Effects of Education

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Effects of Education:


Governments generally have a strong direct involvement in the funding and provision of school education at various levels. Therefore, public policies in these areas have a major impact on the country’s accumulation of human capital. For a given level of initial per capita GDP, a higher initial stock of human capital reflects a higher ratio of human to physical capital. This high ratio generates high economic growth through at least two channels. First, greater human capital facilitates absorption of better technologies from leading countries. This channel is likely to be particularly important for schooling at the secondary and higher levels.
Second, human capital is more difficult to adjust than physical capital. Therefore, a country that begins with a high ratio of human to physical capital—such as after a war that primarily destroyed physical capital—grows faster by adjusting the amount of physical capital upward. The high level of schooling in the development panel is that many countries follow discriminatory practices that prevent the efficient exploitation of well-educated women in the formal labor market. Given these practices, it is not surprising that more resources devoted to higher levels of female education would not appear as enhanced growth. Female primary education indirectly promotes development by encouraging low fertility.


Effect of education on improving productivity:

Various theories are widely used to explain labor market outcomes. These models offer different approaches to study the effect of education on employment prospects and productivity. Below are three such models.

(i) Human Capital Model:

Human capital theory is widely used to explain labor market outcomes. The essence of the theory is that investments in human resources are made to improve productivity, and hence employment prospects and incomes. Individuals acquire skills through formal schooling and/or work experience, and these skills increase the individual’s value to employers and therefore their future earnings. Several key elements of human capital theory are worth noting. First, it is a theory of investment decisions: individuals incur costs in the present in exchange for benefits in the future. This investment dimension is particularly important because the benefits of human capital acquisition are typically accrued over the long term, in the form of a higher income stream over many years. Second, because future returns will usually be accompanied by uncertainty about the extent to which the investment will pay off. Human capital investment is generally a risky investment.

Third, a major component of the cost of acquiring human capital is usually the opportunity cost – income forgone.
e not working. Decisions about education—both the time devoted to schooling and the choice of educational programs—will be influenced by both the “investment” and “consumption” components of human capital formation. The latter refers to the fact that learning can be a very enjoyable activity for some, but a less enjoyable or even unpleasant activity for others. Other factors being equal, individuals who enjoy learning are more likely to stay in school longer. Similarly, other things being equal, students are more likely to choose educational programs that they find interesting and motivating. An important distinction is that between private and social returns to human capital formation. Personal returns are those which are based on the expenses incurred and benefits received by the person receiving the education. These benefits include both the consumption and investment consequences of schooling. Social returns are based on the costs incurred and benefits received by society as a whole. There can be a distinction between private costs and social costs, as well as between private and social benefits. This distinction is important because individuals can be expected to base their schooling on the lifetime earnings profile of more educated workers above the equivalent income profile of less educated workers.

(ii) Signalling/Screening Model:

Human capital theory emphasizes the role of education as enhancing the productive capabilities of individuals. An opposite view of learning, where it has no effect on individual productivity, is the signaling/screening model. According to this theory, education can act as an indicator of the productive potential of individuals. Central to this theory is the importance of imperfect information. In their hiring decisions, employers are incompletely informed about potential employees’ abilities. So they can use education as an indication of the new hire’s future productivity. If the employers’ beliefs are later confirmed

In anecdotal experience (that is, if more educated workers become more productive), employers will continue to use education as a signal. Thus employers will offer higher wages to more educated workers. Faced with a positive relationship between education (which is expensive to obtain) and wages, individuals are motivated to invest in education.

You will get enthusiasm.

A central assumption of the signaling model is that education is less costly for individuals who are innately more skilled or capable. If this assumption holds, high ability individuals will invest more in education than low ability individuals. Both high and low ability individuals face similar potential benefits from investing in schooling, but lower ability workers face higher costs and will therefore receive less education. Under these circumstances, employers’ beliefs about the relationship between education and worker productivity would be confirmed. Even though schooling does not (as assumed) have any effect on worker productivity, employers have an incentive to pay higher wages to more highly educated workers and individuals with higher potential have an incentive to invest in education.

In this model, education acts as a “sorting device”, separating high from low ability workers. Like human capital theory, the signaling/screening model can explain the positive relationship that exists between schooling and labor market outcomes such as earnings. However, there are important differences between the two theories. In the human capital model, education is both private and socially productive. In contrast, in the indicative model, education is privately productive (investing in education benefits individuals of high potential) but not socially productive because education has no effect on the total goods and services produced by society. . Another important difference is that in the human capital model, schooling has a causal effect on workers’ productivity and thus earnings.

In the signaling theory, education has no effect on worker productivity, so education has no effect on earnings. Rather, the positive relationship between schooling and earnings arises because both variables are related to a third factor – worker competence. In many circumstances, the worker’s ability is not observed, so it is difficult to determine whether the positive relationship between education and earnings arises because schooling increases workers’ productive capacity (the human capital explanation) or because schooling increases workers’ productive capacity (the human capital explanation). Education sorts out individuals of high and low potential.

(iii) Job-matching or information-based model

In the human capital model, individuals choose among alternative educational programs according to the cost of these programs and the associated lifetime income streams (and other benefits) that they generate. The information can play a role in helping to identify or predict the benefits of alternative educational options. An Alternative View of the Educational Process
The gist is that it helps individuals determine what type of career they are best suited for. In this case, education plays the role of providing individuals with information about their comparative advantages—what types of occupations and jobs they are likely to do well in. This system is characterized by job-matching and information-

based model. The perspective is similar to human capital theory in many ways, including its implication that education has both personal and social benefits. However, the emphasis is different. Human capital theory emphasizes the acquisition of skills that are valued by the labor market, whereas job matching models emphasize the acquisition of information about one’s abilities and aptitudes. Human capital theory focuses on the direct enhancement of skills provided by schooling, while information-based models highlight the role of education in identifying the most productive applications of a given skill. The job matching approach also has important implications for the interpretation of the return of work experience. It views Jobs as a niche, or firm-worker.


Evidence on the outcomes of education and skill development:

1. Many people invest in education in the belief that doing so will bring future benefits such as greater employment opportunities, higher earnings, and more interesting and diverse careers. Similarly, many public policies encourage individual citizens to increase their educational attainment and enhance their skills and knowledge. Increases in educational achievement and skills are not necessarily valuable to them, but are often believed to result in better labor market and social outcomes.

2. Schooling can have many consequences for individuals and society. For many people, the educational process has some consumption value. Humans are curious creatures and enjoy learning and acquiring new knowledge. Even focusing on investment aspects, education can enable people to fully enjoy life, appreciate literature and culture, and become more informed and socially involved citizens. While these and other potential consequences of schooling are important and should not be overlooked, the consequences of education for employment, productivity, and earnings are also significant.

3. As many studies have documented, schooling is one of the best predictors of “who gets ahead”.

Better educated workers earn higher wages; They have greater growth in income over their lifetimes, experience less unemployment, and work longer hours. Higher education is also associated with longer life expectancy, better health, and less involvement in crime. As many studies have documented, schooling is one of the best predictors of “who gets ahead”. Better educated workers earn higher wages; They have greater growth in income over their lifetimes, experience less unemployment, and work longer hours.

4. Higher education is also associated with longer life expectancy, better health and less involvement in crime. Estimation of life-cycle income profiles from data on groups of individuals with different levels of education. Combining these projected income profiles with information on the costs of pursuing additional education — both

5. Direct cost and opportunity cost associated with income forgone from not working – allows estimation of the implicit rate of return on investment in additional education. For example, the rate of return on a university degree compared to a high school diploma is estimated using life-cycle income profiles for these two groups, as well as the likelihood of entering the labor force after completion. With information on the direct and opportunity costs of attending university in comparison. High School.

6. The second approach is based on the estimation of an earnings function in which a measure of earnings is regressed on years of schooling (or highest level of educational attainment), years of labor market experience, and additional variables controlling for other effects on earnings. goes. This earning function approach is widely used because it readily provides an estimate of the rate of return on education, as well as insight into the relative magnitude of other effects on earnings.

7. The strong positive relationship between education and earnings is one of the most well-established relationships in the social sciences. However, many social scientists have been reluctant to interpret this correlation in the sense that education exerts a causal effect on earnings. According to human capital theory, schooling increases earnings because it enhances workers’ skills, thus making employees more productive and more valuable to employers. However, as discussed earlier, a positive relationship between earnings and schooling may arise because both education and earnings are related to unobservable factors such as ability, persistence, and ambition (hereinafter si
8. Known as MPLE
9. ―Qualification‖). If there are systematic differences between the less educated and the well educated that influence both schooling decisions and labor market success, then the relationship between education and earnings may reflect these other factors as well. According to signaling/screening theory, such differences may arise if employers use education as a signal of unobtainable productivity-related factors such as ability or persistence. Under these circumstances, standard estimates of return to schooling are likely to be biased upwards because they do not take into account unattainable “potential”.

10. In general, people with greater ability or motivation may be more likely to succeed, even in the absence of additional education. That is, the correlation that exists between income and education may reflect the contribution of unobserved effects rather than a causal effect of education on earnings, after controlling for other observed effects on earnings. This “omitted ability bias” issue is of fundamental importance not only to the question of how we should interpret the positive relationship between earnings and schooling, but also to the emphasis placed on education in public policies. The marginal return—the effect of additional schooling for someone with a low level of education—can be much less than the average return. Under these circumstances, education may not be very effective in improving the employment or earning prospects of relatively disadvantaged groups.


11. At the time of independence in 1947, India inherited an education system that was not only quantitatively small, but also characterized by regional and structural imbalances. Only 14 percent of the population was literate and only one in three children was enrolled in primary school. Low levels of enrollment and literacy were associated with sharp regional and gender disparities. Recognizing that education is vitally linked to the totality of the developmental process, reform and restructuring of the education system was accepted as an important area of state intervention. Accordingly, the need for a literate population and universal education for all children in the age group 6-14 was provided for with a precisely defined and delineated framework in the Indian Constitution as well as in the successive Five Year Plans.

12. The sustained efforts made by the government and other agencies have made an impact in various aspects of the Indian education system for the betterment, though inconsistencies still exist. Efforts to reform the education system in India are still going on and changes are being seen in various areas of education. The development that took place in various aspects of education during this period had its impact on social, political, social

on the physical, technical and other fields. Mutually, these aspects have worked towards the development of education. This chapter is specifically devoted to the analysis of the effects of development on educational outcomes of ‘mass schooling’ and ‘higher education’.


Aspects of mass schooling:


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The constitutional commitment to ensure free and compulsory education for all children up to the age of 14, under the scheme of universal primary education, has been a key feature of national policy since independence. This vision has been emphatically described in the National Policy on Education (NPE) 1986, and the Program of Action (PoA) 1992. In pursuance of the thrust embodied in NPE and POA, several schemes and programs were launched. These include Operation Blackboard (OB); Non-Formal Education (NFE); Teacher Education (TE); Women’s Statistics (MS); State specific basic education projects like Andhra Pradesh Primary Education Project (APPEP), Bihar Education Project (BEP), Lok Jumbish Project (LJP) in Rajasthan, Education for All Project in Uttar Pradesh; Shiksha Karmi Project (SKP) in Rajasthan; National Program of Nutritional Support to Elementary Education; and District Primary Education Program (DPEP).


Why education for all? ,

There are strong reasons for vigorously implementing universal primary education in India. Social justice and equality is in itself a strong argument for providing basic education to all. It is an established fact that basic education improves the level of human welfare – especially with respect to life expectancy, infant mortality rate and nutritional status of children etc. Studies have shown that universal basic education contributes significantly to economic growth. The following are other compelling reasons.

1. Constitutional, legal and national statements for UEE have from time to time upheld the objective of universal primary education.
2. The Constitutional Mandate 1950 states, “The State shall endeavor to provide, within a period of ten years from the commencement of this Constitution, to all children free and compulsory education until they complete the age of 14 years.”
3. National Policy on Education 1986 – “It shall be ensured that free and compulsory education of satisfactory quality is provided to all children up to the age of 14 before entering the twenty-first century”.
4. Unnikrishnan Judgment, 1993 – “Every child/citizen of this country has the right to free education till he completes the age of fourteen years.”

5. Education Ministers’ Resolution, 1998 – “Universal elementary education should be pursued in mission mode. It emphasized the need to pursue a holistic and convergent approach towards UEE.”
6. Report of the National Committee on UEE in Mission Mode: 1999 – UEE should be taken forward in mission mode with a holistic and convergent approach with emphasis on preparation of District Elementary Education Plans for UEE. It supported the fundamental right to education.
7. Article 26 of the Universal Declaration of Human Rights 1948 states that “Education should be directed at the full development of the human personality and at strengthening respect for human rights and fundamental freedoms.” It shall promote understanding, tolerance and friendship among all nations, racial or religious groups, and shall further the activities of the United Nations for the maintenance of peace.

Scenario so far: In a global sense, the right to education and the right to learn is unfortunately still a vision rather than a reality, although the demand for ‘educated people’ is increasing. today about 1000 million wi
The silent majority of women are termed as illiterate. More than 130 million children, nearly two-thirds of them girls, in developing countries do not have access to primary education. Against this alarming backdrop, the 1989 United Nations Convention on the Rights of the Child reaffirmed the right of every child to education.

The Indian scenario is slightly different. The effect of development can be seen in the field of education. As a result of several efforts, India has made a lot of progress in terms of increase in number of institutions, teachers and students in elementary education. The number of schools in the country increased fourfold – from 231,000 in 1950 – to 51 to 930,000 in 1989–99, while enrollment in primary increased almost sixfold from 19.2 million to 110 million.

At the upper primary level, enrollment increased 13 times during this period, while girls’ enrollment registered a whopping 32 times. The Gross Enrollment Ratio (GER) at the primary level has crossed 100 per cent. Admission in schools is not a big problem now. At the primary level, 94 per cent of the country’s rural population has access to schooling within a kilometer radius and 84 per cent at the upper primary level.

The country has made impressive achievements in the field of primary education. But the flip side is that out of 200 million children in the age group of 6-14, 59 million are still not attending school. Of these, 35 million are girls and 24 million are boys. There are problems related to drop-out rates, low levels of learning achievement and low participation of girls, tribals and other disadvantaged groups. There are still at least one lakh such habitations in the country where there is no schooling facility within a kilometer radius. Coupled with this are various systemic issues like

Inadequate school infrastructure, poorly functioning schools, high teacher absenteeism, large number of teacher vacancies, poor quality of education and insufficient funding.

In short, the country is yet to achieve the elusive goal of Universalisation of Elementary Education (UEE), which means 100 per cent enrollment and retention of children with access to school education in all habitations. To fulfill this deficiency, the government has started Sarva Shiksha Abhiyan.


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