National Human Development Report: 2001 - Indira Gandhi Institute ...

NATIONAL HUMAN DEVELOPMENT REPORT 2001 EDUCATIONAL ATTAINMENTS AND WELL-BEING 49There is ample evidence to substantiate this claim. Improvements ineducational attainments have invariably been accompanied by improvementin health and longevity of the population and in their economic well-being.Educated people are likely to be more productive and hence better off. Theyare also likely to contribute more to a country’s economic growth. At thesame time, education reinforces the socio-economic dynamics of a societytowards equality in attainments and opportunities for its people. Though, thereturns to education may vary across individuals, regions, level and nature ofeducation, in general, they are significantly higher for poor developing areasthan for the rich. Education is therefore, the best social investment, giventhe synergies and the positiveexternalities that it generates forpeople in their well-being. It is also apriority for countries seeking todevelop and sustain their level andpace of development.The UNDP in its HDR 1990,pointed out, and rightly so, thatliteracy is a person’s first step inlearning and knowledge buildingand, therefore, literacy indicatorswere essential for any measurementof human development. There canbe many indicators such as literacyrate for population as a whole or apart of the population, including,those for adults, females, thedeprived and the backward. Otherindicators like enrolment,attendance and dropout rates of theschool going children or the girlchild; or the proportion ofpopulation having higher andtechnical qualification, etc. couldalso be used to capture the level ofeducational attainment in a society.Each of these indicators, however,focuses on a particular aspect of theeducation and, to that extent,captures only a limited dimension ofeducational attainment. Forinstance, adult literacy rate (that hasfrequently been used as an indicatorto reflect educational developmentin human development indices) maymeasure only a superficial capacityto read and write one’s name or asimple sentence and, hence, may notbe a good indicator in itself forcapturing educational attainment ofa society, particularly when it is aresult of mass adult literacyProductivity Benefits from Education —Some Cross Country EvidenceIn agriculture, for example, studies covering 31 countries concluded that if afarmer had completed four years of elementary education, his/her productivity wason an average, 8.5 per cent higher than that of a farmer who had no education atall. In case of India there is evidence that adoption and spread of ‘greenrevolution’, in the early years, was faster among the educated farmers. In industry,most evidence suggests that at enterprise level educated workers are moreproductive. More strikingly, the skill and knowledge intensive sectors have beenthe fastest growing service sector in India in recent years. A study for 88 countriesfor the period 1960-63 and 1970-73 found that an increase in literacy from 20 percent to 30 per cent were associated with an increase in real GDP of between 8 and16 per cent. Another study of 37 middle-income and 29 low-income countriesindicated that a 1 per cent difference in the primary enrolment ratios wasassociated with 0.035 per cent difference in per capita income growth rates.Education increases equality as well. A study of 49 countries showed thatabout a fifth of income-inequality could be explained by educational inequality.Another has shown that an increase in literacy rate from 10 to 60 per cent hasbeen associated with a 2.8 per cent increase in the income share for the poorest40 per cent of the population. At lower levels of development, in some cases,expanding education could possibly increase inequality, but with development,education does seem to generally have an income levelling effect.The poor countries get much higher rates of return than the rich countriesfrom investing in education. For the poorest countries, the highest returns arefrom primary education. For instance, in case of African countries the estimatedrate of return on primary education was 26 per cent in comparison to 17 per centfor secondary education and 13 per cent for higher education.In case of India, as per one study, the private rate of return per year ofeducation increases as the level of education increases up to the secondary level.The returns to primary education were rather low and, in general, returns per yearat secondary level were the highest. It was also seen that returns to women’seducation exceeded that of men at middle, secondary and higher secondary levels.Though, between 1983 and 1994, the returns to women’s education for primaryand middle levels declined, there has been an increase in returns for secondary andcollege levels during the same period. For rural areas, there were higher returns forprimary and secondary levels as well as for technical diploma, whereas returns forhigher secondary and college education were higher in urban areas.Source Adapted from UNDP, Human Development Report, 1992, page 69;P Duraisamy (2000), Yale University: Centre Discussion Paper No. 815.