Ch 8: Human Capital: Education and Health in Economic Development

Educational gender gap

Male-Female differences in school access and completion. - The Educational gender gap is especially great in the least developed countries in Africa, where female literacy rates can be less than half that of men in countries such as Niger, Mali, and Benin.

ROR on secondary education:

- Least high ROR out of the three types of schooling - 24.6%

ROR on higher education:

- Second highest ROR out of the three - 27.8

Which region of the world has the largest number of adults and children living with HIV?

- Sub-Saharan Africa

Rate of return on primary education in developing countries:

- We see the highest ROR on primary education in developing countries - Sub-Saharan Africa sees the highest ROR of 37.6 (out of all the countries) in primary education. This is reflected by the income differential between those with more and less schooling is greater on average than developed countries

Human capital

Productive investments embodied in human persons, including skills, abilities, ideals, health, and locations, often resulting from expenditures on education, on-the-job training programs, and medical care. - Basically human capital can be defined by the issues of education and health

Social ROR (costs) on education (benefits of education)

Social costs of education: In developing countries, the opportunity cost to society as a whole resulting from the need to finance costly educational expansion at higher levels when there limited funds might be more productively used in other sectors of the economy. - This opportunity cost increases rapidly as students climb the educational ladder

Which region of the worlds did not experience decrease in the child mortality (under age 5)?

South Asia

Private ROR (costs) on education (benefits of education)

The private costs of education (those borne by students themselves) increase more slowly and may even decline Ex: Private benefits of education are those that directly accrue to a student and his or her family.

ROR on education of males vs. females

The rate of return on women's education is higher than that on men's in most developing countries. [ This may partly reflect that, with fewer girls enrolled, the next (marginal) girl to enroll is likely to be more talented on average than the marginal boy]

Rate of return

The rate of return will be higher whenever the discount rate is lower, the direct and indirect costs are lower, or the benefits are higher.