Week 7 - Lecture B

Week 7 - Lecture B - ECON 4411A Fall 2011 Development...

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Unformatted text preview: ECON 4411A, Fall 2011 Development Economics Summary Notes: Week Seven, Lesson 2 Education and issues related to its provision Quote of the day: It has never been my object to record my dreams, just to realize them Man Ray 2002 Distribution of Education Just as we can derive lorenz curves for distribution of income, we can also de- velop lorenz curves for the distribution of education. In this case, the cumulative proportion of the population is on the x-axis and the cumulative proportion of schooling on the y-axis. Like the regular lorenz curves, the 45-degree line re- flects perfect equality where every one in the economy would have the same number of years of schooling. In a highly unequal economy, many people have no years of schooling at all, while a few might have received a Ph.D. The closer the lorenz curve is to the 45-degree line, the more equal the distribution of ed- ucation. These lorenz curves vary significantly across developing countries. For example, South Korea had a much more equal distribution of education than India. In particular, as of 1990, well over half of the population of India had received no schooling at all while in South Korea, less than 1% had no schooling. Yet both countries are producing significant number of Ph.D. graduates. One may also derive an education Gini coefficient similar to the derivation of the Gini coefficient for income inequality. If we plot education Gini over years of schooling, we note that education inequality fall steadily as years of schooling rise. However, this measure of ed- ucation inequality only capture quantity of schooling. What is however more important is the quality of schooling which makes a big difference. For example, education quality is higher on average in a developed country than in LDCs. However, the variability of education is more likely going to be more in a de- veloping country. Berhman and Birdsall showed that the quality of education (quality of teachers, facilities and curricula) and not quantity alone best ex- plains differential in wages. Hence, there is a need to deepen the quality of human capital and not just expand it. Education, Inequality and Poverty Education which is supposed to be egalitarian and reduce poverty and inequal- ity might serve to increase these issues because of the regressive mode of imple- mentation in many LDCs. In many developing countries, education levels are correlated with life time earnings and if educational attainment of the children of the poor are low, then education would only exacerbate poverty and inequal- ity. Unfortunately in many LDCs, the private costs of primary education are higher for poor students than for more affluent students and poorer students are 1 more likely to quit. In addition, the expected benefits of primary education are lower for poor students who do not expect to go to higher levels of education because of the high cost of secondary education and their inability to borrow for this level of education. This is especially relevant if good quality secondaryfor this level of education....
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This note was uploaded on 01/26/2012 for the course ECON 4411 taught by Professor Ruth during the Fall '11 term at Georgia Tech.

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Week 7 - Lecture B - ECON 4411A Fall 2011 Development...

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