Education

Question 1

Education, An empty shell?

Answer 1

• In many developing countries, schools are accessible
  to the majority of the population and most students
  are enrolled (at least in primary school).
• Yet, child absentee rates are very high
• Learning outcomes are very poor

Question 2

Describe The naïve demand-
supply war

Answer 2

• The supply-side explanation concentrates on lack of
  infrastructure and weak education systems
• The classic solution is to build more schools and
  lower the price of schooling for parents.
• This was the goal of MDG2: “Achieve universal primary
  education”.
• Many countries made tremendous progress towards
  this goal.

The basic demand-side diagnosis
* The demand-side explanation is that building schools
and enrolling more students is not enough if there is
no demand for good-quality education
* If parents (and children) do not see the benefits of going
to school and learning something, students’ outcomes
will not improve (no matter the amount of schools the
government builds).
* The problem, in this case, may be the labour market
or, more generally, the capacity of the economy to
generate jobs.
* Plenty of evidence that when labour demand increases,
education outcomes improve too.

Question 3

Outline the Indonesian experiment by Esther Duflo (2001)

Answer 3

• Between 1973 and 1978, the Indonesian government engaged in
  one of the largest school construction programs on record.
• Using revenues from an oil boom, almost 62,000 schools were
  built.
• In a very famous study, Esther Duflo (2001) combined differences
  across regions in the number of schools constructed with
  differences across cohorts induced by the timing of the program,
  to identify the causal impact of the school-construction
  programme on school outcomes.

Key idea: Estimate the difference between the average education of a young
cohort exposed to the program and that of an older cohort not exposed to the program.

Results, se figure 16

Duflo was able to show that a supply-side push
positively impacted school enrolment and earnings
in Indonesia.
* This lends support to the supply-side argument.
* However, despite increased enrolment rates, the
quality of the education many children receive remains
very poor in the developing world and learning
outcomes abysmal.

Question 4

What are some evident flaws with the basic demand-
side argument

Answer 4

Parents may not always make decisions in their
children’s best interest
* In the demand-side view of the world, education is a
form of investment that parents have to make on
behalf of children
* Returns are very delayed into the future and risky
* Parents (like everyone else) discount future outcomes
and have time-inconsistency problems.

• From the point of view of a selfish parent, the risks
  are magnified by the fact that children may refuse to
  take care of them later in life.
• If this is the case, some parents may decide not to
  invest in education and instead make their children
  work.
• This is a justification for banning child labour and
  making school compulsory, but in many developing
  countries such regulations are not well enforced.