ECO 2117 Study Guide - Final Guide: Capability Approach, Public Health, Production Function
21 Jun 2018
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LECTURE 6: THE CENTRAL ROLES OF EDUCATION AND HEALTH
The Central Roles of Education and Health
- Health and education are important objectives of development, as reflected in Sen’s
capability approach, and in the core values of economic development
- Health and education are also important components of growth and development –
inputs in the aggregate production function
Education and Health as Joint Investments for Development
- These are investments in the same individual
- Greater health capital may improve the returns to investments in education
Health is a factor in school attendance
Healthier students learn more effectively
A longer life raises the rate of return to education
Healthier people have lower depreciation of education capital
- Greater education capital may improve the returns to investments in health
Public health programs need knowledge learned in school
Basic hygiene and sanitation may be taught in school
Education needed in training of health personnel
Improving Health and Education: Increasing Incomes is not sufficient
- Increases in income often do not lead to substantial increases in investment in children’s
education and health
- But better educated mothers tend to have healthier children at any income level
- Significant market failures in education and health require policy action
8.2: Investing in Education and Health: the Human Capital Approach
- Initial investments in health or education lead to a stream of higher future income
- The present discounted value of this stream of future income is compared to the costs
of the investment
- Private returns to education are high, and may be higher than social returns, especially
at higher educational levels
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8.3 Child Labour
- A widespread phenomenon
- Problem may be modeled using the “multiple equilibria” approach
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- Government intervention may be called for to move to a “better equilibrium”
- Sometimes this shift can be self-enforcing, so active intervention is only needed at first
Assumptions of the Child Labour Multiple Equilibria Model
- Luxury Axiom: a household with sufficiently high income would not send its children to
work
- Substitution axiom: adult and child labour are substitutes (perfect substitutes in this
model), in which the quantity of output by a child is a given fraction of that of an adult
Other approaches to child labour policy
- Get more children into school : new village schools; and enrollment incentives for
parents such as in Progresa/Oportunidades
- Consider child labour an expression of poverty, so emphasize ending poverty generally
(traditional WB approach)
- If child labour is inevitable in the short run, regulate it to prevent abuse and provide
support services for working children (UNICEF)
- Ban child labour; or if impossible, ban most abusive forms (ILO)
- Activist approach: trade sanctions… but could backfire when children shift to informal
section; and if modern sector growth slows
8.4 The Gender Gap: Discrimination in Education and Health
- Young females receive less education than young males in nearly every low and lower-
middle income developing country
- Closing the education gender gap is important because:
Social rate of return on women’s education si higher than that of men in developing
countries
Education for women increases productivity, lowers fertility
Educated mothers have a multiplier impact on future generations
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find more resources at oneclass.com
Education can break the vicious cycle of poverty and inadequate schooling for
women
Consequences of gender bias in health and education: economic incentives and their
cultural setting; “missing women” mystery in Asia
Missing Women Crisis
- Research has concluded that in Asia at least 100 million women or more are “missing”
- If gender ratios were closer to normal levels based on biology, in comparison to other
regions such as Europe, North America or Latin America, that is the minimum number of
additional women who would be alive in Asia alone
- Some women are also missing in Africa but a much smaller proportion
- Reasons include inferior medical care for girls, and gender selective abortion or female
infanticide
8.5 Educational systems and development
- Educational supply and demand: the relationship between employment opportunities
and educational demands
- Social vs. private benefits and costs
- Distribution of education
- Education, inequality and poverty
- Education, internal migration and the Brain Drain
8.6 Private vs. social benefits and costs of education
- Distribution of education: Lorenz curves for the distribution of education
- Education, inequality and poverty
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Lecture 6: the central roles of education and health. Health and education are important objectives of development, as reflected in sen"s capability approach, and in the core values of economic development. Health and education are also important components of growth and development inputs in the aggregate production function. Education and health as joint investments for development. Greater health capital may improve the returns to investments in education. Health is a factor in school attendance. A longer life raises the rate of return to education. Healthier people have lower depreciation of education capital. Greater education capital may improve the returns to investments in health. Public health programs need knowledge learned in school. Basic hygiene and sanitation may be taught in school. Improving health and education: increasing incomes is not sufficient. Increases in income often do not lead to substantial increases in investment in children"s education and health. But better educated mothers tend to have healthier children at any income level.
