Chapter 8 outline

Chapter 8 outline - Chapter 8- Human Capital: Education...

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Chapter  8— Human Capital: Education and Health in Economic Development Human capital -Productive investments embodied in human persons.  These include skills,  abilities, ideals, and health resulting from expenditures on education, on-the-job training  programs, and medical care (from the glossary). 1) Central roles of Education and Health a. Health and education are basic objectives of development i. Health- central to well-being, pre-requisite for increase in productivity,  requirement for a successful education. ii. Education- essential for a satisfying and rewarding life, plays key role in  the ability of a developing country to absorb modern technology and  develop the capacity for self-sustaining growth. b. i. In 1950 280/1000 children in developing world died before 5 th  b-day. In  2002 only 120/1000 did. ii. 80% of all people literate today vs. 63% in 1970 c. Despite improvements, there still are problems, especially with the distributions  i. Child mortality rates in developing world > 10 times higher than in richer  countries. ii. Children who survive often face chronic health problems (malnutrition,  parasitic infections, etc) 2) Education and Health as Joint Investments for Development a. Greater health capital can improve the return on investments in education (it’s  hard to attend school and do well while dying. ..) b. Longer life=raises return on investment in  education (more time to make money  and do stuff with the education)
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c. More education=better health  i. people need to learn basic skills: hygiene, sanitization literacy, numeracy ii. education is necessary to train health personnel d. Improvement in productive efficiency from investment in education raises the  return on a lifesaving investment in health. e. Progress has been made in human capital.   i. Health and education levels have grown everywhere, but they have  improved most rapidly in developing countries (except for sub-Saharan  Africa where life expectancies are falling) 3) Improving Health and Education: Why Increasing Income in Not Sufficient a. There is some causality between higher income levels and higher levels of health  and education.  (With higher levels of income people and government can afford  b. Raising income doesn’t necessarily lead to adequate health and education,  especially for the kiddies.  i. Income is often spent on goods besides food ii. Income is used to increase food variety without necessarily increasing the  consumption of calories or level of nutrition. iii.
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This note was uploaded on 04/11/2008 for the course ECON 307 taught by Professor Gassler during the Spring '08 term at Saint Louis.

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Chapter 8 outline - Chapter 8- Human Capital: Education...

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