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Education

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Title: Education


1
Chapter 8
Norton Media Library
Chapter 8
Education
Dwight H. Perkins Steven Radelet David L. Lindauer
2
Introduction
  • Education is a form of Human Capital
  • Schooling vs Education?

3
Trends and Patterns
  • Stocks and Flows Stock is amount of schooling
    embodied in a population
  • Flows Net change in those flows as a result of
    enrollment
  • Gross enrollment rates have risen many parts of
    the world at various levels
  • Net enrollment rates are enrollments of those
    relevant age

4
(No Transcript)
5
Source Country fixed-effects instrumental
variable (IV) estimation in Table 6 of Barro and
Lee (2010).
6
Fig. 8.1 Educational Attainment of the Adult
Population (ages 25-64)
7
  • Gross enrollment ratio (GER) or Gross Enrollment
    Index (GEI) to determine the number of students
    enrolled in school at several different grade
    levels (like elementary, middle school and high
    school),
  • and examine it to analyze the ratio of the number
    of students who live in that country to those who
    qualify for the particular grade level.
  • 'Gross Enrollment Ratio' the total enrollment
    within a country "in a specific level of
    education, regardless of age, expressed as a
    percentage of the population in the official age
    group corresponding to this level of education.

8
  • The Net Enrollment Ratio (NER) is enrollment of
    the official age-group for a given level of
    education expressed as a percentage of the
    corresponding population.
  • For example, in 2005, Djibouti had the worst
    measured NER in primary education in the world at
    34.4. 
  • http//data.worldbank.org/indicator/SE.PRM.NENR
  • Thus, out of every 100 children within the
    official age-group for primary education, only 34
    were enrolled in school.

9
Fig. 8.2 Educational Attainment of Adult
Population
10
Schooling versus Education
  • There is a gap between rich and poor nations in
    educational quality
  • Learning Outcomes also vary (see figure 8.3)

11
(2007) Source - U.S. Department of Education
http//nces.ed.gov/timss/figure07_2.asp
12
Fig. 8.3 Learning Outcomes Reading Achievements
for 15 Year Olds
13
The Benefits of Education
  • Education is an Investment
  • Education is a human capital investment
  • Internal Rates of Return to Schooling
  • Estimated Rates of Return

14
Benefits of Education
  • Present Value (PV) of all costs and benefits
  • PVb Sum of the present value of all future
    private benefits (see 8.1)
  • PVc Present value of all anticipated private
    costs (see 8.2)
  • Internal Rate of Return is the rate or (r ) that
    which equates PVb PVc ( see formula 8.3)

15
Education is a public good
  • Education is a public good with a positive
    externalities
  • The Private sector or markets will under-produce
    education if left to themselves.
  • The fact that Education has a positive
    externalities justified public provision or
    subsidy of education.

16
Social and Private Rate Returns to Education
  • There is a difference between private and social
    rate of return to education for countries which
    depends on the level of income
  • See figure 8.3 next for the relative rates of
    return of education at Primary, Secondary
    College levels for low, Middle, High Income
    countries
  • What is level of education has the lowest
    highest return in LICs?

17
Table 8.3 Returns to Schooling by Level and
Country Group
18
Public expenditure on education ( of GDP) ()
HDI Country 1980 1990 2000 2010-2011
1 Norway 5.8 6.4 6.6 7.3
3 USA .. 5 4.7 5.1
10 Japan 5.2 .. 3.7 3.8
45 Kuwait 2.8 4.7 (2005) 3.8 (2006) ..
167 Rwanda 2.7 .. 4.1 4.7
186 Niger .. 2.9 3.2 3.8
186 Congo 2.3 .. .. 2..5
http//hdrstats.undp.org/en/indicators/38006.html
19
Making Schooling More Productive
  • Underinvestment
  • Misallocation
  • Improving schools
  • Reducing the costs of going to school
  • Inefficient use of resources
  • More than the money
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