Topic_9_Human_Capital.pdf - Econ 171/EEP 151 Development...

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Econ 171/EEP 151: Development Economics Topic 9 – Human Capital: Education and Health in Economic Development David Roland-Holst University of California, Berkeley Tuesday, Thursday, 11-12:30 A1 Hearst Field Annex
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2 23 October 2017 The Central Roles of Education and Health Health and education are important objectives of development , as enunciated in Amartya Sen s capability approach, and in the core values of economic development determinants of development and growth – primary drivers of labor productivity
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3 23 October 2017 Education and Health as Joint Investments for Development Investments in human capital - the same individual Greater health capital may improve the returns to investments in education § Health is a factor in school attendance § Healthier students learn more effectively § A longer life raises the rate of return to education § Healthier people have lower depreciation of education capital Greater education capital may improve the returns to investments in health § Public health programs need knowledge learned in school § Basic hygiene and sanitation may be taught in school § Education needed in training of health personnel
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4 23 October 2017 Improving Health and Education: Increasing Incomes is Not Sufficient Increases in income are weakly correlated with investment in children’s education and health Better educated mothers tend to have healthier children at any income level Significant market failures in education and health reinforce a low level investment equilibrium in developing countries - requiring policy action
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5 23 October 2017 Investing in Education and Health: The Human Capital Approach Initial investments in health or education lead to a stream of higher future income The present discounted value of this stream of future income is compared to the costs of the investment Private returns to education are high, but so are discount rates in low income countries
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6 23 October 2017 Age-Earnings Profiles by Level of Education: Venezuela
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7 23 October 2017 Financial Profile for Education Investment Danger Zone Who gets these?
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8 23 October 2017 Annual Returns to Investment in Education: Regional Averages (%)
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9 23 October 2017 The Gender Gap: Discrimination in Education and Health Young females receive less education than young males in nearly every low and lower-middle income developing country Closing the educational gender gap is important because: § The social rate of return on women’s education is higher than that of men in developing countries § Education for women increases productivity, lowers fertility § Educated mothers have a multiplier impact on future generations § Education can break the vicious cycle of poverty and inadequate schooling for women § Good news: Millennium Development Goals on parity being approached, progress in every developing region
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10 23 October 2017 Youth Literacy Rates 2008
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11 23 October 2017 Discrimination in Education and Health II Consequences of gender bias in health and education § Economic incentives and their cultural setting § Missing Women mystery in Asia
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12 23 October 2017 Estimated Percent of Women “Missing”
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