6 - Education & Health Flashcards
What is human capital?
The quality of labour - skills and abilities of workers, both cognitive and non-cognitive.
The link between education and human capital?
Education is only investment into HC, not HC per se.
What do they mean with ends and means?
That HC and education is not only investments that contribute to development but also an outcome of development. For ex in different development measures, like HDI, we measure educ and health as development.
Is it enough to increase access to schools?
No, must focus on both quantity and quality of schools. Enrollment is just a first step to human capital, must make sure that children attend, are motivated, teachers’ presence, teachers’ skills, resources etc.
Gross enrollment rate (GER)
How many children in a specific school category (primary ex) divided by those who are in the right age. Often above 100 since some must repeat a year etc. More spread out in poor countries. Like a triangle narrowing against 100 for richer.
GER for secondary
An upward sloping line, which indicates that rich countries have a much higher GER for higher education, while the fitted line for GER for primary is quite stable around 100.
Mention 7 measures of education:
- GER (all ages)
- NER (right age)
- OOS (out of school)
- Grade completion
- Grade retention (don’t pass to next grade, drop-outs etc)
- Educational attainment (avg completed years for adults)
- Learning achievements/test scores (PISA + national tests).
Quality vs quantity biggest concern now?
Quality! Massive increase in number of schools, ex measured by distance to school, instruction hours etc. BUT this has lead to reduced quality…
Measure quality of education:
- school inputs: teacher attendance, teacher skills, resources per peers.
- teaching at right level
- test scores
- value added/students learning
Demand for education: simple model
Parents will demand school for their children if:
i+delta(w1-w0)>c+w0,
in other words, if the intrinsic value plus the discounted future benefits are larger than the cost of schooling + the wage lost during the school years.
What determines the expected returns, w1?
- Employment opportunities for educated labor
- Opportunities to use education in agri or self-employment
- Information of benefits
- School quality
- Who gets the return, child or parent?
- Complimentary assets
What determines the discount factor, delta?
Different between rich and poor HH, depends on access to credit (if access then invest is always better than not), hunger and stress of poverty, intergenerational transfers (richer parents transfer more to their children and educ is a good transfer).
What determines the cost, c?
- School fees
- Transportation cost
What determines the foregone wage, w0?
In poor areas, child labor is very common and w0 is determined by children’s work opportunities.
Ex. ban on child labor should increase demand for education.
Conditional cash transfers (for education):
CCT has proven to be good for creating incentives AND at the same time solve the liquidity constraints.
- Families receive cash, but only if their kids attend school.
(price effect - relative value of school in comparison to alt. increases)
Policies to increase demand for education:
- Scholarships
- Removal of fees/free books and uniforms
- School meal
- Medical services in school
- Improves transport
- Increased supply
- Information about benefits
- Child labor laws
Two recent ideas on how to get the best improvements in schooling?
- Customize teaching level to student learning level. Ex waste of resources to give a child a computer if not knowing how to use it. Adaptive software instead.
- Repeated teacher training programs
Positive externalities with educ?
Yes, educated people will create growth and democracy.
Mincer wage equation:
The equation estimating the expected percentage wage increase one could have if increased schooling by one year.
ln(w)= a+B(edu)+U
B interpretation in wage equation:
One year of additional schooling will increase wage by B%: BUT we have a “ability bias” here due to omitted variables. So this percent will not hold for all.,
Does the supply of workers affect the returns of education?
Yes, if there is scarcity of educated workers, it will give you more returns to educate yourself. If supply is already high, like in MDCs, the returns are lower. BUT there must also be a demand for skilled labor, otherwise your gains will not pay off in the labor market. It’s a puzzle of supply and demand.
Diminishing returns to education, but how do poor people believe it is?
They often tend to think that the returns to education is S-shaped which lead them to invest all in one child. They only see poor people who have failed or occasionally one who succeed.
Returns to education other than earnings:
- Social returns
- Delay fertility
- Democracy
- Innovation
Education as signaling device:
In the labor market, education signals that you have some level of ability that others might not have. Not always good, since the educated who gets the job might be less productive.
Difference in why people diy in poor/rich countries:
In poor, often due to infections. In rich countries often chronic diseases such as cancer, diabetes, lung disease etc.
WHO definition of health:
“A state of complete physical, mental, and social wellbeing and not merely the absence of disease and infirmity”
–> hard to measure in one measure.
Life expectancy at birth:
A mortality rate att all ages: if a person born today went through life being subject to todays age-specific mortality rates at each age, this is her expected life-length.
Infant mortality rate:
Deaths before first birthday per 1000 babies born
Burden of disease
Years in good life lost either due to early death or due to disabilities. A year not lived at all = -1, a year in disability is counted between 0-1 using DALY (disability adjusted life years)
Self-reported measure (health)
Reporting illness, activities, general health, mental health conditions - ps people can perceive the same conditions differently, you get used to the way you live so minor changes may change this measure drastically.
Anthropometric measures
- Height-for-age z scores (related to long-term malnutrition)
- Weight-for-height z scores (short-term malnutrition)
- Birthweight
Blood test (health)
Can detect micro-nutrition deficiencies and also diseases such as HIV, stress levels etc.
Main reason to why we don’t leave health care completely to the market:
Because of the large positive externalities that come with many health investments, which will lead to underinvestment. Individuals will underinvest and therefore the public investments are crucial.
+ large asymmetric info problems which make it hard to distinguish bad/good health providers –> bette to have a state-owned option.
+ health care should not depend on income
Problem with health care supply in LDCs?
- Often wide range of providers
- Diagnosis by unqualified providers
- Little testing, ask few question
- Counterfeit drugs
Problem with health care quality in LDCs?
- lack of resources
- lack of qualified staff
- lack of appropriate incentives (know-do gap)
Price elasticity of health in LDCs?
Very high! Even small changes in price can reduce demand drastically. This is typical for preventative health, curative health is lower.
Why price sensitive for preventative health care?
Lack of knowledge, liquidity constraints, time-inconsistent preferences
3 reasons to subsidy health products:
- Externalities
- Make them affordable and used by poor people
- Give people the opportunities to learn about benefits
3 drawbacks of subsidy health:
- Not necessarily increase use a lot
- Be inefficient since it will also sub the use for the richer
- Anchor peopleäs WTP at low levels.
Good/bad products to subsidy:
Better to subsidy products such as bednets against malaria, but more tricky for meds that we don’t want to be overused –> bette rto focus on increase the knowledge on setting diagnosis.
Link between health and income:
On the individual level we see a clear improvement - especially for good health in early stages of life. It increases wealth so that the worker is more productive. But in macro-level less clear since it decrease both mortality and morbidity!! Think of the difference…
