Ch. 14, Lack of Education, by Peter F. Orazem
Summary and Commentary
Um, how do you spell edge-ooh-kay-shun?
This chapter deals with education in developing countries
Literacy and and earnings and health are all related to years of schooling. From an economists perspective, "Average returns are almost universally positive and at or above market returns on other investments." Benefits are social, in addition to individual. Improved governance, economic climate for growth, and reduced "fertility behavior" are listed. Women and urban residents see higher returns. Markets experiencing "shocks" requiring adaptation see better returns on education.
"Human capital will be most valuable when social or governmental institutions place few restrictions on mobility or trade, when wages and prices are flexible, and when property rights are enforced."
It is the measure of improvement in cognitive skills, not time in school, that indicates if a student is more likely to have greater earnings. "Average cognitive attainment drives economic growth." Relatively few literate individuals never attended school. So the MDG of attaining universal primary education by 2015 is underlied by the presumption that schooling is needed for literacy. (Reading is to the mind what exercise is to the body). This goal is estimated to cost $11-28B.
Cost:benefit analysis (CBA) tells us how to make efficient progress to reach what groups most cost-effectively. Education policies can be supply side or demand side. Supply side policies aim to improve quantity or quality of schooling. Orazem feels there are several reasons supply side policies may fail the cost-effectiveness criteria: 1) if you build it, they may not come (facts: halving the average distance to school only raised years of schooling by about 1.5%. some enrollment will come from already-enrolled children switching schools. New schools will be disproportionately located in relatively remote places with few children and relatively high costs.), 2) good teachers and bad teachers look very much alike statistically (education levels,demographics, in-service training), and there is lack of agreement on how to foster teacher-quality. 3) decentralization of school management, while a central theme of the World Bank and other international agencies, is not a proven strategy. 4) time-lag of responding to better management, or for parents to respond to school quality improvements, or before children attain literacy, place supply-side policies at a cost-benefit disadvantage compared to....
ta-da! Demand-side interventions!
Demand-side can target populations not in school, and only give payment if the program is working (i.e. contingent upon attendance), and immediately influence behavior.
He proposes 3 solutions:
1. Interventions in child health and nutrition, to attempt to imprope the child's physical/mental ability to learn.
2. efforts to lower the cost of public/private schooling, (enhance the ability to pay)
3. income transfers to households, conditional on enrollment, that lower the opportunity cost of a child's time in school, (and which enhance affordability).
Health and Nutrition
"Mechanisms" include supplements, school lunch plans, immunization programs, health instruction. Cases in point: Nutrition, Iron supplements, and Deworming medicine. Malnutrition early in life affects both cognitive and physical development, which is only partially reversible by good nutrition later on. Physical stature can be affected, which has been shown to affect lifetime earnings. In secondary school (age 13-15), iron supplements can raise cognitive abilities by 5-25%, or the equivalent of 0.05 years of schooling. A cost of 11 dollars (per added-year of schooling) yields 32X the benefits. (added to what?). De-worming in Kenya, according to one study, increased attendance by 0.15 years per pupil (an implied cost of $3.50 per child-year of schooling).
You know, I'm starting to think these economists are kinda nuts. De-worming for education?Well, yeah, but for everything else, too. DUH. Health is a human right. They make the simple so complicated. People should just do what needs to be done, for everyone, and once everyone's happy, we can all worry about extras for ourselves, then. That's my PRIORITIZATION SCHEME. I mean, we should all be happy and healthy. Intellectuals love to make everything seem like they're all about Efficiency and Intelligence. This book seems to have lost touch with human warmth and happiness. What are we, robots on a mission to meet a command from the UN high-command, dictating universal literacy? NO, we're HUMANS who have read GOOD BOOKS, with the desire to share our JOYs. Geez.
Lowering Schooling Costs
Costs include uniforms, supplies, tuition, fees, tutorials; they can represent a significant share of a poor houshold's income. Programs to reduce schooling costs can have dramatic and speedy impacts on children's achievement, and years of schooling completed.
The angel is in the details: Ghana, Kenya, Tanzania, and Uganda cut or eliminated the school fees.
-Enrollments rose by 1.2M children in Tanzania.
-A program that cut houshold costs of uniforms and school materials in Kenya increased years of schooling completed by 15%.
-In Uganda, the elimination of primary schooling fees lowered costs by 60%, and increased enrollments by 60%, with the largest gains in rural areas. Pupil:teacher ratios rose from 38 to 65.
-In many developing countries, poor students who cannot afford tutoring may fall behind their peers. A program in India hired local women with high school degrees to tutor 3rd and 4th graders who had fallen behind. The numbers for the cost is an example of success. The two year program raised the likelihood of a child performing at first-grade math level by 11.9 percentage points, and at second grade language level by 9.9 percentage points. At the end of the two years, these children were performing 0.28 standard deviations higher on the test scores, equivalent to having attained an additional year of schooling, at a cost of 5 dollars/child, because teacher-certifications were not mandated and they paid the market rate for less-qualified tutors instead of the gvt. rate for teachers.
-In Balochistan province, Pakistan, in an effort to increase girl enrollment, "randomly selected neighborhoods were given 100 girls' scholarships of 100 rupees per month (= USD 3$) to try to induce a school operator to try and open a school in the area. In urban areas, even this modest sum was sufficient to get schools to open, and enrollments for both girls and boys rose relative to control neighborhoods. (control is a scientific term, here...) The schools were opened at 1/4 of the cost of a public school. (lesson: in rural communities, schools opened but they were not self-sustaining. Areas that would have been able to raise public schools in the absence of a subsidy will support private school options to support enrollments-in other words, areas with the greatest elasticity of supply for private schools).
-private schools are a more important element of school supply in developing countries than in developed ones. Private schools will often have excess capacity, where vouchers can expan access more cheaply than building new schools. Voucher students in one study were 10% more likely to complete the 8th grade, and scored 0.2 standard deviations higher in standardized tests, equivalent to adding an additional year of school. They were also less likely to marry young, cohabit, and engage in child labor. The gains were permanent and not transitory. The voucher cost was 228 dollars per recipient, compared to the much higher value of the induced additional years of schooling and cognitive attainment.
Conditional Cash Transfers
-Latin American countries have done this, giving money to families in exchange for parents sending their children to school, and sometimes other components, like nutritional supplements and mandated health clinic visits, as well as health training for mothers. Countries like Argentina, Bangladesh, Brazil, Colombia, Costa RIca, Honduras, Jamaica, Mexico, Nicaragua, Turkey, Chile, Ecuador, and Peru. These programs are most effective where large numbers of children are not in school, and so have been aimed at the lowest income strata of society, and rural areas.
There is a table of Benefit Cost Ratios (BCR) at 3% and 5% discount rates, of various efforts to reduce illiteracy:
health and nutrition
Bolivian preschool nutrition, 3.66/2.48
Kenyan deworming, 642/472
Kenyan preschool nutrition, 77/58
Iron supplements to secondary students, 45.2/32.1
scholarship/voucher programs
Columbia secondary school urban voucher, 4.41/3.31
Pakistan urban girls scholarship, 17.4/12.9
Pakistan rural girls' scholarship, 10.1/7.1
India balsakhis tutorial program, 711/528
Uganda free primary school program, 26.3/19.3
conditional cash transfers
Mexico Progresa, 6.8/5.1
Nicaragua RED, 3.8/2.8
Keep in mind that a BCR of 3.8 means a 1 dollar investment yields an almost 4 dollar return.
A BCR of 642 is AMAZING...
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