Human Capital: Education and Health in Economic Development PDF

HUMAN CAPITAL: EDUCATION AND HEALTH IN ECONOMIC Presentation By Group 3: Athelryn Cada Mhikaella De Guzman Mary Joy Digno Realyn Magadia Cristhel Masangkay THE CENTRAL ROLES OF EDUCATION AND HEALTH Education and health are basic objectives of dev...

HUMAN CAPITAL: EDUCATION AND HEALTH IN ECONOMIC Presentation By Group 3: Athelryn Cada Mhikaella De Guzman Mary Joy Digno Realyn Magadia Cristhel Masangkay THE CENTRAL ROLES OF EDUCATION AND HEALTH Education and health are basic objectives of development Health is central to well-being, and education is essential for a satisfying and rewarding life THE CENTRAL ROLES OF EDUCATION AND HEALTH Education plays a key role in the ability of a developing country to absorb modern technology and to develop the capacity for self-sustaining growth and development Health is a prerequisite for increases in productivity, and successful education relies on adequate health as well EDUCATION AND HEALTH AS JOINT INVESTMENTS FOR DEVELOPMENT Health and education are closely related in economic development Greater health capital may improve the return to investments in education HEALTH IS AN IMPORTANT FACTOR IN SCHOOL ATTENDANCE HEALTHIER CHILDREN ARE MORE SUCCESSFUL IN SCHOOL AND LEARN MORE EFFICIENTLY DEATHS OF SCHOOL-AGE CHILDREN ALSO INCREASE THE COST OF EDUCATION PER WORKER LONGER LIFE SPANS RAISE THE RETURN TO INVESTMENTS IN EDUCATION HEALTHIER INDIVIDUALS ARE MORE ABLE TO PRODUCTIVELY USE EDUCATION AT ANY POINT IN LIFE EDUCATION AND HEALTH AS JOINT INVESTMENTS FOR DEVELOPMENT Greater education capital may improve the return to investments in health Many health programs rely on skills learned in school (including literacy and numeracy). SCHOOLS TEACH BASIC PERSONAL HYGIENE AND SANITATION. EDUCATION IS NEEDED FOR THE FORMATION AND TRAINING OF HEALTH PERSONNEL. EDUCATION LEADS TO DELAYED CHILDBEARING, WHICH IMPROVES HEALTH.  IMPROVING HEALTH AND EDUCATION: WHY INCREASING INCOME IS NOT SUFFICIENT With higher income, people and As for normal goods: governments can afford to spend more income is spent on other goods on education and health, and with besides food greater health and education, higher part of the increased food productivity and incomes are possible expenditure is used to increase food variety without necessarily People will spend more on human increasing the consumption of capital when income is higher. calories  IMPROVING HEALTH AND EDUCATION: WHY INCREASING INCOME IS NOT SUFFICIENT Health status, once attained, also Also there are other important spillover affects school performance, as has been benefits to investment in one’s health or shown in studies of many developing education. An educated person countries. Better health and nutrition provides benefits to people around him leads to earlier and longer school or her, such as reading for them or enrolment, better school attendance, coming up with innovations that benefit and more effective learning. the community INVESTING IN EDUCATION AND HEALTH: THE HUMAN CAPITAL APPROACH Human capital is the term economists often use for education, health, and other human capacities that can raise productivity when increased. The analysis of investments in health and education is unified in the human capital approach. After an initial investment is made, a stream of higher future income can be generated from both expansion of education and improvements in health. The basic human capital approach focuses on the indirect ability to increase well-being by increasing incomes. SOCIAL V.S. PRIVATE BENEFIT COST Social costs of education Private costs of education The opportunity cost to society as (those borne by students a whole resulting from the need to themselves) increase more finance costly educational slowly or may even decline. expansion at higher levels when these limited funds might be more productively used in other sectors of the economy. In Figure 8.3a, expected private returns and actual private costs are plotted against years of completed schooling. As a student completes more and more years of schooling, expected private returns grow at a much faster rate than private costs, for reasons explained earlier. In Figure 8.3b, where social returns and social costs are plotted against years of schooling. The social benefits curve rises sharply at first, reflecting the improved levels of productivity of, say, small farmers and the self-employed that result from receipt of a basic education and the attainment of literacy, arithmetic skills, and elementary vocational skills. CHILD LABOR A widespread problem in developing countries. When children under the age of 15 work, their labor time disrupts their schooling and, in a majority of cases, prevents them from attending school altogether  Educational Gender Gap -male-female differences in school access and completion. THE GENDER GAP: DISCRIMINATION IN EDUCATION AND HEALTH Education and Gender Young females receive less education than young males in most low-income developing countries. Large majorities of illiterate people and those who have been unable to attend school around the developing world are female. The educational gender gap is especially great in the least-developed countries in Africa, where female literacy rates can be less than half that of men.  Empirical evidence shows that educational discrimination against women hinders economic development in addition to reinforcing social inequality. Here are at least three (3) reasons; The rate of return on women’s education is higher than that on men’s in most developing countries. Increasing women’s education not only Because women carry a increases their productivity (and hence disproportionate burden of poverty, any also earnings) in the workplace but also significant improvements in their role results in greater labor force and status via education can have an participation, later marriage, lower important impact on breaking the fertility, and greatly improved child vicious circles of poverty and health and nutrition, thus benefiting the inadequate schooling. next generation as well. THE GENDER GAP: DISCRIMINATION IN EDUCATION AND HEALTH Health and Gender Girls also face discrimination in health care in many developing countries. Women are often denied reproductive rights, whether legally or illegally. Broadly, health spending on men is often substantially higher than that on women.  CONSEQUENCES OF GENDER BIAS IN HEALTH AND EDUCATION Studies from around the developing Education of girls has also been world consistently show that shown to be one of the most expansion of basic education of girls earns among the very highest cost-effective means of rates of return of any investment. improving local health standards. Inferior education and health care access for girls shows the interlinked nature of economic incentives and the cultural setting  EDUCATIONAL SYSTEMS AND DEVELOPMENT TWO FUNDAMENTAL ECONOMIC PROCESSES The interaction between The important distinction between economically motivated demands social and private benefits and costs and politically responsive supplies in of different levels of education, and determining how many quality school the implications of these differential places are provided, who gets access for educational investment strategy. to these places, and what kind of instruction they receive.  THE POLITICAL ECONOMY OF EDUCATIONAL SUPPLY AND DEMAND: THE RELATIONSHIP BETWEEN EMPLOYMENT OPPORTUNITIES AND EDUCATIONAL DEMANDS The amount of schooling received by an individual, although affected by many nonmarket factors, can be regarded as largely determined by demand and supply, like any other commodity or service. Demand Side Two principal influences on the amount of schooling desired are: 1. Private Benefits of Education 2. Educational Costs Supply Side The quantity of school places is determined by political processes. The public supply is fixed by the level of government educational expenditures. These are in turn influenced by the level of aggregate private demand for education. The amount of schooling demanded that is sufficient to qualify an individual for modern-sector jobs is determined by the following factors: 1. The wage or income differential 2. The probability of success in finding modern-sector employment 3. The direct private costs of education 4. The indirect or opportunity costs of education DISTRIBUTION OF EDUCATION The foregoing analysis of forces operating for overeducation in developing countries should not lead us to despair over the possibility of fostering development through greater education. India had a much higher educational inequality as measured by the education. Gini (in fact, the Gini was 0.69) then South Korea did (0.22). Plotting the Gini coefficient for education against the average years of education  EDUCATION, INEQUALITY, AND POVERTY The educational systems of many developing nations sometimes act to increase rather than to decrease income inequalities. The private costs of primary education are higher for poor students than for more affluent students, and the expected benefits of (lower- quality) primary education are lower for poor students. As a result of these higher opportunity costs, school attendance, and therefore school performance, tends to be much lower for children of poor families than for those from higher-income backgrounds. This is greatly compounded by the lower quality of schools attended by the poor, plagued by poor teaching and teacher truancy and inadequate facilities. SOCIAL V.S. PRIVATE BENEFIT COST Secondary Level University Level This financial process of The government may pay eliminating the relatively poor the full cost of tuition and during the first few years of fees and even provide schooling is often compounded university students with by the substantial tuition. income grants in the form of stipends. HEALTH MEASUREMENT AND DISEASE BURDEN Disability-Adjusted Life Years (DALYs) The DALY is an alternative measure of health promoted by the WHO to help quantify the burden of disease from morbidity as well as from mortality. One DALY can be thought of as one lost year of “healthy” life. DALY = YLL + YLD. YLL = N*L YLD = P*DW A World Bank study found that absentee rates among health care workers in primary health facilities on which the poorer population depends was 43% in India in 14 states studied, 42% in Indonesia, 35% in Bangladesh, 35% in Uganda, 26% in Peru, and 19% in Papua New Guinea. Developing countries face a far more crippling disease burden than developed countries, especially regarding infectious diseases. Three major problems AIDS ·MALARIA PARASITES Development Policy: Health Challenges by Developing Countries Absolute poverty Cholera Malnutrition Dengue AIDS Leprosy Malaria Dracunculiasis Tuberculosis Chagas Disease Acute lower respiratory infections Leishmaniasis Hepatitis B Lymphatic Ascariasis Other Parasites Other diarrhoeal diseases HIV/AIDS Epidemic - 70 million people infected with HIV since the epidemic began - 37 million people have died from AIDS-related illnesses - Sub-Saharan Africa most affected, with 1 in 20 adults living with HIV Progress - 21 million people accessing antiretroviral therapy (ART) in 2017 - 80% of pregnant HIV-positive women had access to ART medicines - AIDS-related deaths fallen by more than half since 2004 - New HIV infections fallen by 47% from 1996 peak Malaria Crisis - Causes over 1 million deaths annually, mostly among African children and pregnant women - 500 million people severely ill with malaria each year - Can lower productivity and reduce growth rates Efforts to Eradicate Malaria - WHO's Roll Back Malaria Partnership - Combined approaches: targeted DDT spraying, draining swamps, mosquito bed nets, improved nutrition, and sealed houses - Increased international funding for malaria vaccine development Neglected tropical diseases (NTDs) are a major public health concern, affecting over 1.7 billion people worldwide, mostly in low- and middle-income countries. These diseases, including parasitic worms, schistosomiasis, and African trypanosomiasis, have devastating impacts on human health, economic development, and education. - 2 billion people affected by debilitating parasitic worms, with 300 million severely affected - 200 million people infected with schistosomiasis, resulting in 200,000 deaths annually - 55,000 people killed by African trypanosomiasis (sleeping sickness) each year Diseases and Impact: - Schistosomiasis: causes stunted growth, poor school performance, and serious health issues, including liver and kidney damage - African Trypanosomiasis: leads to sleeping sickness, killing cattle and causing abandonment of fertile land - Other NTDs: include leprosy, cholera, and dengue fever, among others BEHAVIOURAL ECONOMICS INSIGHTS FOR DESIGNING HEALTH POLICIES AND PROGRAMMES There is increasing work applying behavioral economics methods to facilitate building human capital in physical and mental health as well as in education. Recent research from this relatively new field has demonstrated how the design of program structures, outreach, and follow up can benefit from taking into account the approach of behavioral economics. Some of the findings, including two that are relevant to addressing HIV/AIDS, are reviewed. HEALTH, PRODUCTIVITY, AND POLICY PRODUCTIVITY Careful statistical methods have shown that a large part of the effect of health on raising earnings is due to productivity differences: it is not just the reverse causality that higher wages are used in part to purchase better health Robert Fogel has found that citizens of developed countries are substantially taller today than they were two centuries ago and has argued that stature is a useful index of the health and general well-being of a population. Increases in height have also been found in developing countries in recent decades as health conditions have improved. In most cases, rapid increases in average height earlier in the 20th century gave way to smaller increases by midcentury. Policy priority of health in development; not only is health a major goal in itself, but also it has a significant impact on income levels A healthy population is a prerequisite for successful development.  HEALTH SYSTEM Outside this formal system is an informal In WHO’s definition, health network used by many poorer citizens, system is all the activities whose which includes traditional healers, who may primary purpose is to promote, use somewhat effective herbal remedies or restore, or maintain health. other methods that provide some medical includes the components of benefits, such as acupuncture, but who also public health departments, may employ techniques for which there is hospitals and clinics, and offices no evidence of effectiveness beyond the of doctors and paramedics. placebo effect (and in some cases could cause harm).  HEALTH SYSTEM The WHO compared health systems around The study used five performance indicators to the world, revealing great variability in the measure health systems in the 191 WHO member performance of health systems at each states: income level. For example, Singapore was 1. the overall level of health of the population; ranked 6th, Morocco 29th, Colombia 22nd, 2. health inequalities within the population; Chile 33rd, and Costa Rica 36th—all of these 3. (health system responsiveness 4. the distribution of responsiveness within the developing countries ranked higher than the population United States. Clearly, much can be done 5. the distribution, or fairness, of the health with relatively modest incomes. system’s financial burden within the population. THANK YOU