Positive Returns on Investment
Education has positive returns. That claim is certainly not the most extravagant generalization about education that one can make. It is true unless of course hundreds of millions of people over centuries have been systematically paying for education and not fully recovering their investment.
Continue reading “Education Matters — Part 1”
I am a big fan of using technology in education. Information and communications technology (ICT) is tailor-made for application in education. What I don’t understand is why some people are going on about the use of “wireless, low-orbiting satellite, fiber-optic” communications in the context of education. Those hi-tech channels are clearly required when the information is dynamic and real-time, such as in the case of market information and sports events. But what does one gain by beaming down static information — say, history or physics content — as opposed to delivering it as a book (if the information is purely text and pictures), as a DVD if it is audio-video-text, or as content on a hard drive (if the content is rich as well as interactive)?
Continue reading “Hi-tech Puzzle”
From the article How the Open Source Movement Has Changed Education: 10 Success Stories: “MIT provides just one of the 10 open source educational success stories detailed below. Open source and open access resources have changed how colleges, organizations, instructors, and prospective students use software, operating systems and online documents for educational purposes. And, in most cases, each success story also has served as a springboard to create more open source projects.”
The information exists out there. The challenge is to make it accessible — both physically and mentally. Physical accessibility is a technical problem and therefore requires a bit of hardware and software. It is only a matter of time before technology will be cheap enough that it would not matter whether you are rich or poor — you will have all the information accessible. Mental accessibility is a different matter. Those who don’t have the basic pre-requisite to make sense of the information will be at a disadvantage relative to those who have the skills to use the information. The challenge for India is to provide basic education — reading, writing, arithmetic and reasoning.
[Previous post: Part 9.]
The liberalization of the education sector in India, that is, allowing free entry – especially for-profit firms – will result in increased supply of educational services. Here I will explore the predictable consequences of this. We begin by recognizing that education is not an undifferentiated homogeneous good; there are distinct levels within it, from basic primary education to post-secondary and tertiary levels. Each level has different pay-back periods for the “return on investment.” Furthermore, different people have different abilities to pay for the various levels of education.
Continue reading “The Indian Education System — Part 10”
Freedom
By liberalizing the education sector I mean that it has to be made totally free of government control and involvement. Whoever wants to provide educational services must be free to do so, be it domestic or international, for profit or not for profit, at the primary, secondary, or tertiary level. What would be the expected benefits of doing so?
The supply of educational services will increase, the quality will improve, and prices will come down. These are all everyday first-order efficiency effects of letting markets work. The second-order effects will be increased productivity, increased production, and better allocative efficiency within the sector. The third-order effects will arise from the increasing returns to scale associated with the production of education. Finally, there are very important forward and backward linkages that bind the sector with the overall economy. One of them is the use of information and communications technology (ICT) tools. It will give a boost to the IT sector in a way that is unthinkable in any other endeavor.
Continue reading “The Indian Education System — Part 9”
Scarcity
Consider this list: cars, scooters, telephone service, airline ticket, seats in schools and colleges, electricity, and railway tickets. Think of the year 1980. Notice the common feature of the list: shortages. Now consider the list in the year 2007. Notice some things on the list are no longer scarce. It cannot be mere coincidence that only those items which the government has released it stranglehold on are no longer scarce. Could it be possible that if the government lets go of its vise-like grip of schools and colleges, that shortage of educational services will also be a thing of the past?
Continue reading “The Indian Education System – Part 8”
Markets Work
Imagine for a bit what it would be like if education were provided by private sector firms. Can it be done? Would a socially optimal amount, variety, and quality of education be provided? Would there be market failures? If so, how can those market failures be corrected? Can one devise mechanisms to correct those failures?
The answer to whether the private sector can provide education is clearly ‘yes’ because around the world for a very long time private firms have provided education very successfully. Both private sector for-profit and not-for-profit business models exist. Education, at some level of description, is a service like any of a very large variety of goods and services provided very efficiently by the market. The generalization that markets work holds quite meaningfully in the specific case of education broadly.
Continue reading “The Indian Education System — Part 7”
Incentive Matters
Alistair Cooke in his weekly radio broadcast on BBC Radio 4, A Letter from America, once explained the theory of public choice to his listeners as “the homely but important truth that the politicians are after all just the same as the rest of us.” It is an accessible, though incomplete, definition of what public choice is about. You could read James Buchanan, who in 1986 won the “The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel” (popularly known as the Nobel Prize in Economics) “for his development of the contractual and constitutional bases for the theory of economic and political decision-making.” But Cook’s version is adequate for our needs to explain why the Indian educational system is a disaster.
Continue reading “The Indian Education System – 6”
One underhanded way to scare a neoclassical economist out of his wits is to creep up on him and shout “monopoly power.” Economists regard monopolies with the same mixture of dread, contempt and fascination as biologists regard cancer. They recognize the awesome virulent power of monopolies to wreak havoc on their world of mutually beneficial voluntary exchanges. Monopolies, whether public or private, lead to social welfare losses. At the other extreme, perfect competition leads to maximization of social welfare, subject to some reasonable conditions often approximated in the real world.
Continue reading “The Indian Education System — Part 5”
The absence of universal basic literacy and education is a constraint on present economic performance and future growth. Doubtless, education is costly but the opportunity cost of not having an education is even higher. The old adage about a stitch in time saving nine holds with special force in the case of basic literacy. Here’s the argument. At most one generation requires help in becoming literate; the children of literate parents are overwhelmingly literate; and the children of illiterate parents are more likely to be illiterate compared to those of literate parents.
Continue reading “The Indian Education System — Part 4”
Atanu Dey : Life is a Random Draw 