Chapter 7 Education

I. Introduction

Education is a powerful driver of development and one of the strongest

instruments for reducing poverty and improving health, gender equality, peace, and
stability. Developing countries have made tremendous progress in getting children into
the classroom and the majority of children worldwide are now in primary school.
Nevertheless, some 260 million children are still out of primary and secondary school.

Capital is a stock of wealth used to produce goods and services. Most often, by
capital people mean physical capital: buildings, machines, technical equipment’s, stocks
of raw materials of goods. But "human capital" people's abilities, knowledge, and skills
is at least as important for production, and at least for valuable to people who have it.
The importance of the "human factor" in modern production is reflected in the
distribution of income among people who owned physical capital and people who
owned knowledge and skills.

In the 1990s, came the recognition of a new stage of global economic

development: the “knowledge economy”, knowledge base and knowledge driven.

II. Education of Human Capital

Most human capital is built up through education or training that increases a

person’a economic productivity- that is, enables him or her to produce more or more
valuable goods and services. Governments, workers, and employers invest in human
capital by devoting money and time to education and training. These investments in
human capital requires sacrifice. People agree to make this sacrifice if they expect to be
rewarded with additional income in the future.

Government spend public funds on education because they believe that a better
educated population will contribute to faster and more sustainable development.
Employers pay for employee training because they expect to cover their costs and gain
additional profits from increased productivity. And individual are often prepared to spend
time and money to get education and training, since in most countries people with better
education and skills earn more.

Economic returns to education are not always the same. Returns to education may be
lower if:

• The quality of education is low or knowledge and skills acquired at school do not
match market demand. In this case investments in human capital were not efficient
enough, resulting in less human capital and lower returns to individual and society.

• There is insufficient demand for human capital because of slow economic growth. In
this case workers’ human capital may be understand and under-rewarded.

• Workers with lower and higher education and skills are deliberately paid similar wages
to preserve a relative equality of earnings as used to happen in centrally planned
economies.

The national stock of human capital and its rate of increase are critical to a country’s
level and rate of economic development, primarily because these are important
determinants of a country’s ability to produce and adopt technological innovation. But
investments in human capital, although extremely important, is not sufficient for rapid
economic growth.

Most governments are playing an increasingly active role in providing education.

Difference in public spending on education (relative to GDP) across countries reflect
differences in governments efforts to increase national stocks of human capital.
Governments of developing countries devote a larger share of their GDP to education
today than they did in 1980.

Data on public education spending do not, however, paint a complete picture of

investments in human capital because in many countries private spending on education
is considerable. Among low income countries, for example, the share of private
spending on education ranges from about 20 percent in Sri Lanka to 60 percent in
Uganda and Vietnam, while among high income countries its ranges from 5 percent in
Australia to 50 percent in Switzerland.
 There are certain patterns in the balance between public and private spending on
different levels of education. Most governments are committed to providing free primary
and often secondary education because it is believed that not just individuals but the
entire country benefits significantly when most of its citizens can read, write, and fully
participate in social and economic life.

In vocational education, employers often play an important role in providing on

the job training for employees and in financing training in vocational schools.

Public financing of vocational training is generally considered justified when

employer training capacity is weak or absent. High quality general pre-employment
education is the best guarantee of an individual’s ability to learn new skills throughout a
career and of employers’ willingness to invest in that individual’s professional training.

III. Issues in Secondary and Tertiary Education

In the most developing countries enrollment in Secondary schools is much lower

than in primary schools. Although the situation has been improving over the past fewer
decades, on the average less than 60% of children of secondary school age in low and
middle income countries are enrolled, while in high income countries secondary
education has become almost universal. In Sub-Saharan has the largest share of
children not enrolled in secondary education.

In developing countries have faced the problem of children enrollment in secondary

school, the percentage of children in the 10-14 age range who work and 1/3 of 10-14
age range are in labor forces in low-income countries (exclude China and India).

Report on issues in education (Cambodia)

45% of Cambodian women were illiterate in 2004. 16% of Cambodian girls were
enrolled in lower secondary schools in 2004. Many Cambodian girls have been kept
from education due to several factors. Must to take care home or younger siblings,
perform household duties, support and the head of the home. Other factors include
poverty, prohibitive distance of schools from many rural houses, and sometimes even
fears of safety when travelling from home to school.
In 2004, 20% of graduation of colleges or universities were female.

In high-income countries tertiary enrollment have increased rapidly since 1980, but in
low-income countries they have improved only slightly.

Improving the quality of education in the lagging developing countries are offered by
modern information and communication technologies (ICT). To see which countries
appear the best quality math and science education to their student.

To improve education field is to improve economic development, investing in education

is not only an important way to build a country’s human capital and move it closer to the
knowledge economy, thus improving the prospect and high standard of living for
individual, education also has the value in its own right because education broaden
people’s horizon and help them to lives healthier, more financially secure, and more
fulfilling lives.