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Fridays Academy: Education, Poverty Reduction and Economic Growth III

Ignacio Hernandez's picture

Like every Friday, from Raj Nallari and Breda Griffith's lecture notes on Economic Policies for Poverty Reduction.

 

Average Educational Attainment of Adult Population by Region, 2000

barro

Source:   Bruns, Mingat and Rakotomalala, 2003

 

 

In terms of inequality and educational attainment, the research is even more strongly established, with illiteracy one of the strongest predictors of poverty and unequal access to educational opportunity one of the strongest correlates of income inequality (Bruns, Mingat and Rakotomalala, 2003).  O’Connell and Birdsall (2001) and Birdsall and Londoño (1998) suggest that primary education is the “people’s asset” and that inequality in education has a strong and negative effect on growth, independent of the level of education and other factors such as trade openness and natural resource endowments.

 

Primary School Enrollment and Completion Rates; Selected Countries

Enrollment

Source:   Bruns, Mingat and Rakotomalala, 2003.

 

Improving completion rates are of critical importance for developing countries as the exhibit above demonstrates.  Research indicates that a completion level of at least five to six years of primary school—usually the length of a primary school cycle in most countries—is critical to sustaining lifelong literacy and basic numeric skills.  Moreover, low levels of human capital, such as less than 6-years of schooling are inadequate for ‘sustained economic development, stable democratic institutions or poverty reduction’ (Bruns, Mingat and Rakotomalala, 2003).  Once the threshold of six years of schooling is passed, countries are in a position to achieve a higher steady-state macroeconomic growth path.  The disparity between enrollment and completion rates that is highlighted by the exhibit above indicates that enrollment rates—whether net or gross—are only weakly correlated with completion rates. Bruns et al., (2003) note that the average enrollment ratio masks the schooling profile in which many more children begin school than complete it.  Quoting examples from Brazil and Indonesia respectively for the 1980s in which close to 100 percent of children were enrolled at grade 1, yet only 60 percent completed five grades in Brazil compared to 90 percent in Indonesia. No consistent relationship exists between enrollment and completion.

 

A number of reasons have been identified for the lack of a strong relationship between enrollment and completion. These include:

(1) family circumstances: family illness, the lack of material resources, or the family need for labor may all play a role;

 

(2) geographic location: children from rural areas have lower completion rates than children from urban areas in general.  Girls from poor families in rural areas are less like to complete primary school than boys in similar circumstances, although boys too are at a disadvantage. This could in turn reflect the need for child labor on family farms and/or cultural factors, where rural areas tend to hold more conservative views on the employment of girls. Turning next to the specific case of India, Filmer (2000) found that the enrollment rate for boys aged 6-in India in 1992 exceeded that of girls by 2.5 percentage points among children of the richest households; the difference for children of the poorest households was 24 percentage points in favor of boys.  Enrollment rates for girls from rich households exceeds that of girls from poor households by 55.4 percentage points—the difference for boys is 34 percentage points (Cohen and Bloom, 2005). 

 

(3) Improving enrollment and completion rates for girls is especially critical, given the marked gender differences in schooling prevailing in many developing countries.  Studies have shown that:

  • A year of schooling for the mother reduces child mortality by about 10 percent;

  • An additional year of female education reduces the total fertility rate by 0.23 births;

  • Educated women are more likely to send their children to—and keep them in—school;

  • An increase of 1 percentage point in the share of women with secondary education is estimated to raise per capita income by 0.3 percentage points;

  • Education increases women’s productivity and participation in the work force;

  • Educated women are better able to use environmentally friendly techniques (WB, 2001).

  • Improvements in women’s education in 63 countries accounted for 43 percent of the decline in malnutrition during 1970 to 1975 (Smith and Haddad, 2000).

Improving enrollment and completion rates—achieving UPE—extends beyond economic arguments.  Education helps in the achievement of all of the other Millennium Development Goals such as poverty reduction, gender equity, child and maternal health, lower HIV/AIDS and other communicable diseases, and environmental stability (Bruns, Mingat and Rakotomalala, 2003).  Recent research has found that increases in education for both males and females has a strong positive effect against HIV/AIDS. Researchers found that better-educated individuals have lower rates of infection, especially among younger people.