THE EFFECT OD EDUCATION ON ECEONOMIC DEVELOPMENT

INTRODUCTION

Education is the process of facilitating learning, or acquisition of knowledge, skills, values, beliefs and habit. Education methods include storytelling, discussion, teaching, training and directed research (Dewey, J 1994). Education refers to the continuous process through which skills, attitudes, knowledge as well as abilities are acquired and developed from one person or generation to another. This is in a sense that one receives social competence and individual growth; that is to say it is a lifelong activity as one keep on acquiring it throughout his or life time on the universe (UNESCO, 2012).Education provides a foundation for development, the groundwork on which much of our economic and social well being is built. It is the key to increasing economic efficiency and social consistency. By increasing the value and efficiency of their labor, it helps to raise the poor from poverty. It increases the overall productivity and intellectual flexibility of the labor force. It helps to ensure that a country is competitive in world markets now characterized by changing technologies and production methods. By increasing a child’s integration with dissimilar social or ethnic groups early in life, education contributes significantly to nation building and interpersonal tolerance. Therefore the following below are the effect of education on economic development.

THE EFFECT OD EDUCATION ON ECEONOMIC DEVELOPMENT

Many countries are now on the brink of a further increase in access to secondary and higher education and in effecting spectacular improvements in the quality of education offered at all levels. As increasing numbers of students complete their basic education, their demand for education at higher levels is similarly increasing. Educating girls and women is probably the single most effective investment a developing country can make, whether or not women work outside the home. It creates a multitude of positive remunerations for families including better family health and nutrition, improved birth spacing, lower infant and child mortality, and enhanced educational attainment of children. Countries in the Middle East are increasingly integrated in world markets for manufactured goods. Their ability to compete in these markets and in globalizing service markets will depend on the excellence of human capital they bring to the competition.

It increase per  capita income in most countries, Moreover, controlling for human capital distribution and the use of appropriate functional form specifications consistent with the asset allocation model make a difference for the effects of average education on per capita income, while failure to do so leads to insignificant and even negative effects of average education. Investment in human capital can have little impact on growth unless people can use education in competitive and open markets. The larger and more competitive these markets are, the greater are the prospects for using education and skills.

Education boost agriculture developments, evidence suggests positive effects of education on productivity among farmers using modern technologies, but less impact, as might be expected, among those using traditional methods. In Thailand, farmers with four or more years of schooling were three times more likely to adopt fertilizer and other modern inputs than less educated farmers Similarly, in Nepal, the completion of at least seven years of schooling increased productivity in wheat by over a quarter, and in rice by 13% (Jamison and Moock, 1994).

Clearly the educational provisions within any given country represent one of the main determinants of the composition and growth of that country’s output and exports and constitute an important ingredient in a system’s capacity to borrow foreign technology effectively. For example: health and nutrition, and primary and secondary education all raise the productivity of workers, rural and urban; secondary education, including vocational, facilitates the acquisition of skills and managerial capacity; tertiary education supports the development of basic science, the appropriate selection of technology imports and the domestic adaptation and development of technologies; secondary and tertiary education also represent critical elements in the development of key institutions, of government, the law, and the financial system, among others, all essential for economic growth.

Education is also an important contributor to technological capability and technical change in industry. Statistical analysis of the clothing and engineering industries in Sri Lanka, to cite just one example, showed that the skill and education levels of workers and entrepreneurs were positively related to the rate of technical change of the firm (Deraniyagala, 1995).

Education may affect per capita income growth through its impact on the denominator, example population growth. For example, a study of fourteen African countries for the mid-eighties showed a negative correlation between female schooling and fertility in almost all countries, with primary education having a negative impact in about half the countries and no significant effects in the other half, while secondary education invariably reduced fertility (Birdsall 1995, The three success countries in terms of reduced fertility, Kenya, Botswana, and Zimbabwe, had the highest levels of female schooling as well as the lowest child mortality rates (Ainsworth, 1995).

Education of the poor helps improve their food intake not only by raising their incomes and spending on food but also by inducing them to make better, healthier, choices. All the studies from different nations I have seen indicate that educated persons tend to consume a healthier diet even when the total amount spent on food is held constant. Of course, the relation between education and better health and life expectancy involves causation in both directions, for greater health and lower mortality also induce larger investments in education and other human capital since rates of return on these investments are greater when the expected demount of working time is greater.

Increase of employment opportunities and focus on structuralizing of the economy are key tools how to increase the level and quality of education. Encouraging and expanding opportunity for career training are crucial too. Another issue is that education is not free for all Indians, for instance, education in the technical area is one of the most important and also one of the most expensive branches in India. Tools mentioned above need a government support in order to be successful for the economic growth. Without significant education reform India cannot expect positive changes to take place as significant social and economy structuralisation is needed Nowak Z. (2016).

It improve living standards and to reduce social and income inequality. Different Governments examples Pakistan have taken numerous steps to improve the quality of education. According to the Education Statistics of 2008-9 Shows that literacy rate was high in urban areas (74%) then the rural areas (48%). Literacy rate in men are more the women's, as for men (69%) compared to women (45%). Province wise literacy rate indicates, “Literacy rate in Punjab is (59 %), Sindh, (59%), Khyber Pakhtunkhwa (50%) and Balochistan at (45%)". Total adult literacy rate show the figure of 57%. Pre Primary Education is a vital element of Early Childhood Education. An increase of 2.2% enrolment rate is estimated for the year 2009-2010. 156, 653 Primary Schools with 465,334 Teaching staff are functioning in Pakistan. An increase of 0.6 % in Primary enrolment (18.468 million) in 2009 compare to (18.360 million) in 2008. Statistics indicates that, 24,322 Secondary Schools with 439,316 Teaching staff are functioning in Pakistan. Moreover, the enrolment rate of 2.9 % (2.556 million) is observed in 2009-2010.

RELATIONSHIP BETWEEN EDUCATION AND ECONOMIC DVELOPEMENT

Generally, it can be said that education does effect the economic development because it is considered as one major factor of improving human capital. Practically, there is difference among researchers as to whether the education have positive or negative relation with economic growth, or in some cases the studies indicates no impart of education expenditure on economic growth.  Barro (1991) finds a positive relationship between education expenditures and economic growth. De Meulmester and Rochet (1995) concludes that the relationship is not always positive between education and economic growth. Nowak Z. (2016). acknowledge the human capital development as a source of economic growth.

Nowak Z. (2016). determine that, both human capital and their growth rates as main determinants of economic growth. The point out that normally the instruments used to determine the relationship are not suitable.

According to( Bils and Klenow, 2000), “Countries having high rate of enrollment in schools made faster growth in per capita income because high enrollment rate causes rapid improvement in productivity”.( Hanushek and Kimko,2000) show that quality of education have a remarkable impact on productivity and national growth rates.

Education can play its role in economic growth and benefit the society and individual as well. For individual education increases employment opportunities and higher income and improved life quality.

Afzalet et al (2012) analyzes the relationship between education and economic growth and demonstrates that nations cannot be developed without investing in education perceived as a multidimensional process. It reduces poverty by increasing productivity and hence, the study proves strong linkages between poverty and education, and education and economic growth in turn.

Like many economists, (Adiqa, 2011) found the key role of higher education in an economy to grow, flourish and expand career opportunities. The study brings into light that first quantity and quality of education affect highly the labor force, governance and the working conditions of most the institutions. Thus, it is not denying that education is the major determinant for developing the climate for investment in human capital stock. The relationship between education and poverty is quite clear; educated people have higher earning potential and are better able to improve the quality of their lives, which means they are less likely to be marginalized within the society at large (UNESCO, 2002).

Adawo, M. A. (2011) examine the relation of higher education level with labor productivity index. They have found a high correlation between university enrollment ratio and labor productivity growth. In the case of science and technology education, the study has a finding that the more the scientists and engineers are produced by the universities, the more is the economic growth.

Bhatta S. D. (2005) emphasize on the financial returns generated through tax and paid by individuals. Their study has estimated positive impacts of research and innovation through higher education on economic activity, but emphasized more on financial returns and less on educational returns. But, no such research or study seems to have been undertaken to examine the situation in the poor or developing countries

Using time series data for Pakistan from1960 to 2003, Abbas &Peck (2007) have estimated the correlation between human capital and economic growth using OLS technique. They view that human capital has been accounted for about 40 percent increase in GDP with an increase of one percent human capital. Therefore, they have suggested that only low/no investment in education may be one of the reasons of low economic growth stemming from low investment in human capital. Thus, it has been concluded that the higher the level of education of the population the lesser will be the number of poor individuals because education impacts knowledge and skills which are supportive in higher wages.

Adawo, M. A. (2011)have found that the provision of primary education without giving right consideration to secondary and higher education constrains development through the absence of up-to-date curriculum, lack of skills in administrative posts and in management and he has notably shown a linear relationship between education and earnings. Education increases the probability of being employed as better-educated individuals earn considerably more than less-educated in employment.

Conclusion

Generally, Education is universally acknowledged a primary tool to promote economic development. It plays a fundamental part in developing human capital and escalates economic growth by improving skills, increasing competency, and productivity. The education brings benefits for the whole society and the individuals. For developing country like Pakistan, education plays a key role in poverty reduction, and removing both social and income inequalities. Education is indispensable to economic development. No economic development is possible without good education. A balanced education system promotes not only economic development, but productivity, and generates individual income per capita. Its influence is noticeable at the micro level of an individual family.

REFERENCES

Adawo, M. A. (2011) Has education (human capital) contributed to the economic growth of Nigeria? Journal of Economics and International Finance, 1(3), 46-58 .

Adiqa, K. (2011) Role of University Education in Poverty Alleviation in Pakistan. Interdisciplinary Journal of Research in Business, 1 (7), 30-38.

Afzal, M., Malik, M.E., Begum, I., Sarwar, K. and Fatima, H. (2012) Relationship among Education, Poverty and Economic Growth in Pakistan: An Econometric Analysis. Journal of Elementary Education, 22, 23-45

Bhatta S. D. (2005) Determinants of student performance in the SLC exams: evidence from surveydata. SLC Study Report #11. Kathmandu: Education Sector Advisory Team, DANIDA.

Bhatta, S. D. (2004) Disparities in school performance in the SLC exams: an exploratory analysis. Studies in Nepali History and Society 9(2): 293-343.

Deraniyagala, S. (1995), Technical Change and Efficiency in Sri Lanka`s Manufacturing Industry, D. Phil, Oxford.

Nowak Z. (2016). The contribution of education to economic growth: Evidence from Nepal. International Journal of Economic Sciences, Vol. V(2), pp. 22-41., 10.20472/ES.2016.5.2.002

Psacharopoulos, G. (1994), “Returns to Investment in Education: Aglobal Update”, World Development, 22(9).

UNESCO (2012). Shaping The Education Of Tomorrow; 2012 Full-Length Report On The UN Decade Of Education For Sustainable Development. Paris.