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Human resource development and economic growth in lesser developed countries

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Human resource development and economic growth in lesser developed countries
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Stafford, Kim J
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Denver, CO
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University of Colorado Denver
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English
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vi, 87 leaves : ; 29 cm

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Education -- Developing countries ( lcsh )
Economic history ( fast )
Education ( fast )
Social conditions ( fast )
Economic conditions -- Developing countries ( lcsh )
Social conditions -- Developing countries ( lcsh )
Developing countries ( fast )
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bibliography ( marcgt )
theses ( marcgt )
non-fiction ( marcgt )

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Bibliography:
Includes bibliographical references.
Thesis:
Submitted in partial fulfillment of the requirements for the degree, Master of Arts, Department of Economics
Statement of Responsibility:
by Kim J. Stafford.

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ocm26186679
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Full Text
HUMAN RESOURCE DEVELOPMENT AND ECONOMIC GROWTH
IN LESSER DEVELOPED COUNTRIES
by
Kim J. Stafford
B. A., University of Colorado at Denver, 1982
A thesis submitted to the
Faculty of the Graduate School of the
University of Colorado at Denver in partial fulfillment
\
of the requirements for the degree of
Master of Arts
Department of Economics
1991


This thesis for the Master of Arts degree by
Kim J. Stafford
has been approved for the
Department of
Economics
by
/% /#?/
Date 7


Stafford, Kim J. (M.A., Economics)
Human Resource Development and Economic Growth in
Lesser Developed Countries
Thesis directed by Professor David F. Bramhall
Human resource development, or applied human capital
theory, began in earnest thirty years ago. The three
major areas of human development are health and
nutrition, education, and nonformal education.
Human capital theory suggests that investments in
persons, by means of improving their health, knowledge
and skills, will benefit not only the individual in terms
of higher wages, but society as well in terms of
increased output and economic growth. The theory's
merits and deficiencies have been extensively debated,
but application in Lesser Developed Countries has
proceeded with fairly high expectations.
Efforts at improving health have led to significant
decreases in death rates and increases in life
expectancy. While all measures of mortality declined no
adjustments were made in fertility which resulted in high
population growth and further strain on resources.
Efforts in education initially took the form of formal
schooling to correct the great deficiencies in literacy
and numeracy. Many improvements have been seen in Some


statistics, but the early promise of education has faded
as it has not been able to bring about the anticipated
economic growth. In addition it has not been able to
correct inequality and has produced some externalities
such as the educated unemployed.
Nonformal education was seen as a solution to many of
the problems associated with formal education. Nonformal
education, while still being specific in terms of what is
learned, focuses more on skill acquisition and uses a
"hands on" methodology. Much use has been made of
nonformal education in rural areas in the way of
agricultural projects.
Nonformal education has been relatively successful, but
has its own problems in that it may tend to stratify
society through its focus on the rural areas.
All three of these areas affect each other though the
exact nature of the relationships are undetermined.
The conclusion is that human resource development, in
spite of problems which have occurred, has led to
economic growth though not as much as was originally
anticipated.
The form and content of the abstract are approved. I
recommend its publication.
S igned_________________________
Suzanne W. Helburn
iv


71
CHAPTER VI ..... ...............................
INTERRELATIONSHIPS OF HEALTH, EDUCATION, AND
NONFORMAL EDUCATION .................. 71
Introduction ..... ............................. 71
Education and Health ........................... 71
Education and Fertility ........................ 72
Education and Employment ........... ..... 74
Health and Employment .......................... 75
Conclusion ..................................... 76
CHAPTER VII..............................................77
SUMMATION AND CONCLUSIONS.............................77
BIBLIOGRAPHY
84


CHAPTER I
INTRODUCTION
Purpose of Thesis
It is the intention of this paper to examine the
strategy of human resource development and/or human
capital theory so as to determine the extent to which, if
any, the application of these theories has contributed to
the social and economic development of lesser developed
countries (LDC' s) .
The above terms, "human resource" and "human capital"
may themselves be debated as to their differences, if
any, in meaning and the implications that these perceived
differences in meaning may have on any analysis or
application of theory. Though it is certainly an
interesting and worthy debate, a discussion of the
implications is beyond the scope of this paper because in
the vast majority of sources examined, little distinction
between the terms was made and they were used fairly
interchangeably.
It should be pointed out however, that the use of the
term "human capital" would most often imply a
neoclassical context while "human resource" may come from
a variety of orientations.


Organization of Thesis
As the purpose of this paper is to examine human
resource development and, in turn, its relationship to
the development of LDC's, the first subject to cover is
human capital theory itself. This will be accomplished
through a brief highlighting of its history from the time
of its introduction a little over twenty-five years ago
to its present form and application.
After having briefly covered the above topic the focus
will shift to an examination of how development of human
resources has fared as it has been applied by governments
and development agencies alike over the past three
decades. This examination will center around three basic
means of human development which are most emphasized in
LDC's: health and nutrition, education, and the current
emphasis, training and/or nonformal education. This
examination will include both history and analysis of
these approaches to human development as well as
appropriate critiques of their application and/or effect.
These three means of investment in human development
are not isolated since each has an effect on the other.
After examining these methods individually, they will be
brought together and their interrelationships explored
and analyzed.
2


The final chapter will be a summary of the main points
of this thesis as well as an overall assessment and
evaluation of human resource development as. a methodology
for achieving economic and social development in LDC's.
Scope of Thesis
The scope of this thesis will be limited to examining
non-socialist countries, both as donor and receiver,
though some general statistics may include both. The
reason for this exclusion is a matter of focus and scope
and not one of ignoring a very real and significant
consideration in the area of human resource development.
Socialist countries have an interest in developing
persons also, for reasons similar to non-socialist
countries as well as for reasons which are distinctive
unto themselves. The comparison and contrast of human
resource development in socialist versus non-socialist
countries, being both interesting and relevant, suggests
itself as a separate and distinct topic for further
research.
3


CHAPTER II
HUMAN CAPITAL THEORY
Development of Human Capital Theory
T. W. Schultz is generally associated with the
introduction of human capital theory at the beginning of
the 1960's, though the concept was not entirely new as it
had been dealt with by men such as Adam Smith and H. von
Thunen centuries before. It would be more correct to
credit Schultz with being instrumental in rekindling
interest and research in the subject than it would be to
credit him with originating the concept.
In December of 1960 he gave the presidential address at
the American Economic Association's annual convention in
St. Louis entitled "Investment in Human Capital" which
was printed in the March 1961 issue of the American
Economic Review. This seems to be the standard work from
which one can gain an acquaintance with Schultz and his
ideas and also the basic tenants of human capital theory.
This foundational work was preceded in 1959 by an
article in the December 1960 edition of The Journal of
Political Economy entitled "Capital Formation by
Education." An even earlier article dealing with the
subject was "Investment in Man: An Economist's View,"


from the June 1959 issue of Social Science Review.
Though he may have been the most prolific of authors on
the subject at the time he was not alone in his interest
in and study of the subject. At the time that his works
were appearing on the subject, several other studies and
essays by social scientists, particularly economists who
were interested in the contribution of education to
economic growth, were published as well.
Men such as Gary Becker, E. F. Denison, and Frederick
Harbison contributed substantially to the body of theory
being developed and their contributions will be examined
in more detail later in this chapter.
In addition to these men, who examined directly and in
detail the subject of human resource development, other
noted economists such as Everett Hagen and John K.
Galbraith investigated the subject to a certain degree in
some of their writings related to development. Essays
written on the subject, particularly those concerned with
Third World development, dealt with such issues as the
under utilization or non-development of the human
resources of a country. Other related subjects were also
covered such as overpopulation, social stratification and
other societal factors which affect the development of
human resources.
5


Besides these contemporaries of Schultz, noted
economists of the past such as Say, Senior, and Walras
have also contributed to the formation of current
thought. B. F. Kiker (1971), in an article entitled
Historical Roots of the Concept of Human Capital,"
presents these men and some of their thoughts which
demonstrate their understanding of the value and
potential of human capital. Sir William Petty, for
example, concerned himself with establishing a monetary
value for human life from which he then computed the
money value of lives lost in wars or the monetary loss
occurring to a country as a result of deaths. Nassau
Senior, in many of his writings related to labor, dealt
for the most part with skills and acquired abilities .
rather than the worker himself.
To examine in more detail the early history of this
study we need to again focus on Schultz and his works, as
it was he who seemingly formalized or brought to the fore
the theoretical analysis of human resource development.
Though there had been, as mentioned previously, a lot of
research and writing on the subject, there was no real
framework within which to analyze, formulate, and
evaluate theory and application.
6


Before establishing the framework for human capital
theory, however, Schultz (1961) first addressed the
aversion that many social scientists felt in dealing with
persons as capital. It seemed to many that this theory
would reduce humans to something akin to property, no
different than physical capital, or much like slaves.
Alfred Marshall (Schultz 1961) had acknowledged that
humans could be treated as capital in an abstract or
mathematical manner, but objected to such treatment in a
practical sense since he could not consider humans as
marketable. It was the prestige of Marshall, Schultz
felt, that to some extent accounted for the prevalence of
this aversion. Diffusing this distaste of the idea of
humans as capital was critical to Schultz1s thesis
because this aversion, rather than a lack of the concept
being understood, was the reason the theory was not being
developed.
Schultz himself disliked the idea of treating persons
as mere material and so attempted to demonstrate that it
was not necessary to reduce the theory to that level. In
support of his view, Schultz (1961) referenced a work by
Von Thunen which pointed out that it was, in fact, a
concept which placed great value on human life.
7


Writing in the late nineteenth century Von Thunen
argued that the result of not considering humans as
having value was the sacrifice of hundreds of men to save
a piece of artillery in times of war. Von Thunen was
arguing against the prevailing view of the times that men
were to be had for virtually nothing, the only cost being
conscription, while cannons had a monetary value attached
to them.
In addition, Schultz also pointed out that economists
did not lump all machinery together without regard as to
its state of repair or technological sophistication, but
rather these factors were taken into account. He then
argued that it made little sense not to take into
consideration the obvious differences in skill and
ability between workers.
Application of Human Capital Theory
Schultz's (1971) premise was that investment in humans
paid returns to individual workers in the form of higher
wages, and to employers and the economy as a whole in the
form of increased productivity and output. He
substantiated his premise using a rate of return to
investment approach by pointing out the differential in
wages between those who had training and/or education and
8


those who did not. The establishment of this theory was
followed by ideas for specific application such as how
much investment should occur, where and how it should
occur, etc.; some of the details of which will be
examined later as they are relevant to contemporary
application of the theory.
Other economists were presenting similar analyses
demonstrating, in slightly different ways, the validity
of the concept and the various means by which these
concepts could be substantiated. One such economist was
E. F. Denison (1962) who used a growth accounting method
to present evidence that the increase in output in the
United States between 1910 and 1960 could not simply be
explained by increases in the amount of labor and
physical capital (Psacharopoulos and Woodhall 1985).
Growth accounting can be explained by using a simple
aggregate production function, Y = f (K, L). Denison
found that output (Y) had increased by a greater amount
than the increases in the two components, physical
capital (K) and labor (L), could account for. Denison
postulated that this large residual of unaccounted for
growth was partially attributable to a better educated
work force. Other researchers took up the task of
examining Denison's findings in an attempt to discover
9


just how much of this residual was due to an improved
labor force and how much could be explained by other
factors such as economies of scale or improvements in the
quality of physical capital.
Denison (1962) himself calculated that twenty-three
(23) percent of the growth in output between 1929 and
1957 was attributable to an increase in the quality of
labor due to education. Later he found, through the
application of this method, that only fifteen (15)
percent of growth in the United Sates since 1950 was a
result of increased education (Psacharopoulos and
Woodhall 1985). Comparing the rate of return to human
capital measured against the rate of return of physical
capital, Schultz came up with similar numbers
(Psacharopoulos and Woodhall).
These methods of analysis were then used to calculate
growth attributable to education in developing countries
with a wide divergence in results. For instance, where
education contributed 6.5 percent to the annual growth
rate in Honduras, it contributed only 0.8 percent to that
of Mexico (Psacharopoulos and Woodhall 1985). The
analysis became, or attempted to become, more exact in
terms of the quantitative measurement of returns to
investment with the work of Gary Becker (1971). In an
10


II
article entitled "Optimal Investment in Human Capital,
Becker presents the model Et = Xt + Kt Ct. This
equation, according to Becker, shows the net earnings at
any age, (Et), is approximately equal to the earnings one
would have, given no human capital investment, (Xt), plus
the total returns to him/her at time (t) on investments
made earlier, (Kt), less the cost of those investments at
time Ct. To Becker Xt simply represented someone who was
alive and breathing, in whom no investment had occurred,
and it was assumed that the value of Ct was small and
could even be ignored. Kt represented all investment
made in an individual in areas such as health, education
and even basic child rearing. The theory went on to
include demand and supply curves and a discussion of
varying rates in return given various investment
scenarios.
What this review of Becker's (1971) analysis intends to
show is how involved and complex the theory had become in
a few short years. It was no longer a simple theory of
how developed persons contribute to productivity and
output. It had now been furbished with all the
neoclassical essentials such as would make it
quantifiable and manipulable. The reduction of persons
to equations and formulas was a part of the maturation
11


process of theory necessary for manipulation by
neoclassical economists and other social scientists.
Issues in Human Capital Theory
Though the basis for this theory of human capital, the
idea that increased investment in persons will increase
output and produce returns to the individual, seems
almost intuitive and highly logical, it has been justly
criticized for some of the theoretical assumptions upon
which it rests. The main point of contention is the
assumption that earnings are a measure of return on
investment, the greater the investment the greater the
return or earnings. Though earnings are doubtless a
measure of productivity to some extent, there is ample
evidence that several other factors play a significant
role in determining earnings as well. Social class,
race, certification, etc., have an impact on earnings
with possibly the best example of this being the
disparity in wages between men and women in the same
occupation.
Becker (1975) seems to acknowledge this fact in Human
Capital in which he states that the reason white urban
males acquire more education than others is because they
have a higher rate of return available to them. In other
12


words, similar investments may pay disproportionate
returns to different individuals based on a set of
variables other than increased productivity or output.
Additional problems arise if the assumption is made
that individuals will make investment decisions based on
maximizing income alone. It is nearly impossible to
assign specific values to all investment choices or
opportunities though obviously this quantification is
desired so that rates of return can be compared.
However, just as earnings do not necessarily reflect
productivity, neither do they necessarily reflect value
to the individual or to society.
A good example of just how poor earnings and
productivity are as a measure of value can be shown by
considering the example of a physician who, choosing to
serve in a rural community, can expect to earn
substantially less than his urban counterpart. Simply
looking at earnings the urban doctor appears to show a
higher rate of return to investment and he may possibly
be more productive as well since he might work in a large
hospital. However, society no doubt receives a greater,
or certainly equivalent, return from the services of the
rural physician since he is providing a scarce resource.
13


Using the same sort of analysis we can see how
potential future earnings do not always determine
investment strategy nor do similar investments return
like benefits. If we did we could conclude that the
physician who chose to work in the rural area made a poor
< choice based on the earnings differential between himself
and his urban counterpart. However, an individual may
place greater emphasis on non-monetary returns and make
investment decisions based on other considerations. The
rural physician may highly value living in the country
for all sorts of non-monetary reasons which are not
considered because they are not easily quantified.
To reduce all persons to mere income maximizers is
quite an over simplification and assumes much. One
simply cannot be as sure about what determines investment
in persons as compared to decisions regarding investment
in machinery. Only the efficient, cost effective
characteristics of a machine are considered with little
or no value given to any of its other qualities, such as
aesthetics, tinless they will in some way increase
productivity.
The issue here is not to establish some exact equation
which will account for how variables such as investment
and social factors contribute to the makeup of a person's
14


earnings. Attempting to quantify the various non-income
variables which determine an individual's particular
investment strategy is likewise not essential. Though
many neoclassical economists may be brave or brazen
enough to attempt to quantify the above variables, it
would seem to be entirely too speculative and is not, in
fact, necessary for the evaluation of how human resource
development has contributed to the development of LDC's.
The above criticisms of human capital theory, though
valid, should not be enough to make us give up on the
concept altogether. The criticism has been directed at
the evidence offered in support of the theory, earnings
as a measure of productivity for instance, not the theory
itself as the logic of it remains. Efforts at
quantifying the relationship between human development
and growth continue with the present method being
econometric techniques.
In a study done for the World Bank, Norman Hicks
(Psacharopoulos and Woodhall 1985) found that of the
eighty-three developing countries examined, the twelve
fastest growing countries in the study also had well
above average levels of life expectancy and literacy. A
number of other studies help substantiate the theory as
well as they show a direct correlation between the level
15


of schooling, the levels of economic growth, income, GNP,
etc. However, since correlation does not prove
causation, the exact nature of this relationship is
undetermined.
Which factor must precede the other and how do they
effect each other? This chicken and egg type question is
a significant one and the way in which it is resolved has
a lot of bearing on the overall assessment of human
resource theory and so will be considered in detail in a
later chapter dealing with the interrelationships of
these various factors.
Summary and Conclusion
To summarize this issue it seems two basic statements
can be made. 1) It is intuitively logical that the
development of persons should lead to greater output as
the quality of labor is improved. 2) The evidence
offered to support this relationship is based on highly
theoretical assumptions as to appropriate measures of
productivity, and on correlations which, though
significant, are unable to prove causation.
The above treatment of human capital theory, while not
exhaustive, has provided a sufficient basis for
continuing the analysis of its contribution to economic
growth and development.
16


CHAPTER III
HEALTH AND NUTRITION
Introduction
While most of the focus of human capital theory, in its
initial development, was on industrialized countries and
the contribution of education to growth, a major emphasis
in developing countries was in the area of health and
nutrition. Adequate health and nutrition were, and in
many cases still are, the highest priority as basic
health must be in place before other efforts such as
education can be effective. Though improvement in basic
health was an obvious place to begin developing human
potential, it had already begun for humanitarian reasons
long before economists showed the value of investment in
persons for economic benefit.
To get an idea of the magnitude of the health problems
present in most LDC's today, this chapter will begin with
a look at, and analysis of, some of the relevant
statistics.


Overview of Health Related Statistics
There are a wide variety of statistics available for
countries in various stages of development, but in
general all show the incredible lack of basic health
care, especially relative to developed countries. The
following statistics are from a UNICEF publication
entitled The State of the World's Children 1988 in which
countries are ranked according to the severity of their
child mortality rate (CMR). CMR is a measure of the
number of children who die before the age of five for
every one thousand born alive. For the thirty-three
countries with the worst rates the average CMR is 211 and
for the next worst group of thirty-one countries the
average CMR is 125. This compares to an average CMR of
just thirteen for the thirty-five countries with the
lowest child mortality rate.
For the thirty-three worst countries the infant
mortality rate (IMR), which is the number of deaths of
infants under one year of age per one thousand live
births, averages 130. The second worst group of thirty-
one countries has an average IMR of 85. By comparison,
the average IMR for the thirty-five countries with the
lowest CMR is just ten.
18


Another measure of the poor state of health is life
expectancy at birth which, for the thirty-three countries
with an extremely high CMR, averages forty-seven years.
By comparison, the average life expectancy for countries
with low CMR is seventy-four. To put this in
perspective, the life expectancy in countries such as the
United States is seventy-four or a third again as long as
the average for most Africans.
One of the possible contributing factors to these
disparaging statistics is the ratio of physicians to
population. The following statistics are from Social
Indicators of Development 1987 published by the World
Bank. The ratio ranges from one doctor per 30,100
persons in Nepal, to one in 1,500 in Peru. By way of
comparison, there are 580 persons per physician in
France. Nurses are also in short supply as there are
5,700 persons per nurse in Niger and 1,400 persons per
nurse in the Dominican Republic. In the Netherlands
there is one nurse for every 130 persons.
There are many more statistics that could be presented
to further demonstrate the extremely poor state of health
which exists in LDC's, but enough have been presented to
show the severity of the problem.
19


Improvements in Health
These statistics, while dismal, do not show the great
amount of improvement that has taken place in just the
last quarter of the century. Between 1960 and 1986 for
instance, an average of ten years was added to life
expectancy in low income developing countries and, in
middle income counties, thirteen years were added (UNICEF
1988).
As health care was introduced or upgraded and as
nutritional intake improved, mortality decreased
substantially in all categories. In 1960 the crude death
rate for the least developed countries was twenty-eight;
by 1988 that rate had dropped to nineteen (UNICEF 1988).
Obviously with the reduction in mortality rates and
with the increasing numbers of infants and children
surviving to adulthood, life expectancy increased as was
shown above. Much of this was accomplished simply
through educating persons in appropriate sanitation
methods such as boiling water for drinking and digging
latrines to avoid diseases spread by flies. Also having
great effect were the vaccinations that were given and
other measures, such as spraying for mosquitoes, that
went a long way in reducing the spread and extent of
malaria.
20


Due to the recent nature of these dramatic improvements
in health it would seem a fairly easy task to assess the
impact that this upgrading of the human condition has had
on the development of LDC's. In addition, at first
glance, one would expect to find that improved health has
contributed positively to national development. However,
there is a real lack of consensus among social scientists
as to whether improved health has had a positive or
negative impact on national development and the degree to
which it has affected it in either manner.
Relationship Between Improvements in Health
and Increases in Population
Looking first at the negative assessment, a strong case
can be made to show how improved nutrition and health,
reflected in longer life spans and lower mortality rates,
has had a detrimental effect on development. These
negative effects are due to the strain on resources that
have occurred due to the dramatic increases in
population. As more and more children survived their
early years due to proper medical care, vaccinations, and
hygiene, the net result was a significantly higher
population since there were no corresponding reductions
in fertility.
21


Fertility has long been high in developing countries
for many reasons which, for the sake of simplification,
can be examined as belonging in general to one of two
basic categories. The most obvious cause for continued
high fertility is the lack of utilization of birth
control methods. One explanation for this non-
utilization of birth control is the lack of knowledge
about family planning and contraceptive use. There are
many difficulties in educating persons as to the benefits
of family planning and successful conveyance of the
concept does not imply implementation. The reasons for
this lack of implementation may be that it is perceived
as a public good, that is, something for someone else to
do, or, there may be cultural and/or religious customs
which hinder its practice.
Regardless of the difficulty in instruction in family
planning, the fact is that it has lagged well behind
other health related efforts. Whether this was because
the ramifications of reducing mortality without a
corresponding reduction in fertility were not seen, or
was a result of health workers simply being too occupied
with meeting the immediate health needs of the populace,
is open for speculation. What is known is that there has
been a lag and that this lag has produced a rapid rise in
22


population (Mauldin 1981).
A second, albeit less obvious, explanation for
continued high fertility in LDC's, stems directly from
the existence of high child mortality rates. Though some
aspects of a particular culture may influence the demand
for children, a more pragmatic reason for having many
children exits as well. Children in LDC's are desired
not only for the satisfaction they bring, but also for
the work they may do and because they are perceived as
being a possible source of support for their parents in
their old age.
Simply put, children are a Third World form of social
security (Berg 1973). Obviously, to be of benefit to
their parents these children must reach adulthood so more
children than actually needed or desired are born to
assure that a reasonable fraction reach maturity.
Even though parents may begin to demand less children
as they observe that more of their children reach
adulthood, any adjustment in fertility must obviously lag
behind as parents consider the new trend. This lag will
not be easily overcome due to the exponential nature of
population growth. Even if fertility were to drop by the
same percentage as has mortality, even to a point where
the rates balance, the population would still increase
23


rapidly due to the substantial increase in the population
base which arose during the lag time.
Now that the link between improved health and increased
population has been demonstrated, the negative effects on
society and development need to be examined specifically.
Population Expansion and Its Effect on Development
The concern about the effect of over population has
been a part of academic economics from its beginning with
Thomas Malthus being the economist most known for his
pessimistic assessments of increasing population and its
effects on society. He saw population increasing until
it pushed agricultural production to its limits so that
food would be scarce and wages be reduced to subsistence
levels causing population to decrease (Todaro 1977).
This cycle would be repeated over and over unless some
other tragedy such as a war, a flood, or disease reduced
the population before it reached agricultural output
capacities.
Though Malthusian predictions have not come to pass in
the modern industrial world, they are still a real
concern in the developing world as scarce resources are
spread over a larger populace. A story in the February
15, 1987, edition of the Denver Post showed the
24


contemporaneousness of this view as coverage was given to
a report released by the Worldwatch Institute. This
report expressed alarm at the rate at which the
population was growing in developing countries and
detailed the strain that this had produced on resources
and food production.
As population grows, income per capita and physical
capital per worker decline while the national debt may
climb as food or other scarce commodities are imported
(Machlup 1970). In addition, the financial resources of
governments are strapped as more public expenditures are
required to meet necessary infrastructure expansion
and/or maintenance.
Another possible negative consequence of lowering
mortality rates are the additional, on average, fifteen
years that have accrued to individuals in developing
countries over the last two and a half decades. These
years need to be assessed more closely to determine
whether they have added fifteen years of productivity to
a person's life as well. If this life span is not
accompanied by sufficient good health enabling a person
to remain productive, then what has been added is fifteen
years of burden and drain on society as consumption
and/or dependency is increased without a corresponding
25


increase in production. Even assuming the individual
remains healthy enough to continue productive work this
still may not translate into increased productivity given
the high rates of unemployment that exist in most
developing countries. Jobs which would have gone to
someone else are retained by the worker and, due to the
increase in population, unemployment may actually rise
(Machlup 1970).
A similar situation exists on the other end of the age
scale. Owing to the fact that IMR has decreased, half
the population in developing countries is under fifteen
years of age and so again, because many are too young to
work and be productive, the net effect of decreasing
mortality has been to increase the number of those
dependent on already limited production. Those who are
able to work may not be able to do so given the high rate
of unemployment.
Positive Impact of Improved Health
on National Development
The preceding analysis showed how improved health has
led to a dramatic increase in population and that the
pressures on society are significant as a result.
However, there is also a strong case for the opposite
26


conclusion, that the improvements in health have in fact
contributed to overall development.
Some theorists, in fact, see the increase in population
as beneficial to the economy because it will, in effect,
increase demand for goods and therefore help industry
achieve economies of scale (Todaro 1970). If this theory
has any merit at all, it is probably in relation to a
fairly well developed economy rather than the typical LDC
economy. Other benefits proposed as evidence as to the
value of improved health and nutrition are more easily
substantiated and examined.
Another positive influence on the economy is the
savings on medical costs gained by both governments and
individuals as a result of efforts undertaken to prevent
malnutrition as it is cheaper to prevent it than to treat
it. In the Caribbean, twenty to forty percent of
pediatric hospital beds are filled by victims of
malnutrition with the average cost per patient being
$7.50 per day; the cost of providing sufficient daily
nutrition is less than one dollar per day through efforts
such as feeding programs (Berg 1973). Other preventative
measures, such as preventing vitamin A deficiency which
results in blindness, are also quite cost effective.
These savings are only relevant if we assume that monies
27


would be spent on curative treatment in the first place.
Increases in productivity through increased worker
health and longer life is also presented as a benefit
stemming from nutrition. The proponents of this view
acknowledge that unemployment is high but feel that
improved health will prove to be a cure for it rather
than a further complication. High unemployment exists,
in large part it is claimed, because unhealthy,
malnourished labor is not able to meet the needs of
modern industry (Berg 1973). Machines set the pace in
many industries and unhealthy workers are either not able
to keep up, making investments in machinery unprofitable
or, even if workers keep up with machines, output may be
of poor quality as a result of the effects of
malnutrition on fitness and mental alertness. Therefore,
it is postulated, a healthier work force will increase
output since other inputs, such as machinery, may be
utilized more cost effectively and so entice
manufacturers to expand production. The logic of this
idea, presented by Alan Berg (1973) in his book The
Nutrition Factor, is sound, but little evidence was given
in support of his thesis except for some data from a
study which showed that absenteeism and accident rates
28


dropped in factories which had instituted feeding
programs.
Berg (1973), and many others as well, propose
additional benefits which improved nutrition brings, all
of which stem from the acceptance of the hypothesis that
increased health equals increased productivity. From
this premise all sorts of deductions are made as to the
impact that improved health can bring to the economy as a
whole. The logic of human capital theory assumes that
increased productivity leads to greater income. A family
with higher income is then able to better care for their
children in terms of nutrition and education. These
children, having had these benefits, will grow up to
become productive workers themselves and so continue the
process with their own children. All along the economy
is benefiting from this increased productivity and
healthier populace.
Certainly these outcomes are plausible, but there is
little empirical data to substantiate this has happened
or is happening now in LDC's. Even in countries which
have seen both productivity and health improve, it is
hard to determine the exact nature of the relationship
between the two factors. Even if a causal relationship
can be established the expected benefits are dependent on
29


the fairly optimistic assumption that industry will
somehow appear at the appropriate moment to utilize the
skills of the newly developed, productive worker.
Conclusion
In this chapter it has been shown that improvements in
health have led directly to dramatic increases in
population. Though high population alone may not cause
an arrest of development, it can certainly cause
additional strain on an already overburdened and weak
economy. However, the issue is not whether efforts to
improve health and nutrition should continue because of
this danger, as the intrinsic value of human life is
sufficient in itself to insure those continued efforts.
(Cost-benefit analysis has not been attempted in this
study because there is no way to place a proper value on
human life and because humanitarian efforts will continue
no matter what the cost-benefit ratio is).
The real question, acknowledging the benefits health
has had on human capital, is whether or not this
improvement in capital then contributes to economic
development and growth.
.The logical conclusion is that healthy, adequately
nourished persons will become more educated, productive,
30


creative, etc. They will make better use of physical
capital as they will have both the skills and stamina to
utilize it. In addition, improvements in the health of
individuals should lead to economic growth as fewer
resources will be drained in treating those who are sick
or malnourished.
Though this is a logical and almost intuitive
conclusion, there is surprisingly little empirical
evidence to substantiate it. Even where strong
correlations can be found between improved health and
economic growth, the causal relationship cannot be
precisely determined. This lack of conclusive data
should be kept in mind so that overly optimistic
predictions are not made and programs are not introduced
without consideration to the relationship between health
and population growth. In the consideration of this
relationship, efforts aimed at improving health should
not necessarily be altered, but rather programs should be
implemented to deal with the externalities which
improvements in health might bring.
31


CHAPTER IV
EDUCATION
Introduction and Overview
When the study of human capital theory and its
application began in earnest in the early 1960's,
education and its contribution to economic growth was the
area of human development most studied and analyzed. The
research done, the data gathered, and the reports issued
were initially concerned with application in developed
countries. However, the underdeveloped world soon became
a major focus as governments and development agents alike
became aware of education's potential to greatly impact
national development. Expectations were raised for great
advancement as the early writings on the subject were
full of hope and optimism and predictions of dramatic
progress in economic and social development as a result
of educational expansion.
The vast majority of benefits predicted have not, in
the estimation of a number of analysts, come to pass.
Now instead of optimism, the theme of current writing on
the subject is of the dismal results of educational


efforts and what went wrong and how, or if, it can be
fixed. While a look at both the hopes and promises of
early thought, as well as the recent reevaluation of it
will constitute a large part of the following discussion,
of primary importance is the determination of whether or
not these pessimistic assessments are valid. Evaluation
of the contribution that education has, or has not made
to economic growth will be based on what has actually
been achieved rather than on what has not. Expectations
not met, though disappointing, should not be the sole
basis for analysis.
This chapter will begin by looking back at the early
development of human capital theory in an attempt to
understand the reasons for education being so highly
thought of as a means of achieving national development.
From there a brief history of application will be covered
as well as some analysis of the relative success or
failure of that application. Finally, an assessment will
be made as to whether human development occurred and, if
so, what impact it has had on national development.
History and Impact of Education in LDC's
As mentioned above, the effort to institute education
in developing countries, once it began, was undertaken
33


with great enthusiasm and with high expectations. Some
idea of the effort put into research and analysis can be
gained just from noting the sheer volume of material
produced on the subject as over five hundred articles,
books, working papers, etc., were published, specifically
relating to the role of education in development, in a
five year span between 1958 and 1963 (Alexander-Frutschi
1973). The title of an article which appeared in
Sociology of Education in 1966 seems to express well the
prevailing sentiment toward this subject at the time as
'The Human Investment Revolution in Economic Thought"
(Bowman 1966).
Another indicator of the new emphasis given to
education as a tool for development can be seen by
looking at the World Bank's involvement in financing
educational projects. Though it began in 1944, the World
Bank did not finance any educationally related projects
or programs until 1962 when it too became convinced of
the benefits to be derived from education (Psacharopoulos
and Woodhall 1985).
The basis for all the interest and ensuing optimism
seems to have been sound and justified based on the
studies undertaken in industrialized economies which
demonstrated the positive effects that education had had
34


on economic growth. If education had proven to be so
beneficial in industrialized economies, where basic
education was well established and fairly sophisticated,
it was thought that it would have an even greater impact
when applied in LDCs where education was relatively
nonexistent. While further studies in the United States
examined the earnings differentials between college and
high school graduates, the study taking place in LDC's
was between persons with four years of primary school as
opposed to persons with none (Psacharopoulos and Woodhall
1985). It seemingly made sense that the introduction of
basic literacy would pay huge dividends much like the
introduction of basic hygiene had in the area of health.
Harbison and Myers (1964) gave their reasons why
education was necessary and ways in which it could bring
about progress. Their thesis was that a shortage of
highly educated and professional manpower, such as
engineers, doctors, agronomists, etc., existed in most
developing countries. Top level managerial and
administrative personnel as well as teachers and nurses
and other persons with specialized skills were also seen
as being in short supply. Harbison and Myers believed
that people with these skills and abilities must be in
place before development could proceed.
35


Education was seen as a part of the cure for this
shortage as it was for the other problem that Harbison
and Myers recognized, that of high unemployment. The
employment problem could be rectified by properly
analyzing the manpower needs and then developing the
specific skills and industries required so that available
labor could be utilized.
Persons in government in LDC's were aware of the large
gap in education between the industrialized worlds and
their own as many had themselves been educated in
institutions in the developed world. They were also
aware of the gap because they were, in many cases, faced
with the task of staffing administrative positions which
had previously been filled by citizens of a particular
colonizing power. Private citizens in LDC's became aware
of the potential that education offered and viewed it as
a ticket out of poverty for their children. The desire
of many governments to modernize and achieve growth, as
well as the populace's desire to lift themselves from
poverty, led to an intense demand for education which
resulted in it becoming, as one author put it, a cult and
a sacred Cow (Todaro 1977).
It was with both this intensity and this optimism that
the endeavor to improve education began in earnest. This
36


optimism came because, or in spite, of the state of
education at the time which was very poor. Literacy and
numeracy which were assumed in the developed world (the
literacy rate in 1960 for the industrialized world was
ninety-seven percent) were found to be almost nonexistent
in developing countries where literate persons were
outnumbered by illiterates by almost three to one (Todaro
1977). In 1960, when the majority of interest in
education began, the literacy rate in all developing
countries was thirty-eight percent and in low income
countries it was only twenty percent. Many countries had
some sort of educational system, some left over from
colonial days, but they were usually small and not widely
distributed, being available, in general, to only upper
class urban children.
The initial strategy for introducing education, or
correcting existing deficiencies, centered around
building schools, printing text books, and training
teachers. These required huge amounts of spending which
have continued and increased to such an extent that they
now account for as much as 14 percent of government
expenditure in LDC's (UNICEF 1988). Besides expenditures
made by governments, other institutions have contributed
substantial sums as well; the World Bank alone has spent
37


over five billion dollars on education projects, from
construction to curriculum development, since 1962
(Psacharopoulos and Woodhall 1985).
Education efforts have grown substantially in terms of
the number of persons involved as well. The educational
process accounts for a great amount of the employment in
LDC's both directly and indirectly. Teachers,
administrators, and text publishers are employed directly
by the educational system while persons such as
construction workers, janitors, and government officials
benefit from the emphasis on educational activity.
One of the results of the dedication of funds and
personnel to the educational process were large increases
in school attendance. Total persons enrolled in schools
in LDC's rose from 163 million in 1960 to 385 million in
1980 (Todaro 1977). This represents an annual increase
of five percent which is greater than the rate at which
the population as a whole has risen. Though eighty
percent of total school enrollment is accounted for by
primary school attendance, secondary school enrollment
has increased by a total of 12.7 percent and enrollment
in levels beyond secondary have increased by a total of
14.5 percent over this same time period (Todaro).
38


In addition to the increase in the number of students
enrolled there has also been an increase in the number of
schooling years completed. Some of these increases have
been small such as in Brazil where the percentage of the
populace completing primary school went from 13.9 percent
in 1950 to 19.4 percent in 1970 (Fields 1982). Other
countries have shown more dramatic increases as
exemplified by Sri Lanka which went from 6.9 percent
completing primary school in 1963, to 35.4 percent by
1971 (Fields).
Besides quantitative improvements there were
improvements in the quality of education as well. In the
last two decades adult male literacy rose form twenty-
five percent to forty-three percent in low income
developing countries and from forty-eight percent to
sixty-eight percent in middle income countries (UNESCO
1988).
Analysis of Impact of Education
The above statistics, while having greatly improved
over the last two decades, do not necessarily indicate
progress or development. In fact there is an overall
disappointment with the lack of growth attributable to
increased education and much discussion as to how and why
39


it failed to bring about the expected results. Though
this is not a paper on the economics of education, a
discussion of these deficiencies is relevant and has some
bearing on the theme of this paper and so will be
discussed to some degree below.
To begin, a reassessment must be made of the
achievements presented above as those very achievements,
to some analysts, show failure rather than success. Of
major concern is the fact that, although literacy per
capita has increased, the total number of illiterates has
actually risen (Coombs 1985). In other words, the
efforts aimed at curtailing literacy, though positive,
have not made the strides that were deemed possible when
the efforts began. A closer look at enrollment levels is
also necessary because high enrollment levels do not
necessarily translate into high levels of completion or
success in school. In thirty African countries the
average percentage of children completing level one is
forty-one percent of those who enrolled (UNICEF 1988).
Aside from coming up short in terms of what it has
achieved, the educational process has, in and of itself
produced some serious negative effects, both on
individuals and upon the economy as a whole. These
negative effects are the result of both the system of
40


education as well as the curriculum. These system and
content failures will be examined together since they
often interrelate.
When the push for education began, one of the benefits
that was predicted was that education would create equity
if it was applied universally. This has not proven to be
the case at all and, it is argued by many (Coombs 1985),
that education has in fact promoted inequality. The
propensity of education to increase the gap between rich
and poor can be seen in two separate contexts; the first
to be considered here is the urban/rural dichotomy.
Statistics show that most children in rural schools
obtain a substantially lower amount of education than do
their urban counterparts. In a study of several
countries it was shown consistently that rural children
do not obtain the same levels of education that urban
children do. In the Dominican Republic, for example,
only 22.9 percent of urban children had not attended any
school while the rate for rural children was 52.8 percent
(UNESCO 1985). Twenty-three percent of urban children
had completed secondary school compared to only 3.7
percent of rural children (UNESCO 1985). The statistics
for the other countries in the study, which represented
every continent, were very similar.
41


There are many explanations for this discrepancy, the
one most often proffered being that education for rural
residents has a much higher opportunity cost because of
the demand for labor in the agricultural sector. The
children, or more precisely their parents, must give up
their children's labor to send them to school. The labor
of urban children is usually not as much a factor since
there are fewer opportunities for their labor to be
utilized and so the opportunity cost of schooling is much
lower. Another problem with eduction in rural areas is
the great distances which must sometimes be traveled to
get to school. This tends to hinder attendance and the
reach of the educational system.
In addition, the curriculum of formal education is not
as directly applicable in rural areas since literacy and
numeracy are of less value in agricultural work than work
one might possibly find in the city.
Another way in which the system has led to increased
inequity is through the way it discriminates between rich
and poor. Some see this as screening, a deliberate
attempt to keep the poor in their place. Others agree
that screening occurs but see it as an externality
produced by the system rather than something planned and
deliberate. Deciding between these two views of how
42


screening occurs is not the issue as both lead to the
same consequence, the widening of the gap between rich
and poor.
One of the causes of this disparity is the fact that
the upper class students have advantages in terms of
better health which gives them a superior capacity for
learning and reduces their absenteeism. They also have
the advantage of parents who are most likely educated and
are able to provide help and encouragement at home. The
system and curriculum of education seems geared more
toward this minority of students than the population as a
whole. As mentioned above, the opportunity cost for
rural students is much higher than that of urban students
from high income homes.
This disparity between rich and poor will continue to
increase as this cycle of educated, wealthy parents
meeting the educational needs of their children is self-
perpetuating. The only consolation in this is that the
public cost of education is equitable as the poor, who
receive the least, also pay the least in terms of taxes
(Fields 1982).
Another reason why education as a system has been
perceived as having failed is due to the way the
employment market has developed. There is a significant
43


unemployment problem in LDC's, which is a concern in and
of itself, but of greater concern is the phenomenon of
the educated unemployed (Fields 1982). The inability of
many LDC economies to absorb available educated labor is
caused by several divers factors, not the least of which
is the fact that not enough jobs exist requiring the
skills that these educated persons possess. However, it
can also be explained, in part, by the failure of the
present educational system which has created false hopes
or expectations in the minds of students as to the kind
of work they would be able to do and the work
opportunities available to them.
These expectations can lead persons to pass up real
employment opportunities because these opportunities may
be perceived as being outside their scope of training
and/or below what they feel equipped to do. Even if
these persons take a job requiring a lower level of
education than they have obtained, an additional problem
is created as they then artificially raise the standards
for a particular job. Many employers will select the
person with the highest level of education available even
though the skills they possess may be much greater than
those required or necessary for the job at hand. This
leads to those with adequate skills being passed over and
44


those with higher skills being under utilized. The net
effect on education is that many drop out of the system
seeing no hope for jobs since the primary school
certificate, which ten years earlier might have ensured
quality employment, is now of significantly lesser value.
It also can lead to an artificially high demand for
higher education as those who stay in the system see that
higher levels of schooling are needed to ensure any sort
of job.
The shortcomings of curriculum were mentioned before in
relation to the lack of relevant education received by
rural students. In addition there are other irrelevant
components of curriculum which affect both urban and
rural students alike since the curriculum in the primary
schools in LDC's is usually designed as preparation for
secondary school rather than as preparation for the job
market. Thus children are required to learn foreign
languages which, though useful for begging from
foreigners or in some other area of the tourist industry,
will prove of little benefit in terms of finding long
term employment.
This problem is not restricted to primary schools alone
as universities in LDC's have been modeled after those in
the developed world whose departments and curriculum may
45


not be appropriate or beneficial to meeting the needs of
a developing society (Todaro 1974).
Even if we are to assume that the education received is
appropriate, it may be of such low quality that it will
still be of little value. The poor quality of education
in LDC's is a result of several factors ranging from such
things as a lack of necessary equipment and texts to the
poor quality of teachers themselves. As much money as
has been spent by governments and other donor agencies,
there are still students without desks, books, adequate
facilities to meet in, etc. A study conducted in the
Philippines in 1977 found that there was only one text
per ten primary students (Heyneman 1982). In addition to
the lack of sufficient funds to ensure adequate supplies
and/or facilities, there is also a lack of funds
available to hire sufficient numbers of qualified
teachers. In Bolivia teacher salaries are equivalent to
four and one half percent of national per capita income
while in Maryland, salaries of teachers represent
seventeen percent (Heyneman).
There are many more items which could be presented to
show how education has failed to bring about progress or
how it has, in and of itself, hindered development from
taking place. "Brain drain," the emigration of those
46


most educated and able to assist in development, another
externality produced by the education system, is an
example of one such subject not covered. Enough have
been presented, however, to give some idea of the
magnitude of the problem as well as its complexity and
diversity. The solutions offered to correct some of the
above deficiencies are numerous and diverse as the
problems themselves, but though interesting, a discussion
of these are not warranted here as they are not critical
to the intended analysis.
It is important at this point to make a couple of
observations and put this whole discussion in a bit
better perspective. First of all, though many failures
have been discussed in the previous few pages,
significant progress has been made and should not be
disregarded simply because the successes were not as
great as expected. Secondly, it needs to be recognized
that the whole study of the economics of education and
its application in LDC's is fairly young, having been
around just under three decades, barely-enough time for
one or two generations to go through an educational
cycle. The point is that it is, and has been, a dynamic
process evolving and taking shape over time. Though the
state of education is less than hoped or planned for
47


initially, analysis is being done and programs are being
implemented to correct these deficiencies and improve
results.
A glimpse of this evolution in design and emphasis can
be seen by looking at the World Bank's experience in
educational development. Initially funds were provided
only for use in the construction of facilities and these
facilities were only for specific instruction in
managerial, scientific, or other practical skills. The
bank then progressed to the point where it financed
primary schools and liberal arts in higher education.
Today it is involved in all aspects of education
including teacher training, text book printing, and
curriculum development (Psacharopoulos and Woodhall
1985). The fact that such efforts are still being
financed by the World Bank and others seems to imply that
education is still a highly valued developmental tool.
Education's Contribution to Development
The question at hand remains, in terms of this paper,
as to whether or not education has led to a development
of human resources and if so, if that improvement has led
to economic growth?
48


The answer given by most, to the first part of the
question, is a qualified yes. The qualifiers vary
depending on the particular bent of the analyst, but
there is little disagreement that education has benefited
persons as a whole. The answer to the second part of the
question, whether economic growth has occurred as a
result of human development having taken place, is a much
more difficult question and there is little consensus
among analysts as to the answer.
Dealing with the human development aspect first, it is
again important to stress that development has occurred
and, though it may not be as great as expected, it is
still significant. Literacy has increased and more
children are completing more schooling and reaching
higher levels than ever before. Stephen P. Heyneman
(1982), who provided the statistics presented above on
the disparity of spending between Bolivia and Maryland,
is still confident enough to make the statement that by
the year 2000, every child born will have at least the
opportunity of attending school for some portion of time.
In addition to increasing human potential, it has
benefitted individual persons directly as many have
received greater earnings due to the education they have
received. Earnings have increased substantially and a
49


study done in Kenya (Bigsten 1984) showed that those with
a secondary education earned four to five times as much
as the person with none.
As for whether benefits accrue to society as a result
of these improvements in education there is evidence to
suggest that it does though this same evidence is open to
some controversy. Again, increased earnings are offered
as proof of productivity. Psacharopoulos and Woodhall
(1985) acknowledge that employment paying higher wages
may come to the educated simply because they have been
"certified by completing the educational process and not
because they have evidenced any greater productive
capacity. They conclude, however, that high wages will
not continue to be paid to these persons if, once they
have been hired, they do not produce and continue to
produce for their employer who is, in all likelihood, an
income maximizer. To back up this conclusion they have
assembled substantial data which shows that earnings
continue to rise during a worker's lifetime rather than
fall, indicating continued productivity. However, their
analysis falls short when applied to the public sector as
productivity is harder to measure. This difficulty in
applying this analysis to the public sector is
significant since government is usually the largest
50


single employer in most developing countries.
Even if earnings do measure productivity, it cannot be
concluded that education has enhanced productivity as it
cannot be determined whether the education enabled the
person or whether the person had some innate abilities
which enabled them to complete schooling. In this case
it may not be the actual education that contributed to
productivity, but the completion of a certain level of
education may be a reflection of some inherent productive
ability.
To prove benefit to society from the increase in
education can be done without having to use earnings as a
measure. Ample studies have been done which have shown
correlations between increases in education and increases
of various types of output in LDC's. Most of these were
done in an agricultural context by noting the increase in
agricultural productivity, measured in crop production,
which occurred after instruction had been given in new or
better.agricultural techniques or methods. The results
showed that average output of farmers, who had had four
years of elementary education, increased by 8.7 percent
after receiving this specific instruction (Psacharopoulos
and Woodhall 1985). These studies involved several
different countries and so are seen as fairly
51


significant. These studies have not been able to explain
just how education improves output, whether It is by
imparting knowledge which can be utilized or by
increasing cognitive ability. One would tend to think it
was the former since the studies also concluded that
there was little evidence that education improved their
market skills, that is their ability to buy low and sell
high.
More than sufficient data exists showing the high
correlation between countries with high economic growth
and high levels of education achieved. The Hicks study
(Psacharopoulos and Woodhall 1985), mentioned in an
earlier chapter, showed that of eighty-three countries
surveyed, the twelve fastest growing also had the highest
levels of literacy and life expectancy. There is little
dispute that a high correlation exists; the disagreement
comes when causation is attempted by those who purport
that this data shows that education leads to high
economic growth. Many theorists, while leaning toward
accepting education as causing development, feel there is
not enough evidence to reach a definitive conclusion.
Gary Fields (1981) expresses well this caution with his
statement that the relationship between education and
development "... suggests that countries may make
52


substantial progress in education when, and only when,
they can afford to" (p.64). This issue will be addressed
more specifically in the chapter on interrelationships.
One other area of benefit attributed to education
should be noted? those that are external to the system.
These purported benefits range from reduction in crime
rates to increased social cohesion. Of the benefits
proposed, the one which seems most logical is the
reduction in birth rates which occur as women stay in
school longer and go on to be employed after their
schooling. Both of these events would serve to delay
marriage and/or child bearing.
Conclusion
Because of the ambiguousness of the nature of the
correlation between education and national development
conclusive statements cannot be made as to exactly how
education has contributed to national development.
However, most analysis is related to determining the
nature of the relationship between education and
development rather than disproving it.
The impact of advances in education have been less
effective in terms of facilitating development than were
initially expected. The failure of education to meet
53


these expectations, as was pointed out in the
introduction to this chapter, may be disappointing, but
cannot be a basis for evaluation.
Regardless of the extent of impact that education is
determined to have on development, efforts in this area
will continue because of education's status as a basic
human right as recognized in a 1947 declaration from the
United Nations (Dejene 1980). The task of development
agents then is to determine how best to invest in
education, not whether to invest at all.
54


CHAPTER V
NONFORMAL EDUCATION
Conceptual Definition of Nonformal Education
Nonformal education has become the current emphasis of
education endeavors specifically, and investment in human
development in general. Many of the problems of formal
education which were pointed out and discussed in the
previous section can, it is believed, be alleviated or
corrected by turning to nonformal education. The
examination of nonformal education is covered separately
from that of education because it is more than just a
refinement of methodology as the skills and knowledge it
intends to impart are different as well.
Before proceeding with this discussion, the term
"nonformal education" needs to be defined as to its
meaning in general and this thesis in particular. The
term itself is of fairly recent origin, used first by
Phillip Coombs in 1968 in a book he had written on the
coming crisis in education; a basic definition has
evolved since though it still means different things to
different people. It is important to point out here that


though the term is fairly new, as is its emphasis by
educators, the concept is not. Anthropologists have long
been studying how enculturation and socialization occur
in all types of societies and many Of these mechanisms of
the transference of knowledge are similar to the way in
which nonformal education functions (Dejene 1980).
One of the most complete definitions of nonformal
education comes from an essay written by Nat. J. Colletta
and Donald B. Holsinger (1982). They first carefully
define formal and informal education so that the
definition and meaning of nonformal education can be
compared and contrasted. All three definitions are
concerned with describing the three key parts of each
particular mode of education: the way in which
knowledge, skill, and attitudes are transmitted, the
particular area of emphasis, and the structure in which
transmission occurs.
According to Colletta and Holsinger (1982), formal
education is very "... deliberate and systematic. ."
(p. 147) in its transmission of the three types of
learning listed above with the emphasis on knowledge. It
occurs in a highly ". . structured format for space,
time, and material, with set qualifications for teachers
and learner, such as are typified in the technology of
56


schooling" (p. 147). Informal education transmits all
three types of learning, stressing attitudes which are
learned incidentally and in a very loose structure "...
with highly diverse and culturally relative patterns for
the organization of time, space, and material. ." (p.
147). From this basis, Colletta and Holsinger define
nonformal education as being similar to formal education
in its "... deliberate and systematic transmission of
knowledge, attitudes, and skills except the stress is on
skills" (p. 147). In addition it ". . avoids the
technology of formal schooling, permitting a more diverse
and flexible deployment of space, time, and material, and
accepting a relaxation of personal qualifications in
response to the work place" (p. 147).
To generalize then, the working definition of nonformal
education for this paper is that it basically emphasizes
training in specific skills, uses a non-rigid methodology
and is focussed on providing instruction and training in
relevant topics.
The efforts in nonformal education have, in large part,
been spawned from the attempts made to correct the
perceived failures of formal education; these failures
being mainly the low, or less than expected levels of
achievement and the high costs at which those
57


achievements have come. Another problem which nonformal
education purports to be able to correct is formal
education's propensity to exacerbate existing inequality
or its inability to correct it. Finally nonformal
education is seen as alleviating some of the rigidity of
the structure of formal education and broadening its
narrow subject matter.
In the following examination of nonformal education,
analysis will be done by focussing on its two
distinctives which are: an emphasis on training and
skill acquisition, and an approach or methodology which
is dynamic, experiential, and relevant.
Nonformal education takes many forms in the developing
world, but in general it tends to focus on rural areas
with agricultural co-op's and extension programs being
typical of nonformal education efforts in these areas.
Skills can be taught in a classroom type setting, with
the opportunity for hands on experience, or they can be
taught in an actual job situation, somewhat like the
apprenticeship model. The item common to both of these
methods is the direct relationship, which can be seen by
the student, between the instruction given and the
application of that instruction. In other words, the
practicality, and hence the relevancy, of the instruction
58


is obvious to the learner and should seemingly, anyway,
provide incentives for learning.
Practical Application of Nonformal Education
Though many of these programs have been conducted in
urban settings, the main emphasis of nonformal education
efforts has been in rural areas with instruction in
agricultural methods, aimed at increasing production,
being the focus. The rural setting is an area where, as
was discussed in the previous section, formal education
has been of less value as that particular type of
knowledge can only be indirectly applied. Nonformal
education purposes to alleviate this problem, not by
replacing formal education, but by concentrating on
developing skills which can be directly utilized in the
agricultural process. Instruction in soil conservation
or animal husbandry should pay greater and more immediate
dividends than literacy or numeracy can for the average
farmer.
A more complete discussion of the process of nonformal
education can be undertaken by looking specifically at an
actual program in animal husbandry in Haiti with which
the author is personally familiar. The specific
instruction is in establishing and nurturing a pig
59


population. Due to an epidemic of swine fever in Haiti a
few years ago, all the pigs were slaughtered by USAID in
an attempt to keep the disease from spreading. This
reintroduction of pigs to Haiti began about five years
ago and was an excellent opportunity to provide
instruction in animal husbandry to the peasant population
in the rural areas.
Formerly pigs ran wild and foraged for their food and
were susceptible to disease. The intent of USAID and
other agencies was that pigs would only be given out to
communities and persons who were able to care for them.
This required the building of a prochurie (pig pen) with
set specifications for its construction. The potential
owners of the pigs were to be given instruction in basic
veterinary care such as vaccinations. They would then be
provided with two pigs which they could breed on the
condition that they return a pig from the first litter to
the program so that it could continue.
The program administered by Integrated Rural
Development, the organization with which the author was
most familiar, was very much a success as several
communities had built prochuries and were tending to a
large population of healthy pigs. This result is even
more significant given the fact that the building of the
60


prochurie and the hiring of a caretaker was to come from
their own pockets rather than from outside assistance.
The success of this project was largely due to the fact
that it was the result of a well thought out and properly
implemented nonformal education program; Looking at it
in the light of the definition of nonformal education
given above, it was systematic, it intended to impart a
specific set of skills, and the methods used suited the
needs of the rural Haitian farmer. In addition the
knowledge was relevant which may be the key as to why the
transmission of skills and information were so effective.
The pigs were in high demand as both a source of food and
of income and immediate benefits could be obtained
because the pigs arrived as soon as the prochurie and
training were completed.
The above example of an actual nonformal educational
program is typical of many efforts undertaken. A wide
variety of programs have been implemented and studies
done on the relative success and failure of various
methods employed One study, for example, was done to
determine the effectiveness of radio in agricultural
instruction in Guatemala (Klees and Wells 1983). The
analysis of method, though interesting, is not a concern
of this paper as the issue here is to establish whether
61


or not nonformal education, having contributed to the
development of individuals has, in turn, led to economic
growth.
In general there is little debate as to whether
nonformal education has added to human development since,
unlike education, the benefits are more readily.seen in
terms of output. Instead of having to prove that output
has increased because persons are more developed (as was
attempted in the chapters on health and on education) we
can prove human development has occurred because the
advances in productivity and output are obvious and the
causal relationship so much more clear. In other words,
the increase in the abilities and skills of persons can
be recognized because of the increases in output these
skills have wrought. Though the results have been
largely positive and optimism remains high regarding the
application of nonformal education, there is some
disappointment that successes haven't been greater.
Books have started to appear on the subj ect such as
Nonformal Education and National Development: A Critical
Assessment of Policy. Research, and Practice (Bock and
Papagiannis 1983). This book, among others, does not
seek to dump nonformal education, but rather to evaluate
it so that it may be applied in the best way possible.
62


The process seems similar to the reevaluation of formal
education which was discussed earlier and which spawned
the interest in nonformal education. Still, nonformal
education is perceived as being relatively effective in
terms of increased output and in terms of cost
effectiveness. Because it focuses on the instruction of
a specific skill, it wastes little time of the student,
or salary of the teacher, in conveying knowledge which is
not of immediate use or benefit.
Importance of Relevancy in Nonformal Education
Though some efforts in nonformal education have proven
to be positive there are still some problems and concerns
which should be noted and discussed. One of the factors
of nonformal education which has enabled it to be so
successful is the relevancy of the training provided. It
is appealing because of the immediate benefits which can
be seen as new skills are applied. This relevancy, this
ability to immediately apply what one has learned,
provides the impetus and encouragement for the student to
study and learn. This positive aspect of nonformal
education breaks down, however, if there are no jobs
available, or land on which to farm, in applying these
newly acquired skills.
63


The program of instructing Haitian farmers in the care
of pigs would not have been as successful if there were
only a hope of one day obtaining pigs. The same is true
with agricultural skills; no improvements in methods will
be implemented if the peasants have no land on which to
utilize them. Even if they do have access to land, they
may not fully implement improvements as the land may not
be theirs and, if made too productive, the land might be
taken back by the owner so that he might receive the
value.
The problem, simply put, is that the relevancy of
training is dependent on industries or occupations being
available to utilize the newly developed skills. It
could be argued, of course, that these skills must
already be in place before an investment will be made in
physical capital of plants and equipment. If this is
true (it seems to be a fairly reasonable deduction) it
will have a negative impact on nonformal education as its
technology will lose one of its most important elements;
that of the relevancy and the ability to immediately use
and receive rewards from the newly acquired skill.
64


Social Stratification and Nonformal Education
Another aspect of nonformal education that needs
evaluation is in the determination as to whether it
corrects problems of inequality, as its proponents
propose, or whether it in fact contributes to inequality.
While efforts in formal education have failed in the
opinion of many to bring forth an egalitarian society, it
was generally assumed that efforts in nonformal education
would prove successful in narrowing the socioeconomic gap
between the urban and rural populace, the rich and the
poor. It was thought that the employment arising from
training in vocational skills and the increased output
in the agricultural sector would provide these persons
with income which should enable them to circumvent the
certification process of formal education and provide an
alternate channel for social and economic upward
mobility.
Though the welfare of the rural populace has certainly
increased to some extent, the gap is no narrower than
before and may in fact be increasing. Some see this as
an intended strategy of,the elite to institutionalize
nonformal education and use it to convey ideals and
attitudes which serve to restrict the mobility of rural
and urban poor. Others see the same results, though as
65


an externality rather than a plot, of the socialization
inherent in nonformal education.
Whether intended or not, there is agreement and
evidence that this socialization does indeed occur as
nonformal education, and the benefits it brings, tends to
pacify or "cool down" the aspirations of rural peasants
and the urban poor (Dali, Klees and Papagiannis 1983).
Both formal and nonformal education serve as
transmitters of attitudes and values, as well as
knowledge and skills. This process is termed
socialization as students learn and incorporate values
that are important to that particular society. There is
nothing inherently wrong with this process as this is how
children everywhere learn the specifics of their culture;
things like morals, acceptable behavior, roles, and
relationships to others. For example, the Boy Scouts
make use of nonformal education in teaching young men and
boys certain values and ideals along with the practical
skills which are taught. A problem occurs when this form
of enculturation is manipulated or inadvertently leads to
the stratification of society.
Nonformal education will not be able to overcome the
existing inequality of a given society if the labor
market is segmented into two distinct sectors of white
66


collar (or managerial and professional) and blue collar
labor and agricultural workers (Bock 1983). If there is
little mobility between sectors then the income gained
from skills learned through a nonformal education program
will not really reduce the gap between rich and poor and
so will not necessarily lead to a more egalitarian
society. The higher paying jobs are still reserved for
those who have obtained the appropriate certification
from the formal education system. These dual labor
markets and this stratification will continue if
selection into a given program (formal or nonformal) is
conditioned on the participants socioeconomic status.
The process of nonformal education, besides having the
potential of exacerbating existing inequality, can also
indirectly lead to it. The nonformal program, if
successful should raise incomes or productivity and so
satisfy the needs of the participant to some extent.
This satisfaction can lead to passivity and so diffuse
any legitimate demands that had been put upon the system
for substantive change (Bock 1983). Though improvements
in individual welfare may result as income is increased,
little has been gained in terms of equality by the
individual who goes form the lowest rung of a traditional
society to the lowest rung of a modern stratified
67


society. Obviously it is up to that individual to decide
if he or she feels better off and, if a person now has
food where they did not before, this is certainly a
worthy accomplishment. The problem is the long run
ramifications that this pacification may produce, for the
gap may widen as the upper classes now have less demands
placed on the formal education system and so, in turn, on
the white collar job market. Further entrenchment may
occur as those in the nonformal education programs begin
to perceive or accept this program as the only one
available to them.
Conclusion
That nonformal education might cause or exacerbate
existing inequalities may not seem to be an economic
issue. Looking just at the bottom line, nonformal
education leads directly to increased output and income
and is cost effective as well, and so, for some, that is
all the justification needed. Taking a long run
perspective, many economists see that unless societal
problems are truly resolved the net result may be the
advent of unrest and disturbances which will adversely
affect society and hence the economy in the future.
68


This problem of nonformal education either not
effectively addressing the problem of inequality or
actually exacerbating it, should not be enough to
diminish its appeal or its potential for providing
persons with skills needed to be productive and so gain
economically. These dangers should not be disregarded as
they are real and significant, nor should they be
exaggerated to the point where the very real benefits are
ignored or overwhelmed in consideration of the potential
costs in terms of inequality.
The bottom line is that nonformal education has led to
the development of individuals and in many ways, such as
improved agricultural productivity, this improvement in
the skills and abilities of individuals has had a
significant impact on the development of the country as a
whole.
At this point optimism remains high among the
proponents of nonformal education as to its ability to
affect development. Similar expectations are held for it
as were previously held for formal education as it shows
promise in correcting many deficiencies in the
socioeconomic structure as well as in advancing the
economy. These assessments need to be looked at closely
for it is certainly worthwhile to consider the negatives
69


now rather than later so that corrections and
adjustments, if needed, can be made.
70


CHAPTER VI
INTERRELATIONSHIPS OF HEALTH, EDUCATION, AND
NONFORMAL EDUCATION
Introduction
Though some mention of the interrelationships that
exist between the factors of human development have been
briefly discussed, a closer examination is intended in
this chapter. The purpose of this examination is to show
both the complexity of the relationships between the
three programs in human development as well as the
difficulties encountered in assessing the impact human
resource development has had on national development.
This analysis should also point out the need for a
holistic effort on the part of development agencies and
governments alike in their human development efforts.
This, because it is difficult at best and counter
productive on the whole, not to consider the effects that
actions in one area will produce in another.
Education and Health
The first relationship to examine is that between
education and health. As was mentioned in an earlier
chapter, the two are closely linked. One of the most


important links found between education and health is the
correlation between the education of the parent and the
health of the child. Some of this may be due to income,
but even in studies where income was held constant, the
association between parental education and child health
was still strong (Psacharopoulos and Woodhall 1985).
Health, in turn, effects education as adequate
nutrition is required for proper development of the brain
and energy needed to attend and be attentive in school.
Nonformal education is relevant here because it is the
means by which much of the instruction in nutrition,
hygiene, and prevention occur. Studies which show that
there is a high degree of correlation between educational
achievement and the meeting of basic health needs cannot
establish causation. The reasonable conclusion would
seem to be that both must occur together and that
nonformal efforts in health instruction should lead to
better performance in formal studies.
Education and Fertility
Another interrelationship that needs some additional
examination is that between education and fertility as
research has established close links between these two
factors. Generally it has been found that as education
72


increases, fertility decreases (Cochrane 1979). Again,
as in the case of health and education, the causal nature
of the relationship is difficult to pin down as each
reinforces the other. It is more easily demonstrated how
improvements in education tend to reduce the fertility
rate, however, than it is to show how fertility affects
education.
Both formal and nonformal education are responsible for
the decline in birth rates. Formal education directly,
by providing literacy which makes accessible a range of
literature containing both the wisdom and the how to's of
birth control and family planning (Cochrane 1979).
Nonformal education is often the means by which the
subject of family planning and birth control are dealt
with. Besides directly affecting fertility, formal and
nonformal education also lead to reductions in fertility
indirectly in a variety of ways. One way in which
education may reduce fertility is through its
socialization function which may convey "modern"
attitudes and behaviors in such areas as appropriate
family size and the acceptability and/or wisdom of birth
control (Machlup 1975).
Female education negatively affects fertility as the
time spent in education may serve to postpone marriage
73


and having children with a further delay occurring if
employment is gained as a result of education received
(Cochrane 1979). Education may also provide some
deductive reasoning skills which may aid parents in
determining appropriate family size and birth spacing
(Machlup 1975).
It should be pointed out here that educated parents
may, in some cases, have more children because they are
more able to afford and care for them.
Declines in fertility also lead to increases in
education as was discussed in the chapter on health and
nutrition. If fewer children are born the total costs of
education per family will decrease and, holding funds
allocated to education constant, more schooling afforded
to each child in terms of quality and/or years of
attendance.
Education and Employment
The correlation between education and employment is
another significant relationship which needs to be
examined. As discussed in the chapters on formal and
nonformal education, there is the problem of which comes
first, the education or the employment. Industry needs
productive labor which may or may not imply anything
74


greater than healthy workers. For industry to grow and
compete, however, there is a need for skilled workers
able to utilize the physical capital as well as a need
for workers who can perform the managerial and
administrative tasks as well.
On the other hand, there may be little incentive for
students to pursue the acquisition of these types of
schools if there are no jobs already in place which may
utilize them. The importance of being able to apply what
has been learned and benefit from that application is
especially crucial in the area of nonformal education as
was detailed in the previous chapter. No real
determination can be made of which area must precede the
other as both are necessary and should occur almost
simultaneously.
Health and Employment
A related area is the relationship between health and
employment. One of the main factors which contributes to
the health of children, aside from education, is parental
income (Psacharopoulos and Woodhall 1985). These two
factors in themselves are related since higher education
may imply higher income. Looking at income in isolation
from education there is an obvious connection between it
75


and employment as good health will result in less
absenteeism and so should produce greater, or at least,
more predictable income. From this relationship it can
be seen that in one instance, that of increased income
due to productivity, health must precede employment. In
another instance, that of the children's health,
employment is the prerequisite.
Conclusion
There are additional interrelationships which could be
explored, but enough have been presented to demonstrate
the complex nature of development efforts aimed at
developing human resources. The efforts in one area will
most likely impact efforts in another either positively
or negatively. The policy implications for development
agencies and governments are that efforts in development,
especially human resource development, must be holistic
and comprehensive. Not only is this necessary so that
efforts in one area of human development do not
negatively affect another, but it is also desirable so
that advantage may be taken of any synergistic affects
resulting from efforts expended simultaneously in all
three areas.
76


CHAPTER VII
SUMMATION AND CONCLUSIONS
1. The study of human capital theory, as well as its
application in LDC's began in earnest approximately
thirty years ago.
2. The theory is based on the premise that labor is
not homogeneous and that the various resources possessed
by persons is a form of capital which can be utilized in
production.
3. Initial analysis purported to find that increases
in output, in the United States and other industrialized
countries, were in excess of what could be accounted for
by increases in physical capital and labor itself. It
was hypothesized that this residual was the result of
increases in human abilities which brought about their
increased productivity.
4. Much of the empirical work done has determined that
this theory is correct to some extent, the problem of
earnings being a measure of productivity notwithstanding.
5. Much optimism was generated as to the effects that
application would have on LDC's and attempts began in
earnest to implement this strategy on the populace of the
LDC's.


6. Improvements in health and nutrition are considered
investment in human capital. These efforts preceded the
development of human capital theory as they were the
concern of agencies, missions, and governments, for
humanitarian reasons.
7. Improvements in health enable labor to contribute
more productively in terms of improved physical and
mental ability and by reducing absenteeism. They also
contribute to the ability to further develop human
resources as they increase the potential for learning
through educational efforts.
8. In the last three decades life expectancy has risen
sharply as all measurements of mortality have declined.
This, coupled with continued high fertility, has caused
population to rise rapidly in many countries, straining
already scarce resources and infrastructure.
9. Education was undertaken initially in a formal
structure concentrating on literacy and numeracy. Many
gains have been made as literacy has increased, but the
expectations had for formal education were more than the
process has produced.
10. The method of formal education has caused
anomalies like the educated unemployed and contributed to
existing inequality in society as it is more relevant and
78


more easily afforded by the upper classes.
11. Nonformal education was proposed as a means of
overcoming many of the negatives of formal education
12. Nonformal education concentrates on training and
specific skill generation through its specific and
practical curriculum. It essentially provides relevant
education at a lower cost than formal education and since
its immediate benefits are more easily seen, it provides
incentive for the learner.
13. The main criticism of nonformal education comes
from social scientists who are concerned with its
stratifying affect on society as it tends to reinforce an
existing stratification. This occurs because nonformal
education tends to select from the urban poor and rural
persons while formal education, and the certification for
white collar employment that it brings, is left to the
upper classes.
14. The three main methods of developing persons are
interrelated and there is a high degree of correlation
between some of the variables such as health and
education, education and income, and education and
fertility. The way in which each affects the other was
discussed but the exact causal relationship remains
undetermined.
79


Many assessments have been made already as to the
relative success or failure of applied human capital
theory and its contribution to personal and. economic
development. All in all the general conclusion reached,
at the close of each of the three sections dealing with
specific strategies for human development, was that these
investments paid off in the form of increased human
ability and potential. In all three areas some
correlation could be seen between the improvement in
individuals and economic growth, but the causal
relationship could only be surmised.
Of the three, nonformal education was the least
ambiguous as to the nature of the relationship between
increase in human potential and increase in national
development.
Though much of the information presented here was
negative in terms of the degree to which human
development led to overall development, rarely was the
relationship questioned. Most of the negative
assessments were reflections of disappointment in that
human development had not had a greater impact on
national development. As was mentioned in the chapter on
education, the application of human resource development
should be done based on what has been accomplished rather
80


than on expectations not met.
The above statement does not imply that the very real
problems of the educated unemployed or overpopulation can
easily be dismissed. Attention must be given to these
problems as well as to the tendency of educational
efforts, both formal and nonformal, to stratify society.
Though these and other potentially harmful effects of
human resource development should be considered when
programs are designed and implemented, they are not
enough to entirely abandon these efforts.
It should be noted that concerted efforts aimed at
developing human resources began in earnest only thirty
years ago and the progress made has been significant.
Finally, though empirical evidence may be lacking to
make conclusive statements about the nature of the
relationship between these three factors and national
development, the logic of the correlation remains. It
would be fair to conclude that, though the exact
contribution of human development to national development
remains undetermined, human development must precede or
accompany national development. The alternative
conclusion, that healthy and educated individuals are not
necessary for economic growth and development, seems
highly unreasonable.
81


Frederick Harbison expressed the logic of investment in
humans well in the following passage from his book, Human
Resources as the Wealth of Nations. According to
Harbison human resources:
. .constitute the ultimate basis for wealth of
nations. Capital and natural resources are
passive factors of production; human beings are
the active agents who accumulate capital, exploit
natural resources, build social, economic and
political organizations, and carry forward
national development (Harbison 1973, p.3).
The statement which follows is the logic for continued
efforts at developing humans as Harbison concludes:
Clearly, a country which is unable to develop the
skills and knowledge of its people and to utilize
them effectively in the national economy will be
unable to develop anything else (Harbison 1973,
p.3).
The analysis and information presented in this thesis
suggest further research in a number of areas. First, as
was mentioned in the introduction, a comparison should be
made between socialist and capitalist countries to
determine what, if any, differences exist between
application and results.
A second area for further research would be the
determination and examination of the cost benefit ratios
of these three factors of human development so that an
investment strategy could be planned and implemented.
Ultimately conclusions must be reached as to how best
82


apply these three methods of developing individuals. The
question as to whether these strategies have led to
national development becomes almost moot since, as was
discussed in previous chapters, health and education are
perceived as basic human rights and efforts in these
areas will continue regardless of any assessments made as
to their effectiveness or lack thereof.
83


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"Humanity's Expansion Pushing Nature Past Threshold of
Recovery." Denver Post. Section A, p. 4. February
15, 1987.
Kiker, B. F. 1971. "The Historical Roots of the Concept
of Human Capital." In Investment in Human Capital, ed.
B. F. Kiker, 51-78. Columbia: University of South
Carolina Press.
85


Klees, Steven J., and Stuart Wells. 1983. "The
Economics of Nonformal Education: Past Approaches,
Critical Problems and New Directions." In Nonformal
Education and National Development, ed. John C. Bock
and George J. Papagiannis. New York: Praeger.
Machlup, Fritz. 1975. Education and Economic Growth.
New York: New York University Press.
Martin, Roy. 1980. Writing and Defending a Thesis or
Dissertation in Psychology and Education. Springfield:
Charles C. Thomas.
Mauldin, W. Parker. "Population Trends and Prospects."
Development Digest. October 1981: 23-34.
Myint, H. 1971. Economic Theory and the Underdeveloped
Countries. New York: Oxford University Press.
Newsom, N. William, and George E. Walk. 1944. Forms and
Standards for Thesis Writing. Scranton: International
Textbook Company.
Psacharopoulos, George, and Maureen Woodhall. 1985.
Education for Development. New York: Oxford
University Press.
Sayre, John, L. 1977. A Manual of Forms for Term Papers
and Theses. Enid: Seminary Press.
Schultz, T. W. "Investment in Man: An Economists View."
Social Science Review. June 1959: 109-117.
"Capital Formation by Education." The Journal
of Political Economy. December 1960: 571-583.
"Investment in Human Capital." American
Economic Review. March 1961: 1-17.
-------. 1971. Investment in Human Capital. New York:
The Free Press.
1971. "Investment in Human Capital." In
Investment in Human Capital, ed. B. F. Kiker, 3-21.
Columbia: University of South Carolina Press.
Thurow, Lester C. 1970. Investment in Human Capital.
Belmont: Wadsworth Publishing.
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Todaro, Michael P. 1977. Economic Development in the
Third World. New York: Longman.
1974. "Education for National Development: The
University." Education and Development Reconsidered,
ed. F. Champion Ward, 204-213. New York: Praeger.
UNESCO. 1985. Statistical Yearbook 1985. Paris:
UNESCO.
UNICEF. 1988. The State of the World's Children 1988.
Oxford: Oxford University Press.
87


Full Text
TABLE OF CONTENTS
CHAPTER I .............................................. 1
NTRODUCTION............................................ 1
Organization of Thesis.......................... 2
Scope of Thesis................................. 3
CHAPTER II ............................................. 4
HUMAN CAPITAL THEORY................................. 4
Development of Human Capital Theory ............ 4
Application of Human Capital Theory ............ 8
Issues in Human Capital Theory ................ 12
Summary and Conclusion .................... 16
CHAPTER III............................................ 17
HEALTH AND NUTRITION................................ 17
Introduction .................................. 17
Overview of Health Related Statistics .... 18
Improvements in Health .................... 20
Relationship Between Health and Increases in
Population................................ 21
Population Expansion and Its Effect on
Development............................... 24
Positive Impact of Improved Health
on National Development . ............. 2 6
Conclusion ................................... 3 0
CHAPTER IV ............................................ 32
EDUCATION .......................................... 32
Introduction and Overview ..................... 32
History and Impact of Education in LDC's . 33
Analysis of Impact of Education ....... 39
Education's Contribution to Development ... 48
Conclusion .................................... 53
CHAPTER V ............................................. 55
NONFORMAL EDUCATION .......................... .... 55
Conceptual Definition of Nonformal
Education ................................ 55
Practical Application of Nonformal
Education ................................ 59
Importance of Relevancy in Nonformal
Education ............................... 63
Social Stratification and Nonformal
Education ................................ 65
Conclusion .................................... 68



PAGE 1

HUMAN RESOURCE DEVELOPMENT AND ECONOMIC GROWTH IN LESSER DEVELOPED COUNTRIES by Kim J. Stafford B. A., University of Colorado at Denver, 1982 A thesis submitted to the Faculty of the Graduate School of the University of Colorado at Denver in partial fulfillment of the requirements for the degree of Master of Arts Department of Economics 1991 .,!""'.-... ... 1,'\(11 , (l

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This thesis for the Master of Arts degree by Kim J. Stafford has been approved for the Department of Economics by David F. Bramhall

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Stafford, Kim J. (M.A., Economics) Human Resource Development and Economic Growth in Lesser Developed Countries Thesis directed by Professor David F. Bramhall Human resource development, or applied human capital theory, began in earnest thirty years ago. The three major areas of human development are health and nutrition, education, and nonformal education. Human capital theory suggests that investments in persons, by means of improving their health, knowledge and skills, will benefit not only the individual in terms of higher wages, but society as well in terms of increased output and economic growth. The theory's merits and deficiencies have been extensively debated, but application in Lesser Developed Countries has proceeded with fairly high expectations. Efforts at improving health have led to significant decreases in death rates and increases in life expectancy. While all measures of mortality declined no adjustments were made in fertility which resulted in high population growth and further strain on resources. Efforts in education initially took the form of formal schooling to correct the great deficiencies in literacy and numeracy. Many improvements have been seen in Some

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statistics, but the early promise of education has faded as it has not been able to bring about the anticipated economic growth. In addition it has not been able to correct inequality and has produced some externalities such as the educated unemployed. Nonformal education was seen as a solution to many of the problems associated with formal education. Nonformal education, while still being specific in terms of what is learned, focuses more on skill acquisition and uses a "hands on" methodology. Much use has been made of nonformal education in rural areas in the way of agricultural projects. Nonformal education has been relatively successful, but has its own problems in that it may tend to stratify society through its focus on the rural areas. All three of these areas affect each other though the exact nature of the relationships are undetermined. The conclusion is that human resource development, in spite of problems which have occurred, has led to economic growth though not as much as was originally anticipated. The form and content of the abstract are approved. I recommend its publication. Signed ____ Suzanne W. Helburn iv

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TABLE OF CONTENTS CHAPTER I NTRODUCTION Organization of Thesis Scope of Thesis CHAPTER II HUMAN CAPITAL THEORY Development of Human Capital Theory Application of Human Capital Theory Issues in Human Capital Theory Summary and Conclusion . CHAPTER I I I . HEALTH AND NUTRITION Introduction Overview of Health Related Statistics . Improvements in Health ... Relationship Between Health and Increases in Population Population Expansion and Its Effect on Development. . . Positive Impact of Improved Health on National Development Conclusion . . . CHAPTER IV EDUCATION Introduction and Overview History and Impact of Education in LDC's Analysis of Impact of Education Education's to Development .. Conclusion CHAPTER V NONFORMAL EDUCATION Conceptual. Definition of Nonformal Education. Practical Application of Nonformal Education Importance of Relevancy in Nonformal Education . Social Stratification and Nonformal Education Conclusion . 1 1 2 3 4 4 4 8 12 16 17 17 17 18 20 21 24 26 30 32 32 32 33 39 48 53 55 55 55 59 63 65 68

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CHAPTER VI . . . . . . INTERRELATIONSHIPS OF HEALTH, EDUCATION, NONFORMAL EDUCATION Introduction . . . . Education and Health . Education and Fertility . Education and Employment . Health and Employment . . Conclusion . . . . . CHAPTER VI I SUMMATION AND CONCLUSIONS . . . . . AND . . . . . . . . . . . . . . . BIBLIOGRAPHY . . . . . . . . . . vi 71 71 71 71 72 74 75 76 .77 .77 84

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CHAPTER I INTRODUCTION Purpose of Thesis It is the intention of this paper to examine the strategy of human resource development and/or human capital theory so as to determine the extent to which, if any, the application of these theories has contributed to the social and economic development of lesser developed countries (LDC's). The above terms, "human resource" and "human capital" may themselves be debated as to their differences, if any, in meaning and the implications that these perceived differences in meaning may have on any analysis or application of theory. Though it is certainly an interesting and worthy debate, a discussion of the implications is beyond the scope of this paper because in the vast majority of sources examined, little distinction between the terms was made and they were used fairly interchangeably. It should be pointed out however, that the use of the term "human capital" would most often imply a neoclassical context while "human resource" may come from a variety of orientations.

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Organization of Thesis As the purpose of this paper is to examine human resource development and, in turn, its relationship to the development of LDC's, the first subject to cover is human capital theory itself. This will be accomplished through a brief highlighting of its history from the time of its introduction a little over twenty-five years ago to its present form and application. After having briefly covered the above topic the focus will shift to an examination of how development of human resources has fared as it has been applied by governments and development agencies alike over the past three decades. This examination will center around three basic means of human development which are most emphasized in LDC's: health and nutrition, education, and the current emphasis, training andjor nonformal education. This examination will include both history and analysis of these approaches to human development as well as appropriate critiques of their application andjor effect. These three means of investment in human development are not isolated since each has an effect on the other. After examining these methods individually, they will be brought together and their interrelationships explored and analyzed. 2

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The final chapter will be a summary of the main points of this thesis as well as an overall assessment and evaluation of human resource development as. a methodology for achieving economic and social development in LDC's. Scope of Thesis The scope of this thesis will be limited to examining non-socialist countries, both as donor and receiver, though some general statistics may include both. The reason for this exclusion is a matter of focus and scope and not one of ignoring a very real and significant consideration in the area of human resource development. Socialist countries have an interest in developing persons also, for reasons similar to non-socialist countries as well as for reasons which are distinctive unto themselves. The comparison and contrast of human resource development in socialist versus non-socialist countries, being both interesting and relevant, suggests itself as a separate and distinct topic for further research. 3

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CHAPTER II HUMAN CAPITAL THEORY Development of Human Capital Theory T. w. Schultz is generally associated with the introduction of human capital theory at the beginning of the 1960's, though the concept was not entirely new as it had been dealt with by men such as Adam Smith and H. von Thunen centuries before. It would be more correct to credit Schultz with being instrumental in rekindling interest and research in the subject than it would be to credit him with originating the concept. In December of 1960 he gave the presidential address at the American Economic Association's annual convention in St. Louis entitled "Investment in Human Capital" which was printed in the March 1961 issue of the American Economic Review. This seems to be the standard work from which one can gain an acquaintance with Schultz and his ideas and also the basic tenants of human capital theory. This foundational work was preceded in 1959 by an article in the December 1960 edition of The Journal of Political Economy entitled "Capital Formation by Education." An even earlier article dealing with the subject was "Investment in Man: An Economist's View,"

PAGE 11

from the June 1959 issue of Social Science Review. Though he may have been the most prolific of authors on the subject at the time he was not alone in his interest in and study of.the subject. At the time that his works were appearing on the subject, several other studies and essays by social scientists, particularly economists who were interested in the contribution of education to economic growth, were published as well. Men such as Gary Becker, E. F. Denison, and Frederick Harbison contributed substantially to the body of theory being developed and their contributions will be examined in more detail later in this chapter. In addition to these men, who examined directly and in detail the subject of human resource development, other noted economists such as Everett Hagen and John K. Galbraith investigated the subject to a certain degree in some of their writings related to development. Essays written on the subject, particularly those concerned with Third World development, dealt with such issues as the under utilization or non-development of the human resources of a country. Other related subjects were also covered such as overpopulation, social stratification and other societal factors which affect the development of human resources. 5

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Besides these contemporaries of Schultz, noted economists of the past such as Say, Senior, and Walras have also contributed to the formation of current thought. B. F. Kiker (1971), in an article entitled Historical Roots of the Concept of Human Capital," presents these men and some of their thoughts which demonstrate their understanding of the value and potential of human capital. Sir William Petty, for example, concerned himself with establishing a monetary value for human life from which he then computed the money value of lives lost in wars or the monetary loss occurring to a country as a result o.f deaths. Nassau Senior, in many of his writings related to labor, dealt for the most part with skills and acquired abilities rather than the worker himself. To examine in more detail the early history of this study we need to again focus on Schultz and his works, as it was he who seemingly formalized or brought to the fore the theoretical analysis of human resource development. Though there had been, as mentioned previously, a lot of research and writing on the subject, there was no real framework within which to analyze, formulate, and theory and application. 6

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Before establishing the framework for human capital theory, however, Schultz (1961) first addressed the aversion that many social scientists felt in dealing with persons as capital. It seemed to many that this theory would reduce humans to something akin to property, no different than physical capital, or much like slaves. Alfred Marshall (Schultz 1961) had acknowledged that humans could be treated as capital in an abstract or mathematical manner, but objected to such treatment in a practical sense since he could not consider Qumans as marketable. It was the prestige of Marshall, Schultz felt, that to some extent accounted for the prevalence of this aversion. Diffusing this distaste of the idea of humans as capital was critical to Schultz's thesis because this aversion, rather than a lack of the concept being understood, was the reason the theory was not being developed. Schultz himself disliked the idea of treating persons as mere material and so attempted to demonstrate that it was not necessary to reduce the theory to that level. In support of his view, Schultz (1961) referenced a work by Von Thunen which pointed out that it was, in fact, a concept which placed great value on human life. 7

PAGE 14

Writing in the late nineteenth century Von Thunen argued that the result of not considering humans as having value was the sacrifice of hundreds of men to save a piece of artillery in times of war. Von Thunen was arguing against the prevailing view of the times that men were to be had for virtually nothing, the only cost being conscription, while cannons had a monetary value attached to them. In addition, Schultz also pointed out that economists did not lump all machinery together without regard as to its state of repair or technological sophistication, but rather these factors were taken into account. He then argued that it made little sense not to take into consideration the obvious differences in skill and ability between workers. Application of Human Capital Theory Schultz's (1971) premise was that investment in humans paid returns to individual workers in the form of higher wages, and to employers and the economy as a whole in the form of increased productivity and output. He substantiated his premise using a rate of return to investment approach by pointing out the differential in wages between those who had training andjor education and 8

PAGE 15

those who did not. The establishment of this theory was followed by ideas for specific application such as how much investment should occur, where _and how it should occur, etc.; some of the details of which will be examined later as they are relevant to contemporary application of the theory. Other economists were presenting similar analyses demonstrating, in slightly different ways, the validity of the concept and the various means by which these concepts could be substantiated. One such economist was E. F. Denison (1962) who used a growth accounting method to present evidence that the increase in output in the United States between 1910 and 1960 could not simply be explained by increases in the amount of labor and physical capital (Psacharopoulos and Woodhall 1985). Growth accounting can be explained by using a simple aggregate production function, Y = f (K, L). Denison found that output (Y) had increased by a greater amount than the increases in the two components, physical capital (K) and labor (L), could account for. Denison postulated that this large residual of unaccounted for growth was partially attributable to a better educated work force. Other researchers took up the task of examining Denison's findings in an attempt to discover 9

PAGE 16

just how much of this residual was due to an improved labor force and how much could be explained by other factors such as economies of scale or improvements in the quality of physical capital. Denison (1962) himself calculated that twenty-three (23) percent of the growth in output between 1929 and 1957 was attributable to an increase in the quality of labor due to education. Later he found, through the application of this method, that only fifteen (15) percent of qrowth in the United Sates since 1950 was a result of increased education (Psacharopoulos and Woodhall 1985). Comparing the rate of return to human capital measured against the rate of return of physical capital, Schultz came up with similar numbers (Psacharopoulos and Woodhall). These methods of analysis were then used to calculate growth attributable to education in developing countries with a wide divergence in results. For instance, where education contributed 6.5 percent to the annual growth rate in Honduras, it contributed only 0.8 percent to that of Mexico (Psacharopoulos and Woodhall 1985). The analysis became, or attempted to become, more exact in terms of the quantitative measurement of returns to investment with the work of Gary Becker (1971). In an 10

PAGE 17

article entitled "Optimal Investment in Human Capital," Becker presents the model Et = Xt + Kt -ct. This equation, according to Becker, shows the net earnings at any age, (Et), is approximately equal to the earnings one would have, given no human capital investment, (Xt), plus the total returns to him/her at time (t) on investments made earlier, (Kt), less the cost of those investments at time ct. To Becker Xt simply represented someone who was alive and breathing, in whom no investment had occurred, and it was assumed that the value of ct was small and could even be ignored. Kt represented all investment made in an individual in areas such as health, education and even basic child rearing. The theory went on to include demand and supply curves.and a discussion of varying rates in return given various investment scenarios. What this review of Becker's (1971) analysis intends to show is how involved and complex the theory had become in a few short years. It was no longer a simple theory of how developed persons contribute to productivity and output. It had now been furbished with all the neoclassical essentials such as would make it quantifiable and manipulable. The reduction of persons to equations and formulas was a part of the maturation 11

PAGE 18

process of theory necessary for manipulation by neoclassical economists and other social scientists. Issues in Human Capital Theory Though the basis for this theory of human capital, the idea that increased investment in persons will increase output and produce returns to the individual, seems almost intuitive and highly logical, it has been justly criticized for some of the theoretical assumptions upon which it rests. The main point of contention is the assumption that earnings are a measure of return on investment, the greater the investment the greater the return or earnings. Though earnings are doubtless a measure of productivity to some extent, there is ample evidence that several other factors play a significant role in determining earnings as well. Social class, race, certification, etc., have an impact on earnings with possibly the best example of this being the disparity in wages between men and women in the same occupation. Becker (1975) seems to acknowledge this fact in Human Capital in which he states that .the reason white urban males acquire more education than others is because they have a higher rate of return available to them. In other 12

PAGE 19

words, similar investments may pay disproportionate. returns to different individuals based on a set of variables other than increased productivity or output. Additional problems arise if the assumption is made that individuals will make investment decisions based on maximizing income alone. It is nearly impossible to assiqn specific values to all investment choices or opportunities though obviously this quantification is desired so that rates of return can be compared. However, just as earnings do not necessarily reflect productivity, neither do they necessarily reflect value to the individual or to society. A good example of just how poor earnings and productivity are as a measure of value can be shown by considering the example of a physician who, choosing to serve in a rural community, can expect to earn substantially less than his urban counterpart. Simply looking at earnings the urban doctor appears to show a higher rate of return to investment and he may possibly be more productive as well since he might work in a large hospital. However, society no doubt receives a greater, or certainly equivalent, return from the services of the rural physician since he is providing a scarce resource. 13

PAGE 20

Using the same sort of analysis we can see how potential future earnings do not always determine investment strategy nor do similar investments return like benefits. If did we could conclude that the physician who chose to work in the rural area made a poor .choice based on the earnings differential between himself and his urban counterpart. However, an individual may place greater emphasis on non-monetary returns and make investment decisions based on other considerations. The rural physician may highly value living in the country for all sorts of non-monetary reasons which are not considered because they are not easily quantified. To reduce all persons to mere income maximizers is quite an over simplification and assumes much. One simply cannot be as sure about what determines investment in persons as compared to decisions regarding investment in machinery. Only the efficient, cost effective characteristics of a machine are considered with little or no value given to any of its other qualities, such as aesthetics, unless they will in some way increase productivity. The issue here is not to establish some exact equation which will account for how variables such as investment and social factors contribute to the makeup of a person's 14

PAGE 21

earnings. Attempting to quantify the various non-income variables which determine an individual's particular investment strategy is likewise not essential. Though many neoclassical economists may be brave or brazen enough to attempt to quantify the above variables, it would seem to be entirely too speculative. and is not, in fact, necessary for the evaluation of how human resource development has contributed to the development of LDC's. The above criticisms of human capital theory, though valid, should not be enough to make us give up on the concept altogether. The criticism has been directed at the evidence offered in support of the theory, earnings as a measure of productivity for instance, not the theory itself as the logic of it remains. Efforts at quantifying the relationship between human development and growth continue with the present method being econometric techniques. In a study done for the World Bank, Norman Hicks (Psacharopoulos and Woodhall 1985) found that of the eighty-three developing countries examined, the twelve fastest growing count_ries in the study also had well above average levels of life expectancy and literacy. A number of other studies help substantiate the theory as well as they show a direct correlation between the level 15

PAGE 22

of schoolinq, the levels of economic qrowth, income, GNP, etc. However, since correlation does not prove causation, the exact nature of this relationship is undetermined. Which factor must precede the other and how do they effect each other? This chicken and eqq type question is a siqnificant one.and the way in which it is resolved has a lot of bearinq on the overall assessment of human resource theory and so will be considered in detail in a later chapter dealinq with the interrelationships of these various factors. Summary and Conclusion To summarize this issue it seems two basic statements can be made. 1) It is intuitively loqical that the development of persons should lead to qreater output as the quality of labor is improved. 2) The evidence offered to support this relationship is based on hiqhly theoretical assumptions as to appropriate measures of productivity, and on correlations which, thouqh siqnificant, are unable to prove causation. The above treatment of human capital theory, while not exhaustive, has provided a sufficient basis for continuinq the analysis of its contribution to economic qrowth and development. 16

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CHAPTER III HEALTH AND NUTRITION Introduction While most of the focus of human capital theory, in its initial development, was on industrialized countries and the contribution of education to growth, a major emphasis in developing countries was in the area of health and nutrition. Adequate health and nutrition were, and in many cases still are, the highest priority as basic health must be in place before other efforts such as education can be effective. Though improvement in basic health was an obvious place to begin developing human potential, it had already begun for humanitarian reasons long before economists showed the value of investment in persons for economic benefit. To get an idea of the magnitude of the health problems present in most LDC's today, this chapter will begin with a look at, and analysis of, some of the relevant statistics.

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overview of Health Related Statistics There are a wide variety of statistics available for countries in various stages of development, but in general all show the incredible lack of basic health care, especially relative to developed countries. The following statistics are from a UNICEF publication entitled The State of the World's Children 1988 in which countries are ranked according to the severity of their child mortality rate (CMR). CMR is a measure of the number of children who die before the age of five for every one thousand born alive. For the thirty-three countries with the worst rates .the average CMR is 211 and for the next worst group of thirty-one countries the average CMR is 125. This compares to an average CMR of just thirteen for the thirty-five countries with the lowest child mortality rate. For the worst countries the infant mortality rate (IMR), which is the number of deaths of infants under one year of age per.one thousand live births, averages 130. The second worst group of thirtyone countries has an average IMR of 85. By comparison, the average IMR for the thirty-five countries with the lowest CMR is just ten. 18

PAGE 25

Another measure of the poor state of health is life expectancy at birth which, for the thirty-three countries with an extremely high CMR, averages forty-seven years. By comparison, the average life expectancy for countries with low CMR is seventy-four. To put this in perspective, the life expectancy in countries such as the United States is seventy-four or a third again as long as the average for most Africans. one of the possible contributing factors to these disparaging statistics is the ratio of physicians to population. The following statistics are from Social Indicators of Development 1987 published by the World Bank. The ratio ranges from one doctor per 30,100 persons in Nepal, to one in 1,500 in Peru. By way of comparison, there are 580 persons per physician in France. Nurses are also in short supply as there are 5,700 persons per nurse in Niger and 1,400 persons per nurse in the Dominican Republic. In the Netherlands there is one nurse for every 130 persons. There are many more statistics that could be presented to further demonstrate the extremely poor state of health which exists in LDC's, but enough have been presented to show the severity of the problem. 19

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Improvements in Health These statistics, while dismal, do not show the great amount of improvement that has taken place in just the last quarter of the century. Between 1960 and 1996 for instance, an average of ten years was added to life expectancy in low income developing countries and, in middle income counties, thirteen years were added (UNICEF 1988). As health care was introduced or upgraded and as nutritional intake improved, mortality decreased substantially in all categories. In 1960 the crude death rate for the least developed countries was twenty-eight; by 1988 that rate had dropped to nineteen (UNICEF 1988). Obviously with the reduction in mortality rates and with the increasing numbers of infants and-children surviving to adulthood, life expectancy increased as was shown above. Much of this was accomplished simply through educating persons in appropriate sanitation methods such as boiling water for drinking and digging latrines to avoid diseases spread by flies. Also having great effect were the vaccinations that were given and other measures, such as spraying for mosquitoes, that went a long way in reducing the spread and extent of malaria. 20

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Due to the recent nature of these dramatic improvements in health it would seem a fairly easy task to assess the impact that this upgrading of the human condition has had on the development of LDC's. In addition, at first glance, one would expect to find that improved health has contributed positively to national development. However, there is a real lack of consensus among social scientists as to whether improved health has had a positive or negative impact on national development and the degree to which it has affected it in either manner. Relationship Between Improvements in Health and Increases in Population Looking first at the negative assessment, a strong case can be made to show how improved nutrition and health, reflected in longer life spans and lower mortality rates, has had a detrimental effect on development. These negative effects are due to the strain on resources that have occurred due to the dramatic increases in population. As more and more children survived their early years due to proper medical care, vaccinations, and hygiene, the net result was a significantly higher population since there were no corresponding reductions in fertility. 21

PAGE 28

Fertility has long been high in developing countries for many reasons which, for the sake of simplification, can be examined as belonging in general to one of two basic categories. The most obvious cause for continued high fertility is the lack of utilization of birth control methods. One explanation for this nonutilization of birth control is the lack of knowledge about family planning and contraceptive use. There are many difficulties in educating persons as to the benefits of family planning and successful conveyance of the concept does not imply implementation. The reasons for this lack of implementation may be that it is perceived as a public good, that is, something for someone else to do, or, there may be cultural and/or religious customs which hinder its practice. Regardless of the difficulty in instruction in family planning, the fact is that it has lagged well behind other health related efforts. Whether this was because the ramifications of reducing mortality without a corresponding reduction in fertility were not seen, or was a result of health workers simply being too occupied with meeting the immediate health needs of the populace, is open for speculation. What is known is that there has been a lag and that this lag has produced a rapid rise in 22

PAGE 29

population (Mauldin 1981). A second, albeit less obvious, explanation for continued high fertility in LDC's, stems directly from the existence of high child mortality rates. Though some aspects of. a particular culture may influence the demand for children, a."'11lore pragmatic reason for having many children exits as well. Children in LDC's are desired not only for the satisfaction they bring, but also for the work they may do and because they are perceived as being a possible source of support for their parents in their old age. Simply put, children are a Third World form of social security (Berg 1973). Obviously, to be of benefit to their parents these children must reach adulthood so more children than actually needed or desired are born to assure that a reasonable fraction reach maturity. Even though parents may begin to demand less children as they observe that more of their children reach adulthood, any adjustment in fertility must obviously lag behind as parents consider the new trend. This lag will not be easily overcome due to the exponential nature of population growth. Even if fertility were to drop by the same percentage as has mortality, even to a point where the rates balance, the population would still increase 23

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rapidly due to the substantial increase in the population base which arose during the lag time. Now that the link between improved health and increased population has been demonstrated, the negative effects on society and development need to be examined specifically. Population Expansion and Its Effect on Development The concern about the effect of over population has been a part of academic economics from its beginning with Thomas Malthus being the economist most known for his pessimistic assessments of increasing population and its effects on society. He saw population increasing until it pushed agricultural production to its limits so that food would be scarce and wages be reduced to subsistence levels causing population to decrease (Todaro 1977). This cycle would be repeated over and over unless some tragedy such as a war, a flood, or disease reduced the population before it reached agricultural output capacities. Though Malthusian predictions have not come to pass in the modern industrial world, they are still a real concern in the developing world as scarce resources are over a larger populace. A story in the February 15, 1987, edition of the Denver Post showed the 24

PAGE 31

contemporaneousness of this view as coverage was given to a report released by the Worldwatch Institute. This report expressed alarm at the rate at which the population was growing in developing countries and detailed the strain that this had produced on resources and food production. As population grows, income per capita and physical capital per worker decline while the national debt may climb as food or other scarce commodities are imported (Machlup 1970). In addition, the financial resources of governments are strapped as more public expenditures are required to meet necessary infrastructure expansion and/or maintenance. Another possible negative consequence of lowering mortality rates are the additional, on average, fifteen years that have accrued to individuals in developing countries over the last two and a half decades. These years need to be assessed more closely to determine whether they have added fifteen years of productivity to a person's life as well. If this life span is not accompanied by sufficient good health enabling a person to remain productive, then what has been added is fifteen years of burden and drain on society as consumption andjor dependency is increased without a corresponding 25

PAGE 32

increase in production. Even assuming the individual remains healthy enough to continue productive work this still may not translate into increased productivity given the high rates of. unemployment that exist in most developing countries. Jobs which would have gone to someone else are retained by the worker and, due to the increase in population, unemployment may actually rise (Machlup 1970) A similar situation exists on the other end of the age scale. Owing to the fact that IMR has decreased, half the population in developing countries is under fifteen years of age and so again, because many are too young to work and be productive, the net effect of decreasing mortality has been to increase the number of those dependent on already limited production. Those who are able to work may not be able to do so given the high rate of unemployment. Positive Impact of Improved Health on National Development The preceding analysis showed how improved health has led to a dramatic increase in population and that the pressures on society are significant as a result. However, there is also a strong case for the opposite 26

PAGE 33

conclusion, that the improvements in health have in fact contributed to overall development. Some theorists, in fact, see the increase in population as beneficial to the economy because it will, in effect, increase demand for goods and therefore help industry achieve economies of scale (Todaro 1970). If this theory has any merit at all, it is probably in relation to a fairly well developed economy rather than the typical LDC economy. Other benefits proposed as evidence as to the value of improved health and nutrition are more easily substantiated and examined. Another positive influence on the economy is the savings on medical costs gained by both governments and individuals as a result of efforts undertaken to prevent malnutrition as it is cheaper to prevent it than to treat it. In the Caribbean, twenty to forty percent of pediatric hospital beds are filled by victims of malnutrition with the average cost per patient being $7.50 per day; the cost of providing sufficient daily nutrition is less than one dollar per day through efforts such as feeding programs (Berg 1973). Other preventative measures, such as preventing vitamin A deficiency which results in blindness, are also quite cost effective. These savings are only relevant if we assume that monies 27

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would be spent on curative treatment in the first place. Increases in productivity through increased worker health and longer life is also presented as a benefit stemming from nutrition. The proponents of this view acknowledge that unemployment is high but feel that improved health will prove to be a cure for it rather than a further complication. High unemployment exists, in large part it is claimed, because unhealthy, malnourished labor is not able to meet the needs of modern industry (Berg 1973). Machines set the pace in many industries and unhealthy workers are either not able to keep up, making investments in machinery unprofitable or, even if workers keep up with machines, output may be of poor quality as a result of the effects of malnutrition on fitness and mental alertness. Therefore, it is postulated, a healthier work force will increase output since other inputs, such as machinery, may be utilized more cost effectively and so entice manufacturers to expand production. The logic of this idea, presented by Alan Berg (1973) in his book The Nutrition Factor, is sound, but little evidence was given in support of his thesis except for some data from a study which showed that absenteeism and accident rates 28

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dropped in factories which had instituted feeding programs. Berg (1973), and many others as well, propose additional benefits which improved nutrition brings, all of which. stem from the acceptance of the hypothesis that increased health equals increased productivity. From this premise all sorts of deductions are made as to the impact that improved health can bring to the economy as a whole. The logic of human capital theory assumes that increased productivity leads to greater income. A family with higher income is then able to better care for their children in terms of nutrition and education. These children, having had these benefits, will grow up to become productive workers themselves and so continue the process with their own children. All along the economy is benefiting from this increased productivity and healthier populace. Certainly these outcomes are plausible, but there is little empirical data to substantiate this has happened or is happening now in LDC's. Even countries which have seen both productivity and health improve, it is hard to determine the exact nature of the relationship between the two factors. Even if a causal relationship can be established the expected benefits are dependent on 29

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the fairly optimistic assumption that industry will somehow appear at the appropriate moment to utilize the skills of the newly developed, productive worker. Conclusion In this chapter it has been shown that improvements in health have led directly to dramatic increases in population. Though high population alone may not cause an arrest of development, it can certainly cause additional strain on an already overburdened and weak economy. However, the issue is not whether efforts to improve health and nutrition should continue because of this danger, as the intrinsic value of human life is sufficient in itself to insure those continued efforts. (Cost-benefit analysis has not been attempted in this study because there is no way to place a proper value on human life and because humanitarian efforts will continue no matter what the cost-benefit ratio is). The real question, acknowledging the benefits health has had on human capital, is whether or not this improvement in capital then.contributes to economic development and growth . The logical conclusion is that healthy, adequately nourished persons will become more educated, productive, 30

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creative, etc. They will make better use of physical capital as they will have both the skills and stamina to utilize it. In addition, improvements in the health of individuals should lead to economic growth as fewer resources will be drained in treating those who are sick or malnourished. Though this is a logical and almost intuitive conclusion, there is surprisingly little empirical evidence to substantiate it. Even where strong correlations can be found between improved health and economic growth, the causal relationship cannot be precisely determined. This lack of conclusive data should be kept in mind so that overly optimistic predictions are not made and programs are not introduced without consideration to the relationship between health and population growth. In the consideration of this relationship, efforts aimed at improving health should not necessarily be altered, but rather programs should be implemented to deal with the externalities which improvements in health might bring. 31

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CHAPTER IV EDUCATION Introduction and Overview When the study of human capital theory and its application began in earnest in the early 1960's, education and its contribution to economic growth was the area of human development most studied and analyzed. The research done, the data gathered, and the reports issued were initially concerned with application in developed countries. However, the underdeveloped world soon became a major focus as governments and development agents alike became aware of education's potential to greatly impact national development. Expectations were raised for great advancement as the early writings on the subject were full of hope and optimism and predictions of dramatic progress in economic and social development as a result of educational expansion. The vast majority of benefits predicted have not, in the estimation of a number of analysts, come to pass. Now instead of optimism, the theme of current writing on the subject is of the dismal results of educational

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efforts and what went wrong and how, or if, it can be fixed. While a look at both the hopes and promises of early thought, as well as the recent reevaluation of it will constitute a large part of the following discussion, of primary importance is the determination of whether or not these pessimistic assessments are valid. Evaluation of thecontribution that education has, or has not made to economic growth will be based on what has actually been achieved rather than on what has not. Expectations not met, though disappointing, should not be the sole basis for analysis. This chapter will begin by looking back at the early development of human capital theory in an attempt to understand the reasons for education being so highly thought of as a means of achieving national development. From there a brief history of application will be covered as well as some analysis of the relative success or failure of that application. Finally, an assessment will be made as to whether human development occurred and, if so, what impact it has had on national development. History and Impact of Education in LDC's As mentioned above, the effort to institute education in developing countries, once it began, was undertaken 33

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with great enthusiasm and with high expectations. Some idea of the effort put into research and analysis can be gained just from noting the sheer volume of material produced on the subject as over five hundred articles, books, working papers, etc., were published, specifically relating to.the role of education in development, in a five year span between 1958 and 1963 (Alexander-Frutschi 1973). The title of an article which appeared in Sociology of Education in 1966 seems to express well the prevailing sentiment toward this subject at the time as "The Investment Revolution in Economic Thought" (Bowman 1966). Another indicator of the new emphasis given to education as a tool for development can be seen by looking at the World Bank's involvement in financing educational projects. Though it began in 1944, the World Bank did not finance any educationally related projects or programs until 1962 when it too became convinced of the benefits to be derived from education (Psacharopoulos and Woodhall 1985). The basis for all the interest and ensuing optimism seems to have been sound and justified based on the studies undertaken in industrialized economies which demonstrated the positive effects that education had-had 34

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on economic growth. If education had proven to be so beneficial in industrialized economies, where basic education was well established and fairly sophisticated, it was thought that it would have aneven greater impact when applied in LDC's where education was relatively nonexistent. While further studies in the United States examined the earnings differentials b _etween college and high school graduates, the study taking place in LDC's was between persons with four years of primary school as opposed to persons with none (Psacharopoulos and Woodhall 1985). It seemingly made sense that the introduction of basic literacy would pay huge dividends much like the introduction of basic hygiene had in the area of health. Harbison and Myers (1964) gave their reasons why education was necessary and ways in which it could bring about progress. Their thesis was that a shortage of highly educated and professional manpower, such as engineers, doctors, agronomists, etc., existed in most developing countries. Top level managerial and administrative personnel as well as teachers and nurses and other persons with specialized skills were also seen as being in short supply. Harbison and Myers believed that people with these skills and abilities must be in place before development could proceed. 35

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Education was seen a part of the cure for this shortage as it was for the other problem that Harbison and Myers recognized, that of high unemployment. The employment problem could be rectified br properly analyzing the manpower needs and then developing the specific skills and industries required so that available labor could be utilized. Persons in government in LDC's were aware of the large gap in education between the industrialized worlds and their own as many had themselves been educated in institutions in the developed world. They were also aware of the gap because they were, in many cases, faced with the task of staffing administrative positions which had previously been filled by citizens of a particular colonizing power. Private citizens in LDC's became aware of the potential that education offered and viewed it as a ticket out of poverty for their children. The desire of many governments to modernize and achieve growth, as well as the populace's desire to lift from poverty, led to an intense demand for education which resulted in it becoming, as one author put it, a cult and a sacred dow (Todaro 1977). It was with both this intensity and this optimism that the endeavor to improve education began in earnest. This 36

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optimism came because, or in spite, of the state of education at the time which was very poor. Literacy and numeracy which were assumed in the developed world (the literacy rate in 1960 for the industrialized world was ninety-seven percent) were found to be almost nonexistent in developing countries where literate persons were outnumbered by illiterates by almost three to one (Todaro 1977). In 1960, when the majority of interest in education began, the literacy rate in all developing countries was thirty-eight percent and in low income countries it was only twenty percent. Many countries had some sort of educational system, some left over from colonial days, but they were usually small and not widely distributed, being available, in general, to only upper class urban children. The initial strategy for introducing education, or correcting existing deficiencies, centered around building schools, printing text books, and training teachers. These required huge amounts of spending which have continued and increased to such an extent that they now account for as much as 14 percent of government expenditure in LDC's (UNICEF 1988). Besides expenditures made by governments, other institutions have contributed substantial sums as well; the World Bank alone has spent 37

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over five billion dollars on education projects, from construction to curriculum development, since 1962 (Psacharopoulos and Woodhall 1985). . Education efforts have grown subst.antially in terms of the number of persons involved as well. The educational process accounts for a great amount of the employment in LDC's both directly and indirectly. Teachers, administrators, and text publishers are employed directly by the educational system while persons such as construction workers, janitors, and government officials benefit from the emphasis on educational activity. One of the results of the dedication of funds and personnel to the educational process were large increases in school attendance. Total persons enrolled in schools in LDC's rose from 163 million in 1960 to 385 million in 1980 (Todaro 1977). This represents an annual increase of five percent which is greater than the rate at which the population as a whole has risen. Though eighty percent of total school enrollment is accounted for by primary school attendance, secondary school enrollment has increased by a total of 12.7 percent and enrollment in levels beyond secondary have increased by a total of 14.5 percent over this same time period (Todaro). 38

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In addition to the increase in the number of students enrolled there has also been an increase in the number of schooling years completed. Some of these increases have been small such as in Brazil where the percentage of the populace completing primary school went from 13.9 percent. in 1950 to 19.4 percent in 1970 (Fields 1982). Other countries have shown more dramatic increases as exemplified by Sri Lanka which went from 6.9 percent completing primary school in 1963, to 35.4 percent by 1971 (Fields). Besides quantitative improvements there were improvements in the quality of education as well. In the last two decades adult male literacy rose form twentyfive percent to forty-three percent in low income developing countries and from forty-eight percent to sixty-eight percent in middle income countries (UNESCO 1988). Analysis of Impact of Education The above statistics, while having greatly improved over the last two decades, do not necessarily indicate progress or development. In fact there is an overall disappointment with the lack of growth attributable to increased education and much discussion as to how and why 39

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it failed to bring about the expected results. Though this is not a paper on the economics of education, a discussion of these deficiencies is relevant and ha$ some bearing on the theme of this paper and so will be discussed to some degree below. To begin, a reassessment must be made of the achievements presented above as those very achievements, to some analysts, show failure rather than success. Of major concern is the fact that, although literacy per capita has increased, the total number of illiterates has actually risen {Coombs 1985). In other words, the efforts aimed at curtailing literacy, though positive, have not made the strides that were deemed possible when the efforts began. A closer look at enrollment levels is also necessary because high enrollment l _evels do not necessarily translate into high levels of completion or success iri school. In thirty African countries the percentage of children completing level one is forty-one percent of those who enr.olled {UNICEF 1988) Aside from coming up short in terms of what it has achieved, the educational process has, in and of itself produced some serious negative effects, both on individuals and upon the economy as a whole. These negative effects are the result of both the system of 40

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education as well as the curriculum. These system and content failures will be examined together since they often interrelate. When the push for education began, one of the benefits that was predicted was that education would create equity if it was applied universally. This has not proven to be the case at all and, it is argued by many (Coombs 1985), that education has in fact promoted inequality. The propensity of education to increase the gap between rich and poor can be seen in two separate contexts; the first to be considered here is the urbanjrural dichotomy. Statistics show that most children in rural schools obtain a substantially lower amount of education than do their urban counterparts. In a study of several countries it was shown consistently that rural children do not obtain the same levels of education that urban children do. In the Dominican Republic, for example, only 22.9 percent of urban children had not attended any school while the rate for rural children was 52.8 percent (UNESCO 1985). Twenty-three percent of urban children had completed secondary school compared to only 3.7 percent of rural children (UNESCO 1985). The statistics for the other countries in the study, which represented every continent, were very similar. 41

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There are many explanations for this discrepancy, the one most often proffered being that education for rural residents has a much higher opportunity cost because of the demand for labor in the agricultural sector. The children, or more precisely their parents, must give up their children's labor to send them to school. .The labor of urban children is usually not as much a factor since there are fewer opportunities for their labor to be utilized and so the opportunity cost of schooling is much lower. Another problem with eduction in rural areas is the great distances which must sometimes be traveled to get to school. This tends to hinder attendance and the reach of the educational system. In addition, the curriculum of formal education is not as directly applicable in rural areas since literacy and numeracy are of less value in agricultural work than work one might possibly find in the city. Another way in which the system has led to increased inequity is through the way it discriminates between rich and poor. Some see this as screening, a deliberate attempt to keep the poor in their place. Others agree that screening occurs but see it as an externality produced by the system rather than something planned and deliberate. Deciding between these two views of how 42

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screening occurs is not the issue as both lead to the same consequence, the widening of the gap between rich and poor. One of the causes of this disparity is.the fact that the upper class students have advantages in terms of better health which gives them a superior capacity for learning and reduces their absenteeism. They also have the advantage of parents who are most likely educated and are able to provide help and encouragement at home. The system and curriculum of education seems geared more toward this minority of students than the population as a whole. As mentioned above, the opportunity cost for rural students is much higher than that of urban students from high income homes. This disparity between rich and poor will continue to increase as this cycle of educated, wealthy parents meeting the educational needs of their children is selfperpetuating. The only consolation in this is that the public cost of education is equitable as the poor, who receive the least, also pay the least in terms of taxes (Fields 1982). Another reason why education as a system has been pe+ceived as having failed is due to the way the employment market has developed. There is a significant 43

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unemployment problem in LDC's, which is a concern in and of itself, but of greater concern is the phenomenon of the educated unemployed (Fields 1982). The inability of many LDC economies to absorb available educated labor is caused by several divers factors, not the least of which is the fact that not enough jobs exist requiring. the skills that these educated persons possess. However, it can also be explained, in part, by the failure of the present educational system which has created false hopes or expectations in the minds of students as to the kind of work they would be able to do and the work opportunities available to them. These expectations can lead persons to pass up real employment opportunities because these opportunities may be perceived as being outside their scope of training and/or below what they feel equipped to do. Even if these persons take a job requiring a lower level of education than they have obtained, an additional problem is created as they then artificially raise the standards for a particular job. Many employers will select the person with the highest level of education available even though the skills they possess may be much greater than those required or necessary for the job at hand. This leads to those with adequate skills being passed over and 44

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those with higher skills being under utilized. The net effect on education is that many drop out of the system seeing no hope for jobs since theprimary school certificate, which ten years earlier.might have ensured quality employment, is now of significantly lesser value. It also can lead to an artificially high demand .for higher education as those who stay in the system see that higher levels of schooling are needed to ensure any sort of job. The shortcomings of curriculum were mentioned before in relation to the lack of relevant education received by rural students. In addition there are other irrelevant components of curriculum which affect both urban and rural students alike since the curriculum in the primary schools in LDC's is usually designed as .preparation for secondary school rather than as preparation for the job market. Thus children are required to learn foreign languages which, though useful for begging from foreigners or in some other area of the tourist industry, will prove of little benefit in terms of finding long term employment. This problem is not restricted to primary schools alone as universities in LDC's have been modeled after those in the developed world whose departments and curriculum may 45

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not be appropriate or beneficial to meeting the needs of a developing society (Todaro 1974). Even if we are to assume that the received is appropriate, it may be of such low quality that it will still be of little value. The poor quality of education in LDC's is a result of several factors ranging from such things as a lack of necessary equipment and texts to the poor quality of teachers themselves. As much money as has been spent bygovernments and other donor agencies, there are still students without desks, books, adequate facilities to meet in, etc. A study conducted in the Philippines in 1977 found that there was only one text per ten primary students (Heyneman 1982). In addition to the lack of sufficient funds to ensure adequate supplies and/or facilities, there_is also a lack of funds available to hire numbers of qualified teachers. In Bolivia teacher salaries are equivalentto four and one half percent of national per capita income while in Maryland, salaries of tea.chers represent seventeen percent (Heyneman). There are many more items which could be presented to show how education has 'failed to bring about progress or how it has, in and of itself, hindered development from taking place. "Brain drain," the emigration of those 46

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most educated and able to assist in development, another externality produced by the education system, is an example of one such subject not covered. Enough have been presented, however, to give some idea of the magnitude of the problem as well as its complexity and diversity. The solutions offered to correct some of the above deficiencies are numerous and diverse as the problems themselves, but though interesting, a discussion of these are not warranted here as they are not critical to the intended analysis. It is important at this point to make a couple of observations and put this whole discussion in a bit better perspective. First of all, though many failures have been discussed in the previous few pages, significant progress has been made and should not be disregarded simply because the successes were not as great as expected. Secondly, it needs to be recognized that the whole study of the economics of education and its application in LDC's is fairly young, having been around just under three decades, time for one or two generations to go through an educational cycle. The point is that it is, and has been, a dynamic process evolving and taking shape over time. Though the state of education is less than hoped or planned for 47

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initially, analysis is being done and programs are being implemented to correct these deficiencies and improve results. A glimpse of this evolution in design and emphasis can be seen by looking at the World Bank's experience in educational development. Initially funds were provided only for use in the construction of facilities and these facilities were only for specific instruction in managerial, scientific, or other practical skills. The bank then progressed to the point where it financed primary schools and liberal arts in higher education. Today it isinvolved in all aspects of education including teacher training, text book printing, and curriculum development (Psacharopoulos and Woodhall 1985). The fact that such efforts are still being financed by the World Bank and others seems to imply that education is still a highly valued developmental tool. Education's Contribution to Development The question at hand remains, in terms of this paper, as to whether or not education has led to a development of human resources and if so, if that improvement has led to economic growth? 48

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The answer given by most, to the first part of the question, is a qualified yes. The qualifiers vary depending on the particular bent of the analyst, but there is little disagreement th.at education has benefited persons as a whole. The answer to the second part of the question, whether economic growth has occurred as a result of human development having taken place, is a much more difficult question and there is little consensus among analysts as to the answer. Dealing with the human development aspect first, it is again important to stress that development has occurred and, though it may not be as great as expected, it is still significant. Literacy has increased and more children are completing more schooling and reaching higher levels than ever before. stephen P. Heyneman (1982), who provided the statistics presented above on the disparity of spending between Bolivia and Maryland, is still confident enough to make the statement that by the year 2000, every child born will have at least the opportunity of attending school for some portion of time. In addition to increasing human potential, it has benefitted individual p 'ersons directly as many have received greater earnings due to the education they have received. Earnings have increased substantially and a 49

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study done in Kenya (Bigsten 1984) showed that those with a secondary education earned four to five times as much as the person with none. As for whether benefits accrue to society as a result of these improvements in education there is evidence to suggest that it does though this same evidence is open to some controversy. Again, increased.earnings are offered as proof of productivity Psacharopoulos and Woodhall (1985) acknowledge that employment paying higher wages may come to the educated simply because they have been "certified" by completing the educational process and not because they have evidenced any greater productive capacity. They conclude, however, that high wages will not continue to be paid to these persons if, once they have been hired, they do not produce and. continue to produce for their employer who is, in all likelihood, an income maximizer. To back up this conclusion they have assembled substantial data which shows that earnings continue to rise during a worker's lifetime .rather than fall, indicating continued productivity. However, their analysis falls short when applied to the public sector as productivity is ha:rder to measure. This difficulty in applying this analysis to the public sector is significant since government is usually the largest 50

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single employer in developing countries. Even if earnings do measure productivity, it cannot be concluded that education has enhanced productivity as it cannot be determined whether the education enabled the person or whether the person had some innate abilities which enabled them to complete schooling. In this case it may not be the actual education that contributed to productivity, but the completion of a certain level of education may be a reflection of some inherent productive ability. To prove benefit to society from the increase in education can be done without having to use earnings as a measure. Ample studies have been done which have shown correlations between increases in education and increases of various types of output in LDC's. Most of these were done in an agricultural context by noting the increase in agricultural productivity, measured in crop production, which occurred after instruction had been given in new or better_agricultural techniques or methods. The results showed that average output of farmers, who had had four years of elementary education, increased by 8.7 percent after receiving this sp'ecific instruction (Psacharopoulos and Woodhall 1985). These studies involved several different countries and so are seen as fairly 51

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significant. These studies have not been able to explain just how education improves output, whether Lt is by imparting knowledge which can be utilized or by increasing cognitive ability. One would tend to think it was the former since the studies also concluded that there was little evidence that education improved their market skills, that is their ability to buy low and sell high. More than sufficient data exists showing the high correlation between countries with high economic growth and high levels of education achieved. The Hicks study (Psacharopoulos and Woodhall 1985), mentioned in an earlier chapter, showed that of eighty-three countries surveyed, the twelve fastest growing also had the highest levels of literacy and life expectancy. There is little dispute that a high correlation exists; the disagreement comes when causation is attempted by those who purport that this data shows that education leads to high economic growth. Many theorists, while leaning toward accepting education as causing development, feel there is not enough evidence to reach a definitive conclusion. Gary Fields (1981) expresses well this caution with his statement that the relationship between education and development . suggests that countries may make 52

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substantial progress in education when, and only when, they can afford {p.64). This issue will be addressed more specifically in the chapter on interrelationships. One other area of benefit aftributed to education should be noted: those that are external to the system. These purported benefits range from reduction in crime rates to increased social cohesion. Of the benefits proposed, the one which seems most logical is the reduction in birth rates which occur as women stay in school longer and go on to be employed after their schooling. Both of these events would serve to delay marriage andjor child bearing. Conclusion Because of the ambiguousness of the nature of the correlation between education and national development conclusive statements cannot be made as to exactly how education has contributed to national development. However, most analysis is related to determining the nature of the relationship between education and development rather than disproving it. The impact of advances in education have been less effective in terms of facilitating development than were initially expected. The failure of education to meet 53

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these expectations, as was pointed out in the introduction to this chapter, may be disappointing, but cannot be a basis for evaluation. Regardless of the extent of impact that education is determined to have on development, efforts in this area will continue because of education's status as basic human right as recognized in a 1947 declaration from the United Nations (Dejene 1980). The task of development agents then is to determine how best to invest in education, not whether to invest at all. 54

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CHAPTER V NONFORMAL EDUCATION Conceptual Definition of Nonformal Education Nonfor.mal education has become the current emphasis of education endeavors specifically, and investment in human development in general. Many of the problems of formal education which were pointed out and discussed in the previous section can, it is believed, be alleviated or corrected by turning to nonfoimal education. The examination of nonformal education is covered separately from.that of education because it is more than just a refinement of methodology as the skills and knowledge it intends to impart are different as well. Before proceeding with this discussion, the term "nonformal education" needs to be.defined as to its meaning in general and this thesis in particular. The term itself is of fairly recent origin, used first by Phillip Coombs in 1968 .,in a book he had written on the coming crisis in education; a basic definition has evolved since though it still means different things to different people. It is important to point out here that

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though the term is fairly new, as is its emphasis by educators, the concept is not. Anthropologists have long been studying how enculturation and sociali.zation occur in all types of societies and many of these mechanisms of the transference of knowledge are similar to the way in which nonformal education functions (Dejene 1980). One of the mos t complete definitions of nonformal education comes from an essay written by Nat. J. Colletta and Donald B. Holsinger (1982). They first carefully define formal and informal education so that the definition and meaning of nonformal education can be compared and contrasted. All three definitions are concerned with describing the three key parts of each particular mode of education: the way in which knowledge, skill, and attitudes are transmitted, the particular area of emphasis, and the structure in which transmission occurs. According to Colletta and Holsinger (1982), formal education is very .. deliberate and systematic. (p. 147) in its transmission of the three types of learning listed above with the emphasis on knowledge. occurs in a highly structured format for space, II It time, and material, with set qualifications for teachers and learner, such as are typified in the technology of 56

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schooling" (p. 147). Informal education transmits all three types of learning, stressing attitudes which.are learned incidentally and in a very loose structure .. with highly diverse and culturally .relative patterns for the organization of time, space, and material (p. 147). From this basis, Colletta and Holsinger define. nonformal education as being similar to formal education in its deliberate and systematic transmission of knowledge, attitudes, and skills except the stress is on skills" (p. 147). In addition it" . avoids the technology of formal schooling, permitting a more diverse and flexible deployment of space, time, and material, and accepting a relaxation of personal qualifications in response to the work place" (p. 14 7) To generalize then, the working definition of nonformal education for this paper is that it basically emphasizes training in specific skills, uses a non-rigid methodology and is focussed on providing instruction and training in relevant topics. The efforts in nonformal education have, in large part, been spawned from the attempts made to correct the perceived failures of formal education; these failures being mainly the low, or less than expected levels of achievement and the high costs at which those 57

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achievements have come. Another problem which nonformal education purports to be able to correct is formal education's propensity to exacerbate existing inequality or its inability to correct Finally -nonformal education is seen as alleviating some of the rigidity of the structure of formal education and broadening its narrow subject matter. In the following examination of nonformal education, analysis will be done by focussing on its two distinctives which are: an emphasis on training and skill acquisition, and an approach or methodology which is dynamic,.experiential, and relevant. Nonformal education takes many forms in the developing world, but in general it tends to focus on rural areas with agricultural co-op's and extension programs being typical of nonformal education efforts in these areas. Skills can be taught in a classroom type setting, with the opportunity for hands on experience, or they can be taught in an actual job situation, somewhat like the apprenticeship model. The item common to both of these methods is the direct relationship, which can be seen by the student, between tne instruction given and the application of that instruction. In other words, the practicality, and hence the relevancy, of the instruction 58

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is obvious to the learner and should seemingly, anyway, provide incentives for learning. Practical Application of Nonformal Education Though many of these programs have been conducted in urban settings, the main emphasis of nonformal education efforts has been in rural areas with instruction in agricultural methods, aimed at increasing production, being the focus. The rural setting is an area where, as was discussed in the previous section, formal education has been of less value as that particular type of knowledge can only be indirectly applied. Nonformal education purposes to alleviate this problem, not by replacing formal education, but by qoncentrating on developing skills which can be directly in the agricultural process. Instruction in soil conservation or animal husbandry should pay greater and more immediate dividends than literacy or numeracy can for the average farmer. A more complete discussion of the process of nonformal education can be undertaken by looking specifically-at an actual program in anima' i husbandry in Haiti with which author is personally familiar. The specific / instruction is in establishing and a pig 59 ----

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population. Due to an epidemic of swine fever in Haiti a few years ago, all the pigs were slaughtered by USAID in an attempt to keep the disease from spreading. This reintroduction of pigs to Haiti began about five years ago and was an excellent opportunity to provide instruction in animal husbandry to the peasant population in the rural areas. Formerly'pigs ran wild and foraged for their food and were susceptible to disease. The intent of USAID and other agencies was that pigs would only be given out to communities and persons who were able to care for them. This required the building of a prochurie (pig pen) with set speci-fications for its construction. The potential owners of the pigs were to be given instruction in basic veterinary care such as vaccinations. would then be provided with two pigs which they could breed on the condition that they return a pig from the first litter to the program so that it could continue. The program administered by Integrated Rural Development, the organization with which the author was most familiar, was very much a success as several communities had built prochuries and were tending to a large population of healthy pigs. This result is even more significant given the fact that the building of the 60

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prochurie and the hiring of a caretaker was to come from their own pockets rather than from outside assistance. The success of this project was largely due to the fact that it was the result of a well thought out and properly implemented nonformal education program. Looking at it -in the light of the definition of nonformal education given above, it was systematic, it intended to impart a specific set of skills, and the methods used suited the needs of the rural Haitian farmer. In addition the knowledge was relevant which may be the key as to why the transmission of skills and information were so effective. The pigs were in high demand as both a source of food and of income and immediate benefits could be obtained because the pigs arrived as soon as the prochurie and training were completed. Tpe above example of an actual nonformal educational program is typical of many efforts undertaken. A wide variety of programs have been implemented and studies done on the relative success and failure of-various methods employed One study, for example, was done to determine the effectiveness of radio in agricultural instruction in Guatemala (Klees and Wells 1983). The analysis of method, though interesting, is not a concern of this paper as the issue here is to establish whether 61

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or not nonformal education, having contributed to the development of individuals has, in turn, led to economic growth. In general there is little debate as to whether nonformal education has added to human development since, unlike education, the benefits are more readily.seen in terms of output. Instead of having to prove that output has increased because persons are more developed (as was attempted in the chapters on health and on education) we can prove human development has occurred because the advances in productivity and output are obvious and the causal relationship so much more clear. In other words, the increase in the abilities and skills of persons can be recognized because of the increases in output these skills have wrought. Though the results have been largely positive and optimism remains high regarding the application of nonformal education, there is some disappointment that successes haven't been greater. Books have started to appear on the subject such as Nonformal Education and National Development: A critical Assessment of Policy, Research, and Practice (Bock and Papagiannis 1983) This book, among others, doesnot seek to dump nonformal education, but rather to evaluate it so that it may be applied in the best way possible. 62

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The process seems similar to the of formal education which was discussed earlier and which spawned the interest in nonformal education. Still, nonformal education is perceived as being relatively effective in terms of increased output and in terms of cost effectiveness. Because it focuses on the instruction of a specific skill, it wastes little time of the student, or salary of the teacher, in conveying knowledge which is not of immediate use or benefit. Importance of Relevancy in Nonformal Education Though some efforts in nonformal education have proven to be positive t)lere are still some problems and concerns which should be noted and discussed. One of the factors of nonformal education which has enabled it to be so successful is the relevancy of the training provided. It is appealing because of the immediate benefits which can be seen as new skills are applied. This relevancy, this ability to immediately apply what one has learned, provides the impetus and encouragement for the student to study and learn. This positive aspect of nonformal education breaks down, however, if there are no jobs available, or land on which to farm, in applying these newly acquired skills. 63

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The program of instructing Haitian farmers in the care of pigs would not have been as successful if there were only a hope of one day obtaining pigs. The same is true with agricultural skills; no improvements in methods will be implemented if the peasants have no land on which to utilize them. Even if they do have access to they may not fully implement improvements as the land may not be theirs and, if made too productive, the land might be taken back by the owner so that he might receive the value. The problem, simply put, is that the relevancy of training is dependent on industries or occupations being available to utilize the newly developed skills. It could be argued, of course, that these skills must already be in place before an investment will be made in physical capital of plants and equipment. If this is true (it seems to be a fairly reasonable deduction) it will have a negative impact on nonformal education as its technology will lose one of its most important elements; that of the relevancy and the ability to immediately use and receive rewards from the newly acquired skill. 64

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Social Stratification and Nonformal Education Another aspect of nonformal education that needs evaluation is in the determination as to whether it corrects problems of inequality, as its proponents propose, or whether it in fact contributes to inequality. While efforts in formal education have failed in the opinion of many to bring forth an egalitarian society, it was generally assumed that efforts in nonformal education would prove successful in narrowing the socioeconomic gap between the urban and rural populace, the rich and the poor. It was thought that the employment arising from training in vocational skills and the increased output in the agricultural sector would provide these persons with income which should enable them to circumvent the certification process of formal education and provide an alternate channel for social and economic upward mobility. Though the welfare of the rural populace has certainly increased to some extent, the gap is no narrower than before and may in fact be increasing. Some see this as an intended strategy of.the elite to institutionalize nonformal education and use it to convey ideals and attitudes which serve to restrict the mobility of rural and urban poor. Others see the same results, though as 65

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an externality rather than a plot, of the socialization inherent in nonformal education. . Whether intended or not, there.is agreement and evidence that this socialization does indeed occur as nonformal education, and the benefits it brings, t .ends to pacify or "cool down" the aspirations of rural peasants and the urban poor (Dall, Klees and Papagiannis 1983). Both formal and nonformal education serve as transmitters of attitudes and values, as well as knowledge and skills. This process is termed socialization as students learn and incorporate values that are important to that particular society. There is nothing inherently wrong with this process as this is how children everywhere learn the specifics of their culture; things like morals, acceptable behavior,. roles t. and relationships to others. For example, the Boy Scouts make use of nonformal education in teaching young men and boys certain values and ideals along with the practical skills which are taught. A problem occurs when this form of enculturation is manipulated or inadvertently leads to the stratification of society. Nonformal education will not be able to overcome the existing inequality of a given society if the labor market is segmented into two distinct sectors of white 66

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collar (or managerial and professional) and blue collar labor and agricultural workers (Bock 1983). If there is little mobility between sectors-then the income gained from skills learned through a nonformal education program will not really reduce the gap between rich and poor and so will not necessarily lead to a more egalitarian society. The higher paying jobs are still reserved for those who have obtained the appropriate certification from the formal education system. These dual labor markets and this stratification will continue if selection into a given program (formal or nonformal) is conditioned on the participants socioeconomic status. The process of nonformal education, besides having the potential of exacerbating existing inequality, can also indirectly lead to it. The nonformal program, _if successful should raise incomes or productivity and so satisfy the needs of the participant to some extent. This satisfaction can lead to passivity and so diffuse any legitimate demands that had been put upon the system for substantive change (Bock 1983). Though improvements in individual welfare may result as income is increased, little has been gained in terms of_equa;l.ity by the individual who goes form the lowest rung of a traditional society to the lowest rung of a modern stratified 67

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society. Obviously it is up to that individual to'decide if he or she feels better off and, if a now has food where they did not before, this is certainly a worthy accomplishment. The problem is the long run ramifications that this,pacification may produce, for the gap may widen as the upper classes now have less demands placed on the formal education system and so, in turn, on the white collar job market. Further entrenchment may occur as those in the nonformal education programs begin to perceive or accept this program as the only one available to them. Conclusion That nonformal education might cause or exacerbate existing inequalities may not seem to be an economic issue. Looking just at the bottom line, nonformal education leads directly to increased output and income and is cost effective as well, and so, for some, that is all the justification needed. Taking a long run perspective, many economists see that unless societal problems are truly resolved the net result may be the advent of unrest and disturbances which will adversely affect society and hence the economy in the future. 68

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This problem of nonformal education either not effectively addressing the problem of inequality or actually exacerbating it, should not be enough to diminish its appeal or its potentialfor providing persons with skills needed to be productive and.so gain economically. These dangers should not be disre9arded as they are real and significant, nor should they be exaggerated to the point where the very real benefits are ignored or overwhelmed in consideration of the potential costs in terms of inequality. The bottom line is that nonformal education has led to the development of individuals and in many ways, such as improved agricultural productivity, this improvement in the skills and abilities of individuals has had a significant impact on the development of. the country as a whole. At this point optimism remains high among the proponents of nonformal education as to its ability to affect development. Similar expectations are held for it as were previously held for formal education as it shows promise in correcting many deficiencies in the socioeconomic structure' as. well as in advancing the economy. These assessments need to be looked at closely for it is certainly worthwhile to consider the negatives 69

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now rather than later so that corrections and adjustments, if can be made. 70

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CHAPTER VI INTERRELATIONSHIPS OF HEALTH, EDUCATION, AND NONFORMAL EDUCATION Introduction Though some mention of the interrelationships that exist between the factors of human development have been briefly discussed, a closer examination is intended in this chapter. The purpose of this examination is to show both the complexity of the relationships between the three programs in human development as well as the difficulties encountered in assessing the impact human resource development has had on national development. This analysis should also point out the need for a holistic effort on the part of development agencies and governments alike in their human development efforts. This, because it is difficult at best and counter productive on the whole, not to consider the effects that actions in one area will produce in another. Education and Health The first relationship to examine is that between education and health. As was mentioned in an earlier chapter, the two are closely linked. One of the most

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important links found between education and health is the correlation between the education of the parent and the health of the child. Some of this may be due to income, but even in studies where income was held constant, the association between parental education and child health was still strong (Psacharopoulos and Woodhall 19 .85). Health, in turn, effects education as adequate nutrition is required for proper development of the brain and energy needed to attend and be attentive in school. Nonformal education is relevant here because it is the means by which much of the instruction in nutrition, hygiene, and prevention occur. Studies which show that there is a high degree of correlation between educational achievement and the meeting of basic health needs cannot establish causation. The reasonable conclusion would seem to be that both must occur together and that nonformal efforts in health instruction should lead to better performance in formal studies. Education and Fertility .Another interrelationship that needs some additional examination is that between education and fertility as research has established close links between these two factors. Generally it has been found that as education 72

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increases, fertility decreases (Cochrane 1979). Again, as in the case of health and education, the causal nature of the relationship is difficult to pin down as each reinforces the other. It is more easily demonstrated how improvements in education tend to reduce the fertility rate, however, than it is to show how fertility.affects education. Both formal and nonformal education are responsible for the decline in birth rates. Formal education directly, by providing literacy which makes accessible a range of literature containing both the wisdom and the how to's of birth control and family planning (Cochrane 1979). Nonformal education is often the means by which the subject of family planning and birth control are dealt with. Besides directly affecting fertility, formal and nonformal education also lead to reductions in fertility indirectly in a variety of ways. One way in which education may reduce fertility is through its socialization function which may convey "modern" attitudes and behaviors in such areas as appropriate family size and the acceptability andjor wisdom of birth control (Machlup 1975). Female education negatively affects fertility as the time spent in education may serve to postpone marriage 73

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and having children with a further delay occurring if employment is gained as a result of education received (Cochrane 1979). Education may also provide some deductive reasoning skills which may aid parents in determining appropriate family size and birth spacing (Machlup 1975). It should be pointed out here that educated parents may, in some cases, have more children because they are more able to afford and care for them. Declines in fertility also. lead to increases in education as was discussed in the chapter on health and nutrition. If fewer children are born the total costs of education per family will decrease and, holding funds allocated to education constant, more schooling afforded to each child in terms of quality andjor .. years .of attendance. Education and Employment The correlation between education and employment is another significant relationship which needs to be examined. As discussed in the chapters on formal and nonformal education, there is the problem of which comes first, the education or the employment. Industry needs productive labor which may or may not imply anything 74

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greater than healthy workers. For industry to grow and compete, however, there is a need for skilled workers able to utilize the physical capital as well as a need for workers who can performthe managerial and administrative tasks as well. On the other hand, there may be little incentive for students to pursue the acquisition of these types of schools if there are no jobs already in place which may utilize them. The importance of being able to apply what has been learned and benefit from that application is especially crucial in the area of nonformal education as was detailed in the previous chapter. No real determination can be made of which area must precede the other as both are necessary and should occur almost simultaneously. Health and Employment A related area is the relationship between health and employment. One of the main factors which contributes to the health of children, aside from education, is parental inqome (Psacharopoulos and Woodhall 1985). These two factors in themselves are related since higher education may imply higher income. Looking at income in isolation from education there is an obvious connection between it 75

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and employment as good health will result in less absenteeism and so should produce greater, or at least, more predictable income. From this relationship it can be seen that in one instance, that of increased income due to productivity, health.must precede employment. In another instance, that of the children's health,. employment is the prerequisite. Conclusion There are additional interrelationships which could be explored, but enough have been presented to demonstrate the complex nature of development efforts aimed at developing human resources. The efforts in one area will most likely impact efforts in another either positively or negatively. The policy implications .for deyelopment agencies and governments are that efforts in development, especially human resource development, must be holistic and comprehensive. Not only is this necessary so that efforts in one area of human development do not negatively affect another, but it is also desirable so that advantage may be taken of any synergistic affects resulting from efforts expended simultaneously in all three areas. 76

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CHAPTER VII SUMMATION AND CONCLUSIONS 1. The study of human capital theory, as well as its application in LDC's began in earnest approximately thirty years ago. 2. The theory is based on the premise that labor is not homogeneous and that the various resources possessed by persons is a form of capital which can be utilized in production. 3. Initial analysis purported to find that increases in output, in the United states and other industrialized countries, were in excess of what could be accounted for by increases in physical capital and labor itself. It was hypothesized.that this residual was the result of increases in human abilities which brought about their increased productivity. 4. Much of the empirical work done has determined that this theory is correct to some extent, the problem of earnings belng a measure of productivity notwithstanding. 5. Much optimism was generated as to the effects that application would have on LDC's and attempts began in earnest to implement this strategy on the populace of the LDC's.

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6. Improvements in health and nutrition are considered investment in human capital. These efforts preceded the development of human capital theory as they were the concern of agencies, missions, and governments, for humanitarian reasons. 7. Improvements in health enable labor to contribute more productively in terms of improved physical and mental ability and by reducing absenteeism. They also contribute to the ability to further develop human resources as they increase the potential for learning through educational efforts. a. In the last three decades life expectancy has risen sharply as all measurements of mortality have declined. This, coupled with continued high fertility, has caused population to rise rapidly in many countries, straining already scarce resources and infrastructure. 9. Education was undertaken initially in a formal structure concentrating on literacy and numeracy. Many gains have been made as literacy has increased, but the expectations had for formal education were more than the process has produced. 10. The method of formal education has caused anomalies like the educated unemployed and contributed to existing inequality in society as it is more relevant and 78

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more easily afforded by the upper classes. 11. Nonformal education was proposed as a means of overcoming many of the negatives of formal education 12. Nonformal education concentrates on training and specific skill generation through its specific and practical curriculum. It essentially provides education at a lower cost than formal education and since its immediate benefits are more easily seen, it provides incentive for the learner. 13. The main criticism of nonformal education comes from social scientists who are concerned with its stratifying affe6t on society as it tends to reinforce an. existing stratification. This occurs because nonformal education tends to select from the urban poor and rural persons while formal education, and the certification for white collar employment that it brings, is left to the upper classes. 14. The three main methods of developing persons are interrelated and there is a high degree of correlation between some of the variables such as health and education, education and income, and education and fertility. The way in which each affects the other was discussed but the exact causal relationship remains undetermined. '79

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Many assessments have been made as to the relative success or failure of applied human capital theory and its contribution to personal and. economic development. All in all the general conclusion reached, at the close of each of the three sections dealing with specific strategies for hUman development, was that these investments paid off in the form of increased human ability and potential. In all three areas some correlation could be seen between the improvement in individuals and economic growth, but the causal relationship could only be surmised. Of the three, nonformal education was the least ambiguous as to the nature of the relationship between increase in human potential and increase in national development. Though much of the information presented here was negative in terms of the degree to which human development led to overall development, rarely was the relationship questioned. Most of the negative assessments were reflections of disappointment in that human development had not had a greater impact on national development. As was mentioned in the chapter on education, the application of human resource development should be done based on what has been accomplished rather 80

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than on expectations not met. The above statement does not imply that the very real problems of the educated unemployed or overpopulation can easily be dismissed. Attention must be given to these problems as well as to the tendency of educational efforts, both formal and nonformal, to stratify.society. Though these and other potentially harmful effects of human resource development should be considered when programs are designed and implemented, they are not enough to entirely abandon these efforts. It should be noted that concerted efforts aimed at developing human resources began in earnest only thirty years ago and the progress made has been significant. Finally, though empirical evidence may be lacking to make conclusive statements about the nature of the relationship between these three factors and national development, the logic of the correlation remains. It would be fair to conclude that, though the exact contribution of human development to national development remains undetermined, human development must precede or accompany national development. The alternative conclusion, that healthy and educated individuals are not necessary for economic growth and development, seems highly unreasonable. 81

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Frederick Harbison expressed the logic of investment in humans well in the following passage from his book, Human Resources as the Wealth of Nations. According to Harbison human resources: constitute the ultimate basis for wealth of nations. Capital and natural resources are passive factors of beings are the active agents who accumulate capital, exploit natural resources, build social, economic and political.organizations, and carry forward national development (Harbison 1973, p.3). The statement which follows is the logic for continued efforts at developing humans as Harbison concludes: Clearly, a country which is unable to develop the ski].ls and knowledge of its people and to utilize them effectively in the national economy will be unable to develop anything else (Harbison 1973, p. 3) The analysis and information presented in this thesis suggest further research in a number of.areas. First, as was mentioned in the introduction, a comparison should be made between socialist and capitalist countries to determine what, if any, differences exist between application and results. A second area for further research would be the determination and examination of the cost benefit ratios of these three factors 'of human development so that an investment strategy could be planned and implemented. Ultimately conclusions must be reached as to how best 82

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apply these three methods of developing individuals. The question as to whether these strategies have led to national development becomes almost moot since, as was discussed in previous health and education are perceived as basic human rights and efforts in these areas will continue regardle$s of any assessments made as to their effectiveness or lack thereof. 83

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BIBLIOGRAPHY Alexander-Frutschi, Marian Crites. 1973. Human Resources and Economic Growth. Menlo Park: Stanford Research Institute. Becker, Gary B. Capital." In Kiker, 40-50. Press. 1971. "Optimal Investment in Human Investment in Human Capital, ed. G. F. Columbia: University of south Carolina ------1975. Human Capital. 2nd ed. New York: National Bureau of Economic Research. Berg, Alan. 1973. The Nutrition Factor. Washington D.C.: The Brookings Bigsten, A. 1984. Education and Income Determination in Kenya. Brookfield, Vermont: Gower Publishing Company. Bock, John c. 1983. "The Institutionalization of Nonformal_ Education:A Response to Conflicting Needs." In Nonformal Education and National Development, ed. John c. Bock and George J.-Papagiannis, 168-183. New York: Praeger. Bock, John c., and George Papagiannis. 1983. "Some Alternative Perspectives on the Role of Nonformal Education in National Development." In Nonformal Education and National Development, ed. John c. Bock and George J. Papagiannis, 3-24. New York: Praeger. Bowman, M. J. "The Human Investment Revolution in Economic Thought." Sociology of Education. Spring 1966: 111-137. Cochrane, Hill. 1979. Fertility and Education: What Do We Really Know? Baltimore: The Johns Hopkins -University Press. Colletta, Nat J., and Donald B. Holsinger. 1982. "Assessing the Impact of Nonformal Education on National Development." In Education and Development, ed. Lascelles Anderson and Douglas M. Windham, 145-158. Lexington: Lexington Books.

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Coombs, Phillip H. 1985. The World Crisis in Education. New York: Oxford University Press. Coombs, Phillip H., and Manzoor Ahmed. 1974. Attacking Rural Poverty: How Nonformal Education Can Help. Baltimore: Johns Hopkins University Press. Dall, Frank, Steven J. Klees, George J. Papagiannis. 1983. "Nonformal Rural Development Schemes in Zambia: Institutionalization and its Effects on Occupational Aspirations of Unemployed Youth." In Nonformal Education and National Development, ed. John c. Bock and George J. Papagiannis, 87-100. New York: Praeger. Dejene, Alemneh. 1980. Development. Canham: Education as a Strategy in University Press of America. Denison, Edward F. 1962. The -Source of Economic Growth in the u.s. and the Alternatives Before Us. New York: The committee for Economic Development. Fields, Gary s. 1982. "Educational Process and Economic Development." In Education and Development, ed. Lascelles Anderson and Douglas M. Windham, 47-72. Lexington: Lexington Books. Harbison, F. H. 1973. Human Resources as the Wealth of Nations. .New York: Oxford University Press. Harbison, F. H., and c. A. Myers. 1964. Education. Manpower and Economic Growth. New York: MacGraw Hill. Heyneman, Stephen P. 1982. "Resource Availability, Equality, and Educational Opportunity Among Nations." In Education and Development, ed. Lascelles Anderson and Douglas M. Windham, 129-144. Lexington: Lexington Books. "Humanity's Expansion Pushing Nature Past Threshold of Recovery." Denver Post. Section A, p. 4. February .15, 1987. Kiker, B. F. 1971. "The Historical Roots of the Concept of Human Capital." In Investment in Human Capital, ed. B. F. Kiker, 51-78. Columbia: University of South Carolina Press. 85

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Klees, steven J., and stuart Wells. 1983. "The Economics of Nonformal Education: Past Approaches, Critical Problems and New Directions." In Nonformal Education and National Development, ed. John c. Bock and George J. Papagiannis. New York: Praeger. Machlup, Fritz. 1975. Education and Economic Growth. New York: New York University Press. Martin, Roy. 1980. Writing and Defending a Thesis or Dissertation in Psychology and Education. Springfield: Charles c. Thomas. Mauldin, W. Parker. "Population Trends and Prospects." Development Digest. October 1981: 23-34. Myint, H. 1971. Economic Theory and the Underdeveloped Countries. New York: Oxford University Press. Newsom, N. William, and George E. Walk. 1944. Forms and Standards for Thesis Writing. Scranton: International Textbook Company. Psacharopoulos, George, and Maureen Woodhall. 1985. Education for Development. New York: Oxford University Press. Sayre, John, L. 1977. A Manual of Forms for Term Papers and Theses. Enid: Seminary Press. Schultz, T. W. "Investment in Man: An Economists View." Social Science Review. June 1959: 109-117. -------"Capital Formation by Education." The Journal of Political Economy. December 1960: 571-583. -------. "Investment in Human Capital." American Economic Review. March 1961: 1-17. -------1971. Investment in Human Capital. New York: The Free Press. -------1971. "Investment in Human Capital." In Investment in Human Capital, ed. B. F Kiker, 3-21. Columbia: University of South Carolina Press. Thurow, Lester c. 1970. Investment in Human Capital. Belmont: Wadsworth Publishing. 86

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Todaro, Michael P. 1977. Third World. New York: Economic Development in the Longman. ------. 1974. "Education for National Development: The University." Education and Development Reconsidered, ed. F. Champion Ward, 204-21.3. New York: UNESCO. 1985. Statistical Yearbook 1985. Paris: UNESCO. UNICEF. The State of the World's Children 1988. Oxford: Oxford University Press. 87