Ch.8

Why do you think Uganda has been so successful at decreasing the prevalence of HIV/AIDS?

An answer should make reference Box 8.8, especially noting the role of education, awareness, and an analysis of the economic forces behind the disease.

Why is eradicating child labor seen as an economic investment?

Answers should include reference to the estimated $5 trillion in economic gains and a high rate of return on the investment needed to eliminate child labor and provide more education up to age 14.

Compare the relative effectiveness of the balsakhi program to the Computer-Assisted Learning (CAL) program in India.

Both programs are effective in helping primary school students learn. The balsakhi program is relatively more cost effective than the CAL program, though both are fairly inexpensive ($5-$16 per child per year).

What are the critical health challenges facing developing countries today and what measure(s) are being taken to confront these challenges? Explain your answer.

Combating the burden of diseases (malaria and HIV/AIDS prominent among these) and breaking the vicious circle between lack of health and low productivity.

Why have poor nations invested so much money in education and health? Evaluate the soundness of these reasons.

Discussed in the chapter. Education and health improvements will increase labor productivity. Both are essential for sustained growth.

Explain how a better-educated population will also tend to be healthier, and vice versa, that a healthier population will tend to be better educated.

Education and health care complementary.

Explain why the education of girls is probably the most cost-effective development investment. Be sure to include in your answer some discussion of at least two of the following: absolute poverty, health and development, fertility, and agriculture.

Female education leads not just to better employment opportunities but also to a better distribution of benefits within a family. It leads to improved child health, reduced fertility, and it improves agricultural productivity as women do most of the work in this sector.

What is human capital and why is it crucial to expand human capital as part of the development process?

Human capital is defined as human capacities that raise productivity. In particular, human capital is focused on the level of education and health within the population. As more human capital is accumulated, labor productivity rises, which is essential for sustained growth in the economy.

Explain some of the reasons why developing countries have not realized a greater positive development impact from their higher education programs.

Lack of program focus on the needs of the country and lack of mechanisms to ensure college graduates have the incentives to apply their abilities to pressing development needs. See the chapter.

What is educational inequality and how is it measured? Why is it important to measure the degree of educational inequality in a country? Explain your answer.

Measures how the quantity of education is distributed amongst the population ages 15 and above. It can be measured by the Lorenz curve and the Gini coefficient, much like the distribution of income.

Why should the development of a solid elementary education system take precedence over an expansion of the university system in developing countries?

One reasonable answer would apply the law of diminishing returns. Another would stress that university trained graduates have limited benefit without complementary inputs of moderately trained personnel. Also the higher rate of return (both private and social) from investing in primary education.

Evaluate critically the following statement: The developed countries have all shown a significant increase in the numbers of university-trained workers as incomes have risen; thus the development of a solid university system should be among the major priorities of developing countries.

Students might be expected to distinguish between cause and effect. A better-educated labor force does not in itself cause development. It is necessary but not sufficient.

In developing countries higher educational facilities have tended to expand to the point where social benefits exceed private benefits. What is the economic explanation for this?

Supply and demand are not equated by a price adjusting market mechanism, but rather institutionally, through the state. Those with political influence seek to create subsidized education for their children.

Investment in human capital is very similar to investing in physical capital. True or false? Explain your answer.

They are similar in the sense that rates of return can be calculated for each form of capital so one can compare these and make a choice as to which type of investment to undertake. Rates of return to education are provided in Table 8.1. Of course, there is a market for physical capital where it can be bought/sold but no market for human capital.

Although Progresa/Oportunidades has been successful in Mexico, why might a similar program not work elsewhere?

This problem is designed to get students to think about how development solutions in one country cannot necessarily be duplicated and be successful in another country. Answers should discuss the financial cost of implementing a similar program as well as the other necessary actions that would have to go hand in hand with such a program, such as the building of infrastructure and national level investments in health care among other things.

How can an increase in human capital lead to an increase in GDP? Why might it not lead to an increase in GDP?

will vary. Labor is more productive as human capital increases. Population growth can be expected to eventually fall as human capital increases. It might not lead to an increase in GDP if there is not sufficient job growth, or increased education is not directed at productive activities.