more equitable access to
arable land; more equitable distribution of rural income; more widely
distributed improvements in health, nutrition, and housing; and
broadened access to both formal and nonformal education for
adults and children.

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 Philip H. Coombs and Manzoor Ahmed group educational needs
for both young people and adults, males and females, into four
main categories:

1. General and basic education: what most primary and

secondary schools now seek to achieve.

2. Family improvement education: designed primarily to impart

knowledge, skills, and attitudes usel for improving the quality of
family life.

3. Community improvement education: designed to strengthen

local and national institutions and processes.

4. Occupational education: designed to develop particular

knowledge and skills with various economic activities.

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 F. SUMMARY AND CONCLUSIONS:MAJOR
EDUCATIONAL POLICY OPTIONS
 Because educational systems largely reflect and reproduce rather than
change the economic and social structures of the societies, any
program or set of policies designed to make education more relevant for
development needs must operate on two levels:

1. Modifying the economic and social signals and incentives outside the
educational system that largely determine the magnitude, structure,
and orientation of the aggregate private demand for education and
consequently the political response in the form of the public supply of
school places.

2. Modifying the internal effectiveness and equity of educational systems

through appropriate changes in course content, structures of public
versus private financing, methods of selection and promotion, and
procedures for occupational certification by educational level.

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 Policies Largely External to Educational Systems

1. Adjusting Imbalances, Signals, and Incentives: includes;

policies that tend to remedy major economic imbalances,
increasing job opportunities, slowing the rate of rural-urban
migration, development-related modifications of educational
systems.

2. Modifying Job Rationing by Educational Certification:

making overeducation necessary for employment, the
elimination of school certificates for many jobs especially in
the public sector.

3. Curbing the Brain Drain: controlling or taxing the intenational

migration of indigenously trained high level professionals is a
very sensitive area.

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 Policies Internal to Educational Systems

1. Educational Budgets: public educational budgets should

grow more slowly than in the past for the creation of rural and
urban employment opportunities. Educational budgets
should be allocated to the development of primary education
in order to promote self-education and rural work-related
learning experiences in later life.

2. Subsidies: subsidies for the higher levels of education

should be reduced as a means of overcoming distortions in
the aggregate private demand for education, policies should
be promoted by which the beneficiary of education. Low
income groups should be provided with sufficient subsidies to
permit them to overcome the sizable private costs of
schooling.

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3. Primary School Curricula in Relation to Rural Needs: to
maximize the productivity of rural human resources, primary
school curricula and nonformal educational opportunities for
school dropouts and adults should be directed more toward
the occupational requirements of rural inhabitants.

4. Quotas: to compensate for the inequality effects of most

existing formal school systems, some form of quotas may be
required to ensure that the proportion of low-income students
at secondary and higher educational levels at least bears
some relationship to their proportion in the overall population.

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 THE
END 43