Determinants of Educational Enrollment in Pakistan

Authored by: M. Asfandyar Khan

Table of Contents

Determinants of the Educational Enrollment The Case of Pakistan

Abstract. This study provides an analysis of education in different regions of Pakistan; across different ages, gender and income groups. Different geographic zones in which education varies like rural & urban are formed for the four provinces of Pakistan across the different categories. The study finds visible differences in the education situation across different areas of Pakistan. The study suggests that educational participation can improve if the disparity of opportunity in the geographic zones can be eradicated and if the general tendency to discriminate is rebuked and hence removed along with changing the mindset of the people about the attainment and benefits of education. For this purpose, more funds may be allocated to health and education sectors, and special attention needs to be given to awareness programs and disparity in income and facilities across regions, for the improvement of the enrollment rate in Pakistan.

I. INTRODUCTION
This paper explores the variables that affect the decision to acquire education in Pakistan. Education and human capital being one of the driving forces of the modern economy is a matter of great importance to the government and hence its policies. The research question is to find the relation between variables like region, gender, age and income with the attainment of education. But first we delve deeper into the theory of how human capital and education are essential in the first place. The prevalent vast differences in standard of living between developed and developing countries can be attributed to large differences in nutrition, infant mortality rate, life expectancy and level of education. Level of education is primarily linked with the changes in the marginal productivities of workers, so the quality and stock of skills and of a labour force is dependent on it. According to Solow model: Y = F (K, AL) Where: Y=Output, K=Capital, L=Labor, and A= Knowledge/Effectiveness of labor. More unambiguously, as education i.e. knowledge rises so does the technological progress. AL is technological progress or effective labour.

Solow model treats technological progress as exogenous; it assumes that technological progress is the outcome of the allocation of resources to the creation of new technologies. However, new growth theories treat technical progress as endogenous, a key factor to growth. In sum, education is an instrumental determinant of growth. Growth miracles of industrialized nations are due to the unprecedented level of education accumulation. A modern vision of growth lays emphasis on the sustained technological and institutional growth. Growth does not solely depend upon human capital and physical capital but high growth is chiefly dependent on viable technological and organizational growth (Chaudhry, 2009). Education, however, in modern economies plays a vital and decisive role. Level of education is a stock of accumulated knowledge and skills possessed in the workforce which can be translated into productivity. It is the attained quality of a workforce via investment in education. The countries which succeeded in attaining high economic growth rate laid emphasis on the education and health. Recently focus has been shifted from growth to education, because growth has a trickle-down effect in reducing poverty, while education has a direct effect on poverty reduction. Education enhances productivity which leads to higher rewards or returns. In turn this increased productivity yields higher wages and higher output so two macroeconomic goals are achieved. Increased real income inflated consumption capacity while the output expansion provides more goods at lower prices whereas inflation is kept under control. World Bank (2002) report on attacking poverty identifies the following resources: (a) Natural resources (land). (b) Human assets (ability for basic labor, skills and good health). (c) Financial assets (formal and informal social security and political power).

(d) Physical assets (access to infrastructure and physical capital). All this reveals that human assets hold the key ranking in reducing poverty, accelerating economic growth, generating employment, enhancing productivity and controlling price hike. Unfortunately, the level of human development is the lowest in Asia, as measured by access to education basic health and family planning services, safe drinking water and sanitation. Ironically, Pakistan witnesses a typical story of lack of education due to neglected focus on it and the health sector. Pakistan spends just 1.7% of its GDP on education. In this already low amount to education, only 0.22% of GDP (about 13% of the total education spending) goes to higher education. Hence, improvement in the quality of education is extremely necessary at present, so as to make Pakistani workers competitive in the labor market internationally. The main focus of this term paper is to analyze the levels of educational enrollment in different categories of Pakistans demographic makeup and comparison of these categories through Logit regression and bivariate analysis. As education is such an important part of achieving economic growth the determinants of it are to be looked at and the relation to be analyzed so that the relevant and appropriate policy incentives and instruments can be elucidated. The objective is to find the relation between variables like region, gender, age, Household Heads Education and household income with the educational enrollment to find out the impediments to educational attainment.

II. LITERATURE REVIEW

Education is widely treated as part of the Production function as it is a good measure of the marginal productivity of the worker. This treatment is served out in the work of Mankiw, Romer and Weil (1992) as well. A substitute method related with the theory of endogenous growth is to use

technological progress, or the total factor productivity growth as a function of the level of education. It reveals that educated labor force is effective in executing creating, and espousing new technologies, thereby stimulating growth. Existing literature on the role of level of education on several sectors of the economy suggests that human capital has substantial effects on economic growth; Thereby establishing that any disparities in it across different regions will result in the divergence of living standards in those regions. As can be viewed in the paper Regional disparities in human Capital: A case for Pakistan by M. Azhar Khan and Hafeez ur Rahman. The study suggests that skills of workforce can be boosted through investment in human capital that may result in an increase in the marginal productivity of capital. The paper The Determinants of Educational Attainment: Modeling and Estimating the Human Capital Model and Education Production Functions by Kathryn Wilson in addition incorporates neighborhood, school characteristics, and family to have an impact on the educational decisions and choices Becker's (1964) in his popular and groundbreaking Human Capital proposed that an individual has to decide whether to make an investment in education or not. This looks into the inter-temporal choice that a worker faces i.e. whether to work now and earn or to forgo income and invest in education for higher expected future returns. The main idea is that the education decision is time dependent of present and future consumption and spending. So Education is here treated, for the first time, as an investment good. A lot of empirical studies have followed this along with statistical and econometric analysis approach being applied to this theory. Willis and Rosen (1979) conducted their on study in light of Beckers Model and analyzed the individual level investments in education. They

said that a person decides their higher secondary education based on the returns or incomes that are associated with the jobs that hire from that particular field pool. They forecast from the lifetime income hypothesis as they find an enrollment to earnings estimated elasticity of approximately two; so education is assumed to be completely and singularly dependent on the returns that that education will prospectively yield. E.g., a person receiving education from a poor quality education from a poor quality of school will expect low returns to education and hence low education. Romer (1990) postulated that level of education will have a direct effect on the workers productivity by determining the capacity of notion come up with new and improved technological methods for the output of the domestic production of goods. Mankiw, Romer and Weil (MRW) (1992) find a support for the level of education augmented model in a country time series. However, Pugno (1996) shows strong reservations on these results and argues that model tested by MRW is miss-specified and show structural break. Nelson and Phelps (1966) explored that level of education is instrumental to stimulating the response times of technology. The World Bank (1980) concludes that studies have shown that economic return on investment in education seems in most instances, to exceed returns on alternative kind of investment, and that developing countries obtain higher returns than the developed ones. Abbas (2008) investigated relationship between level of education and economic growth in Pakistan using time series data. The study uses Johansen cointegration approach for estimation purpose and rejects the vision of endogenous growth model. The fitted model indicates that output elasticity of level of education may be expected to increase with technical progress. Higher secondary schooling shows same level of productivity as it is observed in OECD economies, which is against the convergence theory. The reason might be the low level of average schooling in Pakistan. Higher return to health spending compared very

favourable with the industrial investment. Bagde (2008) analyzes the relationship between level of education and growth of Indian software industry. The study through empirical analysis has shown that software engineering baccalaureate has positive effect on growth of software industry in 13 states of India. Asghar et al. (2012) uses dynamic modeling in order to make an effort in analyzing economic growths relation with educational attainment. The results of the study show the existence of positive and strong relationship between human capital and economic growth. The study suggests that spending more on educational attainment may lead to an increase in sustained economic growth in Pakistan. Although in the preceding discussion empirical studies produce contrasting results but a large number of studies find that growth of region is influenced by the initial level of level of education.

III. MODEL AND METHODOLGY

Now that it has been established the attainment of education is quintessential to sustainable growth we look into the matter of why, if it is such an obvious answer to all our problems is it not as practically reflected in the global populace and in this case Pakistan. The first issue is to find a relevant variable which elucidates the problem of lack of education as our dependent. The simplest way to tackle is to return to the basics, i.e. why do people not get educated? What it is that disinclines them from the pursuit of education? A few things can be that there is simply a lack of opportunity; they dont have the resources, another could be that they are not able or they simply dont want to, which in turn begs the question of why not: are the oblivious to its benefits or is it inconvenience or perhaps some other issue? To answer all of these questions an econometric model has been developed and data from the PSLM 2010/2011 is used.

LEVEL OF EDUCATION We use PSLM data and STATA software to analyze the situation. The model used is: Dependent Variable: Enrollment Rate Independent Variables: Region. Dummies are used for urban and rural. Province. Dummies are used for the four provinces. Gender. Dummies are used for Males and Females. Age. Age groups* are used. Education. Heads Education. Groups* are used for convenience. Household Income. Groups* are used in this as well. * denotes that Coding for the groups is given in the Do File. The Logit Model regression is used along with a bivariate analysis so as to capture the effects and trends of all the variables. The reason for using the logit model is that the dependent variable is a qualitative yes no variable and the logit model checks the probability of likelihood by using log of odds ratio with the dependent variable. Logit scq05= Bo+B1(region)+B2(province)+B3(Gender) +B4(Household Income)+B5(Head Education Category) +B6(Education Category)+B7(Age)

IV. RESULTS & DATA SOURCE

The Data used was from the Pakistan Social and Living Standards Measurement Survey (PSLM) 2010-2011. STATA software was used to get the following regression results, and tables of relation between Educational enrollment and other variables:

The Coefficients show how the probability of likelihood of being enrolled in an institution or school is affected by the independent variables. Region is urban as rural is taken as base category. A person is more likely to be enrolled in urban as opposed to rural area. Sbq03 is male as female is taken as base category. A male is more likely to be enrolled as compared to a female. The constant term shows a Female living in rural Punjab. Hhinc2 is household income/10000 meaning that a Rs.10000 change in household income leads to a small decrease in the probability of likelihood of being enrolled. The probability of likelihood is more when the Head of the household is more educated as well as when the person himself/herself is more educated. Punjab is the base category. A person living in Sindh is less likely while a person in KPK and Baluchistan is more likely to be enrolled than Punjab.

BIVARIATE Analyses

 74.54% of the people are not enrolled in total and 25.46% are. This trend doesnt deviate much with respect to changes in household income.

Most of those who are enrolled belong to the 1-15 age group.

There isnt much gender disparity in enrollment outcomes.

23% of the rural population is enrolled as opposed to the 30% of the urban population.

 KPK has the highest %age of people enrolled while Baluchistan has the lowest.

This has an increasing trend as the education of the Head of household increases so does the percentage of enrollment.

Enrolled? no yes

punjab 89,087 30,222

region and province rural sindh khyber pakhtunkhwa 61,820 15,473 50,238 18,464

balochistan 51,188 11,254

Enrolled? no yes

punjab 56,664 25,098

region and province urban sindh khyber pakhtunkhwa 36,748 14,436 15,128 6,989

balochistan 11,260 5,150

In Punjab the urban rural disparity is large but Baluchistan has the highest whereas KPK has the lowest.

Enrolled? no yes

punjab 74,110 25,448

gender of person and province female sindh khyber pakhtunkhwa 49,404 11,259 35,494 9,433

balochistan 32,003 4,657

Enrolled? no yes

punjab 71,641 29,872

gender of person and province male sindh khyber pakhtunkhwa 49,164 18,650 29,872 16,020

balochistan 30,445 11,747

The highest gender disparity is in Baluchistan and KPK while Punjab has the lowest in the provinces. So in general Baluchistan is the worst of in terms of enrollment level disparity between gender and regional gaps which may perhaps be explained by the fact that the infrastructure in it is also the lowest as compared to the other provinces as well as the extremely conservative attitudes of the general populace and the political turmoil that exist there.

V. CONCLUSION AND SUGGESTIONS

The socio-political differences are reflective in the different geographical zones of Pakistan. These differences are natural, but prolonged differences in provision of education facilities and economic conditions among and within regions are posing some serious problems. Gender based discrimination and a lack of opportunity for those who are born in poverty is apparent and this has to be counter acted if progress has to be achieved. These differences may foster a feeling of lack of economic opportunity disparity and it may bring so many social evils and bad blood in the society that is dangerous for the social fabric. Concentrated growth has no economic value as it does nothing for the unemployment stats and inflation stats but rather exacerbates the situation. This can only be done when along with other facilities health and education facilities are provided especially to the rural masses. Majority of the population lives in rural areas where these basic facilities are deficient. In Pakistan less than 2% of GDP is spent on

education, which is quite less than the rest of the world. Hence, improvement in the quality of education is the need of the hour, so that Pakistani workers can be raised to the world standards.

VI. POLICY IMPLICATIONS

The government needs to increase its education budget to provide incentive, opportunity and infrastructure to all the provinces to reduce dissention between the masses. Special attention is needed towards building a foundation for education in the rural areas as 70% of our population lives there. Educational programs can be introduced to facilitate those in the rural areas. As Pakistan has a broad based population pyramid it is necessary that the enrollment rates especially of the youth increase as this is a demographic dividend and by capitalizing on this great opportunity Pakistan can bring about stability in its currently tumultuous economy. Anti-Discrimination laws have to be implemented and enforced to reduce male female disparity. The disparity between male and females is especially detrimental as half the population of Pakistan is female and lack of opportunity for them leads to economic stagnancy. The government needs to carry out awareness campaigns so as to mitigate and moderate the cultural dogmas of our society. Special attention is required for higher education, as skilled workers and professionals lead the way in economic progress. Wages are dependent on the marginal productivity of the individual (VMP) so in order to alleviate poverty there is a need to increase the VMP which can only happen if the Level of education is increased through educational investment. Enrollment rates will increase if the education budget increases i.e. the spending on educational institutes is increased as the

better the quality of the schools the more will be the expected return from education hence more people will forgo present income for future higher incomes. So the enrollment rates will reflect this in its statistic composition.

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