An interesting view looking at improving the quality of lives for children instead of only focusing on additional years of schooling as the policies in Mexico and Nicaragua we looked at have done. These policies did include nutritional training and some quality of life issues, but most of the additional quality of life came from spending the women made of their own free will from the money received from the governments. A question I would pose after seeing this article would be whether children are more likely to spend more years in school if they are given the noted improvements in quality of life. Instead of forcing it, could the government focus on investing in disease control, nutrition, and school quality instead to entice young people to spend more time in school? Using the MC versus MB graph for education is a tricky proposition because human capital can have so many long-term effects on a society unlike an average investment. Getting out of a vicious cycle such as a poverty trap may be worth disturbing the natural equilibrium and could lift an entire nation out of an inefficient equilibrium in the long run.
This article uses a simple model that tells an important story. I feel that many people are under the impression that more years of schooling retains a high marginal benefit. However as depicted by the model, without quality improvements that shift the marginal benefit curve up,marginal costs will greatly outweigh the marginal benefits resulting in less of an incentive to increase human capital (opportunity cost for increased schooling becomes too high and individuals decide to enter the labor market). Without quality improvements that allow the gap between marginal benefits and marginal costs to shrink, we will continue to see a decrease in the amount of PHd's as we see in the U.S. currently, for example. The focus of schooling needs to shift from the importance of quantity of extra years of schooling to the marginal benefit received by quality improvements in those extra years of schooling. This will ultimately result in increased human capital and a more productive labor force, and the creation of a virtuous cycle.
It's interesting how this simple graph and blurb also kind of highlight the idea that it would be wise for resources to be more frequently allocated to primary education rather than secondary education (which, as has come up in our reading, is often not the case.) We've been thinking about this more in terms of inequality (as well as the notion that with more higher educated people, jobs that don't actually require higher education are beginning to look for it in employees), but the individual's marginal benefit/marginal cost curve highlights the general idea in a different way.
I really enjoy the use of the graph in this article; it really is impressive how the simplest economic model can have such policy implications. Although I agree with the author’s argument for quality over quantity when education is concerned, we need to consider that in the case of the extremely poor some children do not receive the lowest levels of schooling. As the author explains, at low levels of schooling marginal benefit is high and cost is low, as young children are not very productive laborers. However, in extremely poor households parents will benefit from any additions to their income even if the wages that their child receives may be very low, and at low levels of schooling the marginal cost is higher than the model may suggest. In these cases the policies we discussed in class today are more relevant. It is only once the children start attending school that the returns from improving the productivity of education can be realized.
As a follow up to Cailin's post, I too agree that the quality over quantity is crucical, in most cases. However, given the lack of acknowledgement in many developing countries of the positive benefits of education returns and the often insurmountable costs associated with education, would it not be more appropriate to drastically increase quantity to encourage attendance. The best way to combat the mentality that plauges poor households in developing nations would seem to be actually getting these children into schools and allowing their parents to empirically view the Human capital increases in their children. Essentially, if the quantity of education increased dramatically, more students would be readily able to attend school (presumably) and one would hope that an increase in quantity would correlate to an increase in quality. Perhaps if we focus our development initiatives more on agriculutural development and technological progress on the farm -- that requires some mechanical or technical knowledge received in schools -- poorer households who typically believe schooling has only a marginal effect, at best, would alter their behaviors and thinking on education. I think that Agricultural/Rural and Countryside Development has been frequently underutilized. A disproportionate number of poor households in developing nations and even in the developed world remain in rural areas -- and as has been done in many other policy arenas, we should focus our resources and research on those areas MOST AFFECTED adversely by these conditions.
As the title portrays, a little economics really does go a long way. The simple MC/MB curves depict the optimal level of schooling and show that there is more to this education story than merely years of schooling. As we all know, and the author points out, returns to education are diminishing. Therefore it does not make sense to only stress increased years of schooling. Rather the focus needs to be on improving the quality of schools and the education children receive. This issue can be tackled by building new schools, providing better training to teachers, and reducing teacher absenteeism (i.e. Duflo's interesting camera experiment). Other issues involve controlling tropic diseases and improving children's nutrition. All of these things will shift the MB curve to the right, which is essential.
"A little economics goes a long way", and the application of development economics is common sense that has been lost in the process of development. Allow me to explain myself...
I never would have thought of "encouraging teacher productivity" by handing them a camera and saying, 'take a picture every day with the class'. It is such a simple solution to a huge issue, but an incredibly unorthodox approach to productivity.
There is one point that I am not sure I entirely agree on however...relating to the MB v MC of schooling. Yes, when children are young, the MB of staying in school is high compared to working, but the article says that as individuals get older, the MB diminished because their wages increase; I find some discrepency with this. In situations where one would be considering the trade off between a primary education and child labor, it is one of the assumptions that the family NEEDS them to work for their livelihood. BUT, wages will only increase to a certain extent in an analogous manner to age. The salary cap for an uneducated, severe-poverty-stricken individual is astronomically lower than normal. I think that the MB of staying in school would be more than this graph demonstrates because as an individual stays in school, the possible MB from more school increases. There will be a pivotal point at which momentarily the mc will exceed the mb (when a child could earn slightly more money), but I dont see that time period lasting long enough to consider this a long-term-investment... A child begging on the street corner will make more money than a 15 year old girl. That is why it is frequently the case that we see girls carrying babies around when they beg or try to sell trinkets (its for the emotional effect), and why so many small children are working rather than young adults.
With that earning potential so low, if the family toughs it out, the mb of staying in school will soon pass the mc again.
Basically, I don't think that a linear function can describe the mc-mb of work v child labor. The salary cap is so low for impovrished, unskilled laborers that the graph should have some curve to it as the mb of education surpasses the mc again.
I think Ben's discussion brings up an interesting point: why exactly do citizens in developing countries not understand the increasing returns to education? Sure the MB and MC curves are approaching each other, but don't these people dropping out of school realize they could make more if they were educated through college (and if they get to college, its free in many developing countries).
I think there are three components to this problem. 1) People in developing countries with few personal connections suffer from imperfect information about the job market. 2) The envelope condition, mentioned in the article, makes people quit before they reach equilibrium because they think they're most of the way to meeting the necessary education standards. 3) As Prof. Casey has mentioned in class, often the jobs that require education are not terribly common in developing countries.
Sadly, I think these three factors interact to prevent citizens of developing countries from pursuing the education we would like to see them have.
This article highlights the importance of quality education and its relationship to health in a simple, efficient manner. I think that in order for these principles to come into play in the developing world, access to education and health needs to be dramatically increased and programs such as conditional cash transfers need to be expanded in distribution. There should be more focus on meeting MDG of achieving universal primary education. While it is true that the jobs requiring higher education are oftentimes not common in developing countries, everyone will benefit from being able to read, write and do simple arithmetic effectively. The author brought up a good point in saying that the productivity of a young child on a farm is low anyways, so there should be no excuse for that child not receiving basic, elementary education. I think that every worker, even a small entrepreneur in a developing country can benefit greatly from quality education. Also, I think that supplementing nutrition is a good idea and will provide incentive for families in LDCs to send their children to school.
I agree with Tara that in order to increase the education of those children in developing countries, there needs to be more focus on programs like the conditional cash transfer program and the nutritional programs that are ran by the government. To add to the model that the author has in the article, he could add marginal social cost and marginal social benefit, as we discussed in class. Since the ultimate goal is to increase school attendance/quality of education to help alleviate poverty to a certain point that is beneficial to society, it is the government's role to implement programs that encourage people to send their kids to school and to make their educational experience more beneficial. Examples of such prgrams are the conditional cash transfer program and programs that help fight diseases. This would increase marginal private benefit so that it would meet the marginal social benefit.
Like others have mentioned, I was impressed by the author's decision to utilize a simple model to explain a not so simple problem. In reading this article, I was frustrated to consider that things we generally take for granted (mainly related to health/disease) can have such an impact on one's education. I also saw this problem first-hand in Ghana last spring. My host brother frequently missed school growing up due to complications from malaria and he was relatively well off. Without addressing the importance of health in one's education (among other things), it seems hard to believe that people in LDC's will be able to break the cycle of poverty.
As the author and others have noted, simply increasing time spent in school will not in itself provide the benefit necessary for improved education. It seems quite logical that increasing the hours spent in the classroom will have a negligible effect if the kids are sick, and thus not there, or hungry and not able to focus. Financing needs to take a more comprehensive form than just finding more teachers/paying them to stay longer because no benefit is derived from this alone. In this case, quality is much better than quantity, meaning steps need to be taken to help kids get the most out of their education (fight disease/hunger, etc.) so the increased hours can actually make a positive difference for those in attendance.
The simple model offers deep insight into the problem of education in developing countries. The problem with the model is that it does not include externalities from education. This is an analysis of the marginal private cost v. the marginal private benefit of education, which, as we learned earlier, will generate an equilibrium below the socially optimum level because education generates positive externalities. (I believe this is sort of what Ben is alluding to when he says that a linear function is insufficient to explain the benefits of education.) These externalities are the justification for programs that "compel, trick, and bribe people to spend more years in school". However, assuming away externalities, or assuming that externalities from education in the developing world are not great enough to justify education beyond the privately optimum level, I agree with the author's claim that policy should focus on increasing the returns to investments in human capital.
Bleakley's earlier post on malaria and hookworm in the American South around the turn of the century was an especially interesting commentary. After reading the Kristof article, the thing that struck me as most important is not the policy itself but the applicability of the policy to the area it affects and the follow-through. The Bonos of the world are necessary to provide the initial "big push" that Rockefeller provided for the American South, but as Bleakley states, these pushes will only provide short to medium term benefits, unless there is the appropriate follow through (demonstrated by the Kremer-Miguel study in Kenya). And as Kristof claims, if these programs are not applicable, they will not do any good. Building schools is effective in Cambodia. Opportunidades is effective in Mexico.
I think that the little economics of this article does go a long way by demonstrating the complexity of the problem. I think I agree with Kristof that "It’s also clear that doing good is harder than it looks."
Apparently, this article articulates on the awareness of the nominal years of schooling, and the importance of human capital investments, referring to a simple MC v MB graph. However, it can be also said that depending on what kind of jobs (or occupations) are demanded in that country, people would have a different MC of studying. Therefore, the subsidies (eg. scholarships) for upper education could have diversity. It can be concluded that the MB curve is too much simplified, since it might not show a downward slope at certain points, such as studying in universities.
Regarding the fact that some teachers in LDC come to school only on the day when they get paid, it is obvious that the quality of the education greatly matters as well as the quantity (years of schooling) in order to enhance children's skills. Therefore, in one way, we can consider about conducting surveys on academic performance in order to measure the level of teachers.
This is a very unique and interesting look at improving human capital through education. Instead of advocating more education, he advocates better education. This seems like common sense but sometimes we get caught up in statistics that dont tell the whole story. Like we see 97% of kids are in school, and we are happy, but we later learn their teacher has the i.q. of a bullfrog. I agree we should improve quality as well as qauntity of schooling. The only question I ask is will this cause people to leave school at a younger age? If students reach the "your brain being less adept at learning the now-more-esoteric subjects" point earlier, will they enter the work force earlier? Will people be more educated or just educated at a younger age? It would seem so, but I do not really know for sure. Pretty interesting stuff.
The article proves the point of the author that "a little economics goes a long way in explaining things". The articles states that there are two ways to obtaining the same outcome. This is true for all markets. There is a demand side story and there is a supply side story. Some times one is more effective and socially optimal than the other. Similarly, in any market we can either reduce the marginal cost or increase the marginal benifits.
In this article the author is arguing that we should try to increase the benifit of the education by improving quality of schooling, improving nutritional qualities and health conditions.While these are certainly interesting ways of increasing education output in the market but as we have always said while some policies work in some context, they might not work in all contexts. Hence, whether supply side or demand side methods are used, whether MC or MB is being altered -- these decisions should be based on what is the best in the context of country we are focusing on.
Moreover, sometimes a combination of policies and methods need to be used to obtain the best outcome.
Although I appreciate the simplicity of this model, it is still a model with several assumptions that play out in complicated ways in the real world. The author does a good job of summarizing policy options to shift MB curves out, but none of these is a single solution and enhancing education will ltake a combination of several steps. As economists, I think we should turn to the evidence of what works (understanding that cultural, political, and social contexts are different in every country)rather than rely on a theory dictating that consumers will choose the optimal point of education given costs. Much of this evidence promotes conditional cash transfers, teacher attendance enforcement, malaria treatment, etc. We have read compelling arguments for these programs, and we should look towards tailoring them for different societies (with correctly appropriated foregin aid!!!)
Tying in a simple MC/MB curve depicts his argument nicely. I thought the accentuation of quality over quantity was particularly important, seeing as this creates the optimal maximization of benefits while keeping costs as low as possible.
Another point that I thought notable was the excerpt about the optimal point* where MC and MB cross. While it's true that in the long run a year or two of extra schooling negligibly affects earnings, it could mean extra debt for a decade of one's life. Sometimes a look at the short run is of great importance.
An interesting view looking at improving the quality of lives for children instead of only focusing on additional years of schooling as the policies in Mexico and Nicaragua we looked at have done. These policies did include nutritional training and some quality of life issues, but most of the additional quality of life came from spending the women made of their own free will from the money received from the governments. A question I would pose after seeing this article would be whether children are more likely to spend more years in school if they are given the noted improvements in quality of life. Instead of forcing it, could the government focus on investing in disease control, nutrition, and school quality instead to entice young people to spend more time in school? Using the MC versus MB graph for education is a tricky proposition because human capital can have so many long-term effects on a society unlike an average investment. Getting out of a vicious cycle such as a poverty trap may be worth disturbing the natural equilibrium and could lift an entire nation out of an inefficient equilibrium in the long run.
ReplyDeleteThis article uses a simple model that tells an important story. I feel that many people are under the impression that more years of schooling retains a high marginal benefit. However as depicted by the model, without quality improvements that shift the marginal benefit curve up,marginal costs will greatly outweigh the marginal benefits resulting in less of an incentive to increase human capital (opportunity cost for increased schooling becomes too high and individuals decide to enter the labor market). Without quality improvements that allow the gap between marginal benefits and marginal costs to shrink, we will continue to see a decrease in the amount of PHd's as we see in the U.S. currently, for example. The focus of schooling needs to shift from the importance of quantity of extra years of schooling to the marginal benefit received by quality improvements in those extra years of schooling. This will ultimately result in increased human capital and a more productive labor force, and the creation of a virtuous cycle.
ReplyDeleteIt's interesting how this simple graph and blurb also kind of highlight the idea that it would be wise for resources to be more frequently allocated to primary education rather than secondary education (which, as has come up in our reading, is often not the case.) We've been thinking about this more in terms of inequality (as well as the notion that with more higher educated people, jobs that don't actually require higher education are beginning to look for it in employees), but the individual's marginal benefit/marginal cost curve highlights the general idea in a different way.
ReplyDeleteI really enjoy the use of the graph in this article; it really is impressive how the simplest economic model can have such policy implications. Although I agree with the author’s argument for quality over quantity when education is concerned, we need to consider that in the case of the extremely poor some children do not receive the lowest levels of schooling. As the author explains, at low levels of schooling marginal benefit is high and cost is low, as young children are not very productive laborers. However, in extremely poor households parents will benefit from any additions to their income even if the wages that their child receives may be very low, and at low levels of schooling the marginal cost is higher than the model may suggest. In these cases the policies we discussed in class today are more relevant. It is only once the children start attending school that the returns from improving the productivity of education can be realized.
ReplyDeleteAs a follow up to Cailin's post, I too agree that the quality over quantity is crucical, in most cases. However, given the lack of acknowledgement in many developing countries of the positive benefits of education returns and the often insurmountable costs associated with education, would it not be more appropriate to drastically increase quantity to encourage attendance. The best way to combat the mentality that plauges poor households in developing nations would seem to be actually getting these children into schools and allowing their parents to empirically view the Human capital increases in their children. Essentially, if the quantity of education increased dramatically, more students would be readily able to attend school (presumably) and one would hope that an increase in quantity would correlate to an increase in quality. Perhaps if we focus our development initiatives more on agriculutural development and technological progress on the farm -- that requires some mechanical or technical knowledge received in schools -- poorer households who typically believe schooling has only a marginal effect, at best, would alter their behaviors and thinking on education. I think that Agricultural/Rural and Countryside Development has been frequently underutilized. A disproportionate number of poor households in developing nations and even in the developed world remain in rural areas -- and as has been done in many other policy arenas, we should focus our resources and research on those areas MOST AFFECTED adversely by these conditions.
ReplyDeleteAs the title portrays, a little economics really does go a long way. The simple MC/MB curves depict the optimal level of schooling and show that there is more to this education story than merely years of schooling. As we all know, and the author points out, returns to education are diminishing. Therefore it does not make sense to only stress increased years of schooling. Rather the focus needs to be on improving the quality of schools and the education children receive. This issue can be tackled by building new schools, providing better training to teachers, and reducing teacher absenteeism (i.e. Duflo's interesting camera experiment). Other issues involve controlling tropic diseases and improving children's nutrition. All of these things will shift the MB curve to the right, which is essential.
ReplyDelete"A little economics goes a long way", and the application of development economics is common sense that has been lost in the process of development. Allow me to explain myself...
ReplyDeleteI never would have thought of "encouraging teacher productivity" by handing them a camera and saying, 'take a picture every day with the class'. It is such a simple solution to a huge issue, but an incredibly unorthodox approach to productivity.
There is one point that I am not sure I entirely agree on however...relating to the MB v MC of schooling. Yes, when children are young, the MB of staying in school is high compared to working, but the article says that as individuals get older, the MB diminished because their wages increase; I find some discrepency with this. In situations where one would be considering the trade off between a primary education and child labor, it is one of the assumptions that the family NEEDS them to work for their livelihood. BUT, wages will only increase to a certain extent in an analogous manner to age. The salary cap for an uneducated, severe-poverty-stricken individual is astronomically lower than normal. I think that the MB of staying in school would be more than this graph demonstrates because as an individual stays in school, the possible MB from more school increases. There will be a pivotal point at which momentarily the mc will exceed the mb (when a child could earn slightly more money), but I dont see that time period lasting long enough to consider this a long-term-investment... A child begging on the street corner will make more money than a 15 year old girl. That is why it is frequently the case that we see girls carrying babies around when they beg or try to sell trinkets (its for the emotional effect), and why so many small children are working rather than young adults.
With that earning potential so low, if the family toughs it out, the mb of staying in school will soon pass the mc again.
Basically, I don't think that a linear function can describe the mc-mb of work v child labor. The salary cap is so low for impovrished, unskilled laborers that the graph should have some curve to it as the mb of education surpasses the mc again.
oops, i meant schooling v child labor
ReplyDeleteI think Ben's discussion brings up an interesting point: why exactly do citizens in developing countries not understand the increasing returns to education? Sure the MB and MC curves are approaching each other, but don't these people dropping out of school realize they could make more if they were educated through college (and if they get to college, its free in many developing countries).
ReplyDeleteI think there are three components to this problem. 1) People in developing countries with few personal connections suffer from imperfect information about the job market. 2) The envelope condition, mentioned in the article, makes people quit before they reach equilibrium because they think they're most of the way to meeting the necessary education standards. 3) As Prof. Casey has mentioned in class, often the jobs that require education are not terribly common in developing countries.
Sadly, I think these three factors interact to prevent citizens of developing countries from pursuing the education we would like to see them have.
This article highlights the importance of quality education and its relationship to health in a simple, efficient manner. I think that in order for these principles to come into play in the developing world, access to education and health needs to be dramatically increased and programs such as conditional cash transfers need to be expanded in distribution. There should be more focus on meeting MDG of achieving universal primary education. While it is true that the jobs requiring higher education are oftentimes not common in developing countries, everyone will benefit from being able to read, write and do simple arithmetic effectively. The author brought up a good point in saying that the productivity of a young child on a farm is low anyways, so there should be no excuse for that child not receiving basic, elementary education. I think that every worker, even a small entrepreneur in a developing country can benefit greatly from quality education. Also, I think that supplementing nutrition is a good idea and will provide incentive for families in LDCs to send their children to school.
ReplyDeleteI agree with Tara that in order to increase the education of those children in developing countries, there needs to be more focus on programs like the conditional cash transfer program and the nutritional programs that are ran by the government. To add to the model that the author has in the article, he could add marginal social cost and marginal social benefit, as we discussed in class. Since the ultimate goal is to increase school attendance/quality of education to help alleviate poverty to a certain point that is beneficial to society, it is the government's role to implement programs that encourage people to send their kids to school and to make their educational experience more beneficial. Examples of such prgrams are the conditional cash transfer program and programs that help fight diseases. This would increase marginal private benefit so that it would meet the marginal social benefit.
ReplyDeleteLike others have mentioned, I was impressed by the author's decision to utilize a simple model to explain a not so simple problem. In reading this article, I was frustrated to consider that things we generally take for granted (mainly related to health/disease) can have such an impact on one's education. I also saw this problem first-hand in Ghana last spring. My host brother frequently missed school growing up due to complications from malaria and he was relatively well off. Without addressing the importance of health in one's education (among other things), it seems hard to believe that people in LDC's will be able to break the cycle of poverty.
ReplyDeleteAs the author and others have noted, simply increasing time spent in school will not in itself provide the benefit necessary for improved education. It seems quite logical that increasing the hours spent in the classroom will have a negligible effect if the kids are sick, and thus not there, or hungry and not able to focus. Financing needs to take a more comprehensive form than just finding more teachers/paying them to stay longer because no benefit is derived from this alone. In this case, quality is much better than quantity, meaning steps need to be taken to help kids get the most out of their education (fight disease/hunger, etc.) so the increased hours can actually make a positive difference for those in attendance.
ReplyDeleteHere's a current NY Times article by Nicholas Kristof that has some interesting insight:
ReplyDeletehttp://www.nytimes.com/2009/11/22/books/review/Kristof-t.html?_r=1&scp=1&sq=education%20developing%20world&st=cse
The simple model offers deep insight into the problem of education in developing countries. The problem with the model is that it does not include externalities from education. This is an analysis of the marginal private cost v. the marginal private benefit of education, which, as we learned earlier, will generate an equilibrium below the socially optimum level because education generates positive externalities. (I believe this is sort of what Ben is alluding to when he says that a linear function is insufficient to explain the benefits of education.) These externalities are the justification for programs that "compel, trick, and bribe people to spend more years in school". However, assuming away externalities, or assuming that externalities from education in the developing world are not great enough to justify education beyond the privately optimum level, I agree with the author's claim that policy should focus on increasing the returns to investments in human capital.
ReplyDeleteBleakley's earlier post on malaria and hookworm in the American South around the turn of the century was an especially interesting commentary. After reading the Kristof article, the thing that struck me as most important is not the policy itself but the applicability of the policy to the area it affects and the follow-through. The Bonos of the world are necessary to provide the initial "big push" that Rockefeller provided for the American South, but as Bleakley states, these pushes will only provide short to medium term benefits, unless there is the appropriate follow through (demonstrated by the Kremer-Miguel study in Kenya). And as Kristof claims, if these programs are not applicable, they will not do any good. Building schools is effective in Cambodia. Opportunidades is effective in Mexico.
I think that the little economics of this article does go a long way by demonstrating the complexity of the problem. I think I agree with Kristof that "It’s also clear that doing good is harder than it looks."
Apparently, this article articulates on the awareness of the nominal years of schooling, and the importance of human capital investments, referring to a simple MC v MB graph. However, it can be also said that depending on what kind of jobs (or occupations) are demanded in that country, people would have a different MC of studying. Therefore, the subsidies (eg. scholarships) for upper education could have diversity. It can be concluded that the MB curve is too much simplified, since it might not show a downward slope at certain points, such as studying in universities.
ReplyDeleteRegarding the fact that some teachers in LDC come to school only on the day when they get paid, it is obvious that the quality of the education greatly matters as well as the quantity (years of schooling) in order to enhance children's skills. Therefore, in one way, we can consider about conducting surveys on academic performance in order to measure the level of teachers.
This is a very unique and interesting look at improving human capital through education. Instead of advocating more education, he advocates better education. This seems like common sense but sometimes we get caught up in statistics that dont tell the whole story. Like we see 97% of kids are in school, and we are happy, but we later learn their teacher has the i.q. of a bullfrog. I agree we should improve quality as well as qauntity of schooling. The only question I ask is will this cause people to leave school at a younger age? If students reach the "your brain being less adept at learning the now-more-esoteric subjects" point earlier, will they enter the work force earlier? Will people be more educated or just educated at a younger age? It would seem so, but I do not really know for sure. Pretty interesting stuff.
ReplyDeleteThe article proves the point of the author that "a little economics goes a long way in explaining things". The articles states that there are two ways to obtaining the same outcome. This is true for all markets. There is a demand side story and there is a supply side story. Some times one is more effective and socially optimal than the other. Similarly, in any market we can either reduce the marginal cost or increase the marginal benifits.
ReplyDeleteIn this article the author is arguing that we should try to increase the benifit of the education by improving quality of schooling, improving nutritional qualities and health conditions.While these are certainly interesting ways of increasing education output in the market but as we have always said while some policies work in some context, they might not work in all contexts. Hence, whether supply side or demand side methods are used, whether MC or MB is being altered -- these decisions should be based on what is the best in the context of country we are focusing on.
Moreover, sometimes a combination of policies and methods need to be used to obtain the best outcome.
- Aparajita
Although I appreciate the simplicity of this model, it is still a model with several assumptions that play out in complicated ways in the real world. The author does a good job of summarizing policy options to shift MB curves out, but none of these is a single solution and enhancing education will ltake a combination of several steps. As economists, I think we should turn to the evidence of what works (understanding that cultural, political, and social contexts are different in every country)rather than rely on a theory dictating that consumers will choose the optimal point of education given costs. Much of this evidence promotes conditional cash transfers, teacher attendance enforcement, malaria treatment, etc. We have read compelling arguments for these programs, and we should look towards tailoring them for different societies (with correctly appropriated foregin aid!!!)
ReplyDeleteTying in a simple MC/MB curve depicts his argument nicely. I thought the accentuation of quality over quantity was particularly important, seeing as this creates the optimal maximization of benefits while keeping costs as low as possible.
ReplyDeleteAnother point that I thought notable was the excerpt about the optimal point* where MC and MB cross. While it's true that in the long run a year or two of extra schooling negligibly affects earnings, it could mean extra debt for a decade of one's life. Sometimes a look at the short run is of great importance.