econ oct 21.doc

Econ October 21, 2008 Central roles of education and health Health and education are important objectives of development education plays a key role in the ability of a developing nation to absorb/improve modern technology health is a prerequisite in productivity Health and education are crucial inputs for the aggregate production function (GDP) like other traditional factors of production Greater health capital may improve the returns to investments in education: health is an important factor in school attendance healthier children learn more efficiently and become more successful in school healthier individuals are more able to productively Greater education capital may improve the returns to investments in health: success of health programs rely on skills learned at school (literacy and numeracy) schools teach basic personal hygiene and sanitation well-informed people will abstain from health-risking habits such as smoking Why increasing incomes is not sufficient development policy should focus on improving income, education, and health conditions simultaneously because: with greater income, governments and families are able to spend more on education and health with improved health and education standards, higher productivity and incomes are possible empirical data shows increases in income often do not lead to substantial increases in investment in children?s education and health provisions in developing nations The Human capital approach: human capital includes education, health, and other human capacities that can raise productivity when increased human capital approach examines the indirect effect of health and education in increasing utility by increasing productivity/efficiency, thus by raising output and income Financial Trade-offs in the decision to continue school Child Labor Child labor is a widespread problem in developing world. Why? Labor time disrupts children?s schooling or prevents children from attending school altogether Health of child workers is significantly worse than non-working children Working children are subject to harsh and exploitable working conditions Four Main approaches to child labor policy in developing world: World Bank Approach: recognized child labor as an expression of poverty recommends an emphasis on eliminating poverty rather than directly addressing child labor Education Approach: Emphasizes strategies to get more children into school Favors expanded school places (village schools) and cash transfer incentives conditional on that parents send children to school UNICEF Approach considers child labor inevitable in the short run asserts the need for alleviating measures such as regulation to prevent abuse and provision of support services for working children ILO Approach suggests banning child labor where possible favors at least prohibiting the most abusive forms of child labor (trafficking, debt bondage, drugs) Gender Gap: Women and Education in the developing world, young females receive less education than young males this results in an educational gap that can be measured in terms of male-female gaps in: adult literacy rates gross enrollment indices Closing the educational gender gap (improving women?s education) is economically desirable because: Rate of return on women?s education is higher than that of men in developing countries (why?) increases women?s productivity, improves child health and nutrition, and lowers fertility improved child health and more educated mothers have a multiplier impact on the quality of a nation?s human resources for many generations