Peter Ferrandi 3/15/11 Cases in Economic Analysis Education Analysis

Education is one of the most important aspects of a society. It is the means by which accumulated knowledge, skills and values are transmitted. However, a multitude of nations-developing nations specifically--face the problem of poor education; these nations also face a long list of challenges and road blocks in regards to fixing this problem. This very issue is discussed by Arye L. Hillman and Eva Jenkner in the article Education Children in Poor Countries. This article was published in 2004 by the International Monetary Fund. Hillman and Jenkner explore these educational issues in an attempt to shed light on the various issues and perhaps on certain solutions. According to the Hillman and Jenker, children have a right to good, free education. This statement is certainly mirrored by the majority of the world. In fact, the United Nations declared this as one of the millennium development goals for 2015. This goal specifically is to ensure that children everywhere will be able to complete a full course of primary schooling by 2015; the goal is to achieve universal primary education. Many of these developing nations are making progressive attempts to remedy the education problems, however the hope that this goal is achieved appears to be dwindling. According to the U.N., the two areas that seem to have the most problems are Sub-Saharan Africa and Southern Asia; these areas have the most children out of school. Problems of inequality based on traditional, cultural norms also threaten the goal of universal education. This inequality relates mostly to gender and this is illustrated by the disparity between females and males in terms of school enrollment. Clearly, girls are not enrolled in school at the same level that boys are. The goals above must have logical, legitimate reasons as to why they are important. The authors make the statement that it is more of a cost to society as whole to not educate children

Peter Ferrandi 3/15/11 Cases in Economic Analysis Education Analysis

than the cost would be to make sure all children are educated. It is true that those who are uneducated have much harder times finding jobs, securing them and subsequently making contributions to society. Children who receive no primary education in turn become uneducated adults. In terms educating the women, those women who have a higher education also have lower infant mortality rates; they have the knowledge to care better for their children, as well as teach their children proper skills. Education is an entitlement of prime importance, therefore government should bear the cost of those who are too poor to pay for school. However, due to the developing nature of these nations, they cannot (or sometimes will not) bear these costs. The poorer nations being discussed typically are located in Sub-Saharan Africa, South Asia, East Asia and the Pacific. East Asian, in terms of enrollment, has a high level at approximately 99%. The other areas that have been discussed are at a much lower level. South Africa is at approximately 77% and Sub-Saharan Africa is at approximately 50%--this being the lowest. The problems do not just stop when enrollment rates go up nor when completion rates go up. Certainly, these percentages increasing would have positive effects, but they would not solve all problems inherent. According to the authors, there are societal, economic, and cultural flaws inherent in these nations. It is those of whom within these developing nations that are most poor receive an even worse education. While those born into a higher economic class or social class tend to receive a much better education. As stated before, there does seem to be a disparity in education between gender as well. Women by and large tend to have lesser enrollment rates and receive overall less education. The role of mother in these areas is a very strong, important role. An educated mother tends to produce more clean, safe, educated children. The opposite holds

Peter Ferrandi 3/15/11 Cases in Economic Analysis Education Analysis

true. The gender disparity is typical in South Asia as well as Africa. Children with disabilities are also out of a proper education due to the inability to supply the proper facilities. One can view these issues in an economic context as well. This can be achieved by examining basic economic principles such as supply and demand. Perhaps, some of these problems can be attributed to the fact that there is a weak demand for education. Factors for a weak demand could be: monetary cost, opportunity costs and even a perception of received value. Families that are very poor must first worry about covering their pure, basic needs such as food, clothing and shelter. Even primary school may have costs associated with it; these costs can be in the form of user payments or even just extra clothing that would be needed for school etc. Opportunity costs arise because families my simply need their children around the home in order to help take care of various tasks. Therefore, the parents would not be willing to send their children to school because of the need for their help at home. Perceived value for education may be low because they do not see much gain from it. This may be due to ignorance of job opportunities, or even the fact that jobs are not certain. Equally, supply side shortages may occur. This typically would be due to the inability of the government to pay and provide proper educational institutions/programs. The elites within these nations do much to ensure that the status quo is maintained. They would rather use the government spending on more lucrative ventures based on self interest. Many of these poor nations suffer from corrupt governments and false political systems. Much of the money that the government receives is used dishonestly for elite interest.

Peter Ferrandi 3/15/11 Cases in Economic Analysis Education Analysis

The authors discussed user payments in great detail. Citizens helping to pay out of pocket may increase attendance if it is a supply side issue. However, it is far less likely to produce significance improvement if the problem is rooted in demand side weakness. If there is a high demand, but the government simply cannot supply the education, then of course user payments would help ease this disparity in interest. Yet, user payments may serve little effect if the problems are due to demand because the factors are not based in monetary needs but rather in cultural and societal beliefs. This can be used as an argument against user payments. An argument for user payments would be that they may increase education quality. This perceived increase in quality relates to a perceived increase in value; therefore, parents may be more willing to make user payments themselves in order to send their children to school. In this sense, improvements due to user payments may very well increase overall demand for education. Quality may increase due to parents being more likely to make sure the school system is being run properly. It should be known that a full publicly funded education system is far more desirable for a civilized society. The ability for the poor to have education for free is best. Depending on the expense of the user payment, the poor may not be able to afford it. This could create an even greater disparity between the rich and poor. In my opinion, it does seem wrong and unfair for a child to miss out on an education due to his/her parents inability to make user payments. The authors suggest that the government monitor which families pay which amount based upon the families income; this would be a means to lessen the economic class disparity.

Peter Ferrandi 3/15/11 Cases in Economic Analysis Education Analysis

Personally, user payments seem to be effect in some ways, but less effective than finding a way to supply education through a universal system. Majority of the families within these developing countries are struggling for the most essential, basic needs such as food and clothing. It seems unfair and ineffective to ask these very people for more money to pick up the slack on the education system. I believe a significant number of citizens would not pay the fees because they simply would not be able to. Attempts to reduce corruption and reduce the impact of the elites affect on policy may help remedy the situation over time. This being said, the notion of a universal education system for developing nations by 2015 seems highly unlikely at this juncture in time.