Role Of Education In Economic Development Ppt – Gross National Income (GNI) per capita measures the total annual income received by residents of a country.Japan, Sweden, Switzerland, and the U.S. have lower GNI. GNI can be misleading because it does not reflect cost differences. believes GNI statistics need to be adjusted using purchasing power parity (PPP) LO1: Explain what determines a nation’s level of economic development.

Nobel Laureate Amartya Sen – Economic development should be seen as a process of expanding real freedoms that overcome major obstacles to people’s freedom such as poverty, oppression, and the lack of public facilities, basic health care, and basic education. experience the Sen also asserts that economic progress requires the democratization of political communities to give citizens a voice

Role Of Education In Economic Development Ppt

The United Nations used Sen’s ideas to develop the Human Development Index (HDI) which based life expectancy at birth on educational attainment to determine whether the average income in a country meets the basic needs of life. Enough to make ends meet.

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Innovation and entrepreneurship are engines of long-term economic growth. Innovation includes new products, new processes, new organizations, new management practices, and new strategies. Entrepreneurs commercialize innovative new products and processes. Innovation and entrepreneurship create new markets and products. Help increase economic activity. What did not exist before, required a market economy and strong property rights

Countries with favorable geographies are more likely to engage in trade, and therefore, more open to market-based economic systems, and the economic growth they promote, Jeffrey Sachs estimated economic growth rates between 1965 and 1990. studied and found that developed more slowly than landlocked countries. Because coastal economies are completely landlocked, the country’s growth rate has been reduced to 0.7% per year. Tropical countries have grown more slowly than countries in temperate regions.

Countries that invest in education have higher growth rates because the workforce is more productive Countries in Southeast Asia offset their geographic disadvantages by investing in education Indonesia, Malaysia, and Singapore

Trend 1: Democracy has spread over the past two decades, many authoritarian regimes have failed to deliver economic progress to large sections of their populations, new information and communication technologies have reversed past economic progress without controlling access to censored information. has broken the ability of the state. 25 years have led to increasingly prosperous middle and working classes that have pushed for democratic reforms LO2: Identify the macro-political and economic changes taking place around the world.

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Trend 2: Spread of Market-Based Systems More countries have moved away from centrally planned and mixed economies towards market-based model command and mixed economies have failed to deliver the sustained economic growth achieved in market-based countries.

The transition to a market-based system involves deregulation – the removal of legal restrictions on the free play of markets, the establishment of private enterprises, and the way in which private enterprises operate Privatization – the transfer of ownership of state assets into the hands of private investors. convert to Creation of a legal system to protect property rights LO3: Describe how transition economies are moving toward market-based systems.

The risks of doing business in a country are a function of political risk – the possibility that political forces will cause drastic changes in a country’s business environment that adversely affect the profitability and other goals of a business enterprise Economic risk – the possibility of economic mismanagement cause drastic changes in a country’s business environment that adversely affect the profitability and other goals of a business enterprise Legal risk – the possibility that a business partner will opportunistically break a contract or violate property rights will seize LO4: Explain the implications for management practice of national differences in political economy.

The overall attractiveness of a country as a potential market and/or investment site for an international business depends on balancing the benefits, costs and risks associated with doing business in that country, other things being equal, the benefit-cost- Risk trade-offs. Politically stable developed and developing countries that have free market systems and no dramatic increases in inflation rates or private sector debt are likely to be most favorable.

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To operate this website, we log user data and share it with processors. To use this website, you must agree to our Privacy Policy, including the Cookie Policy. Education as Human Capital Education in Capability Perspective Implications for Evaluation of Projects Educational Indicators Rooted in Capability Perspective Trends in Educational Indicators Educational Policies Francesco Burchi Master HDFS

Harrod-Domar Model (1948): Solow Model (1957): An extension of the Harrod-Domar model, with the addition of input labor and technology. General Features: Growth depends on physical capital accumulation Drawbacks: What are residual factors? Francesco Burchi Master HDFS

In addition to material economic resources, every society also embodies an immaterial resource, human capital, which is primarily reflected in labor. The first proponents of this concept were: Theodore W. Schultz (1960) and Gary S. Baker (1961). Schultz: Growth rate > accumulation rate of physical capital. Reason: human capital accumulation. Later, human capital was included in development models: eg, Lucas and Romer. Francesco Burchi Master HDFS

5 What is human capital? Human capital is a capital good that depends on investment in people’s elements: – health, including nutrition – job training, which ensures specific skills to be used in the firm where the person works – Study programs for adults, such as extension services in agriculture, to acquire practical skills needed in the workforce. – Formal education, years of schooling. Francesco Burchi Master HDFS

Human Capital: Investing In Human Capital: The Path To Long Run Prosperity

Micro Unit of Analysis: Worker Macro Unit of Analysis: Economic System Micro Objective: Increase in Individual Productivity Macro Objective: Economic Growth = Economic Growth = Poverty Reduction Human Capital = Factor of Production to be added to the production function: Y = f (C ; L;H…) where H= human capital Francesco Burchi Master HDFS

7 Empirical Analysis (1) Although the human capital concept covers several dimensions, most empirical studies founded on this theory have focused on a single dimension: education. Education is usually measured by the variable “years of schooling”. Francesco Burchi Master HDFS

8 Empirical Analysis (2) Psacharopoulos (1971) applies the HC theory with the following hypotheses: 1. HC is measured only by education 2. Educational capital is measured only in labor-power. Francesco Burchi Master HDFS

9 Empirical Analysis (3) Psacharopoulos hypothesizes two different growth models. Schultz Model: Capital = Physical Capital + Human Capital. Investment in HC is further divided into 3 levels of education: elementary, secondary, tertiary. Denison Model: Human capital is not another factor of production, but is embedded in labor. Labor is more or less skilled according to the level of education completed. Francesco Burchi Master HDFS

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Using data for the period from several parts of the world, Tsakaropoulos (1971, 116–9) obtained the following results: The contribution of education to growth is relevant everywhere, but significantly larger in developing countries. The two models provide different results: the Schultz model outlines the significant contribution of education in only some countries (including the US). In none of the 13 countries, is tertiary education the most important. On average, the influence of education is divided into: primary (46%), secondary (40%), tertiary (14%). Francesco Burchi Master HDFS

This approach, which follows a neoclassical economic framework, assigns an absolutely crucial role to individuals in promoting economic growth. The authors study the economic returns of an investment in education, as a strategic sector. A person enters this approach only if he works. Francesco Burchi Master HDFS

12 Capability Approach 1980: Proposed by Sen and then re-addressed by Martha Nussbaum. Development = expansion of capabilities Not all capabilities, but those that are “valuable”. Francesco Burchi Master HDFS

Function: The set of things a person “is” and “does”. For example, being a professor, being healthy, being well educated etc. Work is a constitutive element of people’s lives. Capabilities: The set of things a person “can be” and “can do”; Alternatively, the set of all possible tasks, from which she chooses the final task (the resulting task). Francesco Burchi Master HDFS

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Education has a dual role for (human) development: – Direct role – Indirect role Indirect role is achieved through: Economic production Social change (sen “Human capital and human potential”) Francesco Burchi Master HDFS

Direct role: Being educated, for example, allows one to fully enjoy a cultural event, which directly improves the person’s life (Terzi, 2003). “Education nurtures processes of critical reflection and relation to others that are intrinsically moral and not merely instrumental” (Unterhalter, 1999). Indirect role: Being educated allows a person to earn more and increase their productivity, but it also allows them to participate in public debate, vote and, more broadly, be active. While the human capital approach recognizes the indirect (or instrumental) role played by economic output, the capability approach reflects all these aspects. “Education nurtures processes of critical reflection and relationships with others that are intrinsically moral and not merely instrumental” Francesco Burchi Master HDFS 30 Maggio 2008

I. Robeyns (2006) distinguishes the supportive role into individual-collective; Economic-non-economic. 1.a) Personal Economic Role: Being educated allows people to find better jobs, increase income, escape poverty. 1.b) Collective economic role: Being educated can enhance economic growth

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