Education and

Development*
• “creates choices and opportunities for people,
• reduces the twin burdens of poverty and diseases, and
• gives a stronger voice in society.
• dynamic workforce and
• well-informed citizens able to compete and cooperate
globally
• opening doors to economic and social prosperity”

*World Bank
 What is Education
• Education or teaching in the
broadest sense is any act or experience
that has a formative effect on the
mind, character or physical ability of an
individual. In its technical sense
education is the process by which
society deliberately transmits its
accumulated knowledge, skills and
values from one generation to another.
Education Indicators
Education Indicators
(contd.)
Health Indicators
 K‐economy requires
knowledgeable, skilled
& innovative human capital
 The Central Roles of
Education and Health
• Health and education are important
objectives of development
• Health and education are also
important components of growth and
development

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 Education and Health as
Joint Investments for
Development
• Greater health capital may improve the
returns to investments in education
• Greater education capital may improve
the returns to investments in health

8-8
 Improving Health and Education:
Why Increasing Incomes Is Not
Sufficient
• Increases in income often do not lead
to substantial increases in investment
in children’s education and health
• Better educated mothers tend to have
healthier children

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 Basic Education
• Two decades of focused programs in basic
education have reduced out-of-school youth to
about 10 M (down from 25 M in 2003), most from
marginalized social groups. Net enrollment rate is
85%, with social disparities.
• Key challenge is to finish the “access agenda” and
dramatically increase focus on quality, with more
attention to classroom processes, basic reading
skills in early grades, teacher quality and
accountability, community/parent oversight,
evaluation/assessment.
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 Secondary Education
• Access and Quality remain big challenges.
• Gross enrollment rate of 40%, with significant
gaps between genders, social groups,
urban/rural, such that most secondary students
are urban boys from wealthier population
groups.
• Private aided and unaided schools = 60% of all
secondary schools, and growing.
• Overloaded curriculum, poor teaching practices
and low primary level quality affect secondary
quality.
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Vocational Education and Training
(VET)

• VET system is small, and not responding of

needs of labor market; <40% of graduates find
employment quickly.
• Insufficient involvement of industry and
employers in VET system management,
internships.
• Lack of incentives of public training institutions
to improve performance.

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Technical and Higher Education
• Numerically huge: 330 universities and 18,000
colleges
• Substantial private provision in professional
education.
• But just 11% of youth 18-23 are enrolled.
• Problems of capacity, quality, relevance, and
public funding. Hard to retain qualified faculty.
Limited research.
• Several world-class institutions.

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 Demand for Education
• The wage / income differentials;
• The probability of employment;
• The direct private costs;
• The “opportunity costs” of education; and
• The supply of educational facilities /
infrastructures
 Social/ Private Benefits
and Costs
• Todaro has shown that for many
• developing countries the social costs of education are low at lower
levels of education and rise rapidly at higher levels. Social benefits on
the other hand are high at lower levels and decline at high levels of
education. The reasons for this are that in the case of costs
governments tend to spend less at lower levels of education as
compared to higher levels. Benefits tend to be high at low levels
because marginal improvements in knowledge and skills lead to high
productivity.
• In the case of private returns and costs, the difference between the
two is higher at high levels of education. Private costs are low at
higher levels of education because of government policies of spending
more at this level. Private costs are high at low levels of education
because of the low government subsidies.
Figure 8.5 Private versus Social
Benefits and Costs of Education:
An Illustration

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 Child Labor
• Child labor is a widespread
phenomenon
• The problem may be modeled using
the “multiple equilibria” approach
• Government intervention may be called
for to move to a ‘better’ equilibrium

8-17
Child Labor as a Bad
Equilibrium

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 The Gender Gap: Women
and Education
• Young females receive less education than young males
in nearly every LDC
• Closing the educational gender gap is important because,
– The rate of return on women’s education is higher than that of
men in developing countries
– It increases productivity and lowers fertility
– Educated mothers have a multiplier impact on many
generations
– It can break the vicious cycle of poverty and inadequate
schooling for women

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 GOI Education Strategy
• Unprecedented priority to universal elementary
education.
• Sarva Shiksha Abhiyan: aims to universalize elementary
education by 2010, and improve learning outcomes.
• Education cess of 3% on income tax, corporation tax,
excise and customs duties generates necessary resources
• Cost-Share: was 50/50 (2007), moving to 65/35
Center/State
• Increased focus on quality and upper primary in phase II.

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 GOI Strategy (continued)
• National Mission for Skills is being set up,
looking at both VET and secondary education
• New centrally sponsored scheme to update all
industrial training institutes (ITIs)
• Significant investments in higher education
(including reforms and expansion) are expected

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• The Right of Children to Free and Compulsory
Education Act, 2009 creates a framework for legal
entitlements for all children in the age group of 6 to
14 years to education of good quality, based on
principles of equity and non-discrimination. In recent
years, Sarva Shiksha Abhiyan (SSA) has made
significant contribution in improving enrolment and
infrastructure for elementary education. About 98
per cent of habitations are now covered by primary
schools.Planned allocation for school education has
been increased from Rs.26,800 crore in 2009-10 to
Rs.31,036 crore in 2010-11. In addition, States will
have access to Rs.3,675 crore for elementary
education under the Thirteenth Finance Commission
grants for 2010-11.