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Lecture+12 - Human Capital Education and Health Click to...

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Click to edit Master subtitle style 5/10/10 Human Capital: Education and Health Second Lecture
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Some Estimates Private Rate of Return “Social” Rate of Return Primar y Seconda ry Tertia ry Primar y Seconda ry Tertia ry Sub- Saharan Africa 38 25 28 25 18 11 Latin America, Caribbea n 27 17 20 17 13 12 Asia 20 16 18 16 11 11 Develope d 13 11 12 9 9 9
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5/10/10 Barriers to Access Notice that many educational investments seem like a good deal. Why do many people leave school early? Some possible answers: High direct costs. Even when school is “free” on paper, textbooks and uniforms can be a serious cost for poor families. Schools may also charge tuition under the table.
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5/10/10 Barriers to Access Parents are unable or unwilling to borrow to finance education. Little incentive for parents to send girls to school if girls are unlikely to give old age support (applies especially to South Asia). Children are required to work in order to bring in income.
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5/10/10 Barriers to Access Children dislike school, and parents don’t want to bother forcing them to attend. Children are too unhealthy to attend, or too unhealthy to learn much while in school. Education quality is low for many of the poor.
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5/10/10 Benefits of Expanding Education Higher productivity for the educated (private benefits) Higher future tax revenues for government The educated can help others, e.g., literacy and fertilizer directions Other positive externalities from education (e.g., increased innovation and self-discovery, O-ring model)
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