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Week 7: Efficiency and Equity in Education
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Approaches to economic analysis
Micro economics
Micro economics may be defined as the branch of economic analysis which studies the economic
behaviour of individual unit, may be a person, a particular household etc
Micro economics is the study of economics on a small scale, for example the prices of individual
products or the performance of individual companies or industries
...
It deals with a small component of the
national economics
...
Macro economics is
the study of aggregates i
...
aggregative economics
...
The field covered by macro economics include:
1
...
3
...
The theory of money, banking and public finance
Economic growth and development
National income and employment
Investment and consumption functions
...
K
...
S
...
Economics of education is concerned with the application of analytical tools to analyse the
education sector
...
It is the study of techniques or methodologies applied/employed in the critical investigation
(research), examination and analysis of educational issues of a country, with the view of
determining educational priorities and making appropriate recommendations concerning
curriculum review, distribution of budgetary allocations earmarked for educational development
...
Macro economics of education- addressing broad issues in economics of education and
development, education and improved nutrition, education and politics, education and economic
growth, education and fertility rates
Education is viewed as a productive process in which the various human and physical resources,
which they call inputs, are mixed together or processed in various ways resulting in educational
outcomes or outputs
...
2
...
4
...
Creates awareness of the issue of scarcity of resources;
Assists in identifying areas of inefficiency in the educational system;
Can use the knowledge to determine contribution to development;
Can be used to manage change;
Assists in the allocation of resources;
B
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Wambua & M
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Week 7: Efficiency and Equity in Education
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6
...
Help determine efficient size of educational institutions
8
...
Alternative B
1
...
Importance of education to the country’s development; modern industrialised economies
require skilled manpower, and schools and colleges transmit much of the knowledge and
the skills which young people will need when they join the labour force; thus, the
relationship between training and employment are of vital importance to an economist in
the education field;
3
...
Avoid mere rhetoric in educational; policy decisions making;
5
...
Aids in understanding internal and external efficiency of educational institutions;
7
...
Realise the issue of scarcity of resources and the need to use educational resources
optimally
...
• What we produce, as goods or services;
• What we produce them with, that is, productive resources
...
The needs must be placed in some
order of importance and the more important ones are satisfied first
...
Choice is necessary because resources are scarce
...
The concept of opportunity
B
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Week 7: Efficiency and Equity in Education
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Opportunity cost is the cost of an item measured in terms of alternative foregone
...
Opportunity cost is an important economic concept which forms the basis on which economic
cost of factors of production is measured, and so it is fundamental to profit maximisation and
production decisions
...
Since resources are limited, some opportunities have to be sacrificed when investment decisions
are finally made
...
If resources are invested in education for example, they are no longer available for investment in
health, industry or agriculture
...
The opportunity cost of student time is estimated in terms of the value of the alternative
opportunities that are forgone by society; the monetary value of this cost can be derived simply
by calculating EARNINGS FOREGONE
...
Because desires
are psychological and physical, economics deals with man; because resources are constructed
from matter, economics deals with nature
...
Desires are infinite while resources are finite
...
K
...
S
...
This is achieved by using the stock of available resources as
efficiently as possible so as to derive the greatest from them
...
General economics – theory, history and systems;
2
...
Economic statistics;
4
...
International economics;
6
...
Industrial organisation, technological change, industry studies;
8
...
Manpower, labour, population;
10
...
On a micro level economists may be concerned with the minutest detail of a person’s economic
existence, such as the goods he buys in the supermarket, the job he chooses, his pay rate, his
decision on family size, or the type and quantity of education he wishes for himself and his
progeny
...
Economics of education draws upon both micro and macro theory
...
Microeconomic analysis - questions of supply and production functions have their theoretical
foundations in micro economic theory
...
K
...
S
...
Therefore, maximisation of gain, given a set of resources use
(cost), given a goal, follow directly from assumption of rationality
...
Basic economic laws and theories utilised in analysis of education
...
These
goals are achieved by combining theoretical and empirical research
...
Implications are then drawn based on the assumptions and the economic arguments of the theory
...
The two research techniques are complimentary in that theory provides a framework for
conducting empirical research, and empirical research tests the explanatory and predictive power
of a given theory
...
K
...
S
...
To preserve its power of
generalisation and applicability to a host of situations, theory must concentrate on one or a few
crucial characteristics that a broad group of events seem to have in common
...
Theories cannot and should not be judged on the basis of whether individuals assert that they act
as a theory states
...
Theoretical arguments are formulated as models
...
Economic models are succinct statements of economic theory
...
A model of farm production is
shown below:
Sw= ƒ (P,w)
The supply of wheat is a function of the price of wheat
...
Goods and services that yield immediate satisfaction are designated consumption
goods
...
g
...
Durable consumption goods
B
...
Wambua & M
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Week 7: Efficiency and Equity in Education
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Investment goods are ones to be used in the production of future goods
...
Education has attributes that qualify its inclusion into both consumption and investment
categories
...
In addition to these benefits, there are definite financial payoffs to additional years of schooling
and training
...
Thus, acquiring education (schooling and training) in the present increases one’s ability to earn
more; hence, consume more in the future
...
If we accept the assumption that the wage a person is paid is equal to his marginal product (his
contribution to output) then it follows that the increased productivity derived from investing in
education will have a positive effect on his earnings
...
The expenditure of these resources can therefore be treated as investment yielding a stream
of future benefits, the increased output and earnings of the workers
...
K
...
S
...
Mark Blaug has defined human capital as the idea that people spend on themselves in diverse
ways, not for the sake of present enjoyment (consumption) but for the sake of future pecuniary
and non-pecuniary returns
...
Human Capital / the stock of human - the pool of abilities, accumulation of human abilities
(portable competencies)
...
The economic value of education
is assumed to be due to higher productivity of the more educated persons in the labour force
...
Seen as an investment, education:
1
...
It does this in a systemtic
and rational way;
2
...
Provides an explanation for the investment resources in various types and forms of
education;
4
...
Provides an explanation for the use of resources from various stakeholders;
6
...
Examines the monetary and non-monetary returns to education;
8
...
Link between investment in education and earnings
Education yields direct and indirect benefits both to individuals and to society
...
Studies in both developed and developing countries have established a positive relationship
between a person’s earnings and the amount of formal schooling he has received
...
K
...
S
...
These attribute the differences in time earnings among individuals
with various schooling levels to the schooling they have had
...
There is a consumer good component
satisfying consumer well-being in the present, and education is akin to a durable consumer good
conferring future utilities over lifetime of the educated
...
In Kenya,
education determines earnings of primary school level graduates earn less than those with
secondary level of education
...
e
...
University level
Secondary level
EARNINGS
Primary level
20
25
30
35
AGE
Recent studies show that age-earning profiles show a strong relationship between earnings and
education
...
K
...
S
...
Average earnings rise to
a peak in mid-career or later and then stabilise or decline until the age of retirement
...
At every age the highly educated earn
more than workers with less education
...
The profiles are steeper for higher-educated individuals than those with less education
...
Fig 1: A rate of return estimate for university level education
Labour
Earnings
University graduate
Benefits
Secondary School
leavers
Costs
AGE TIME (yrs)
18
B
...
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Week 7: Efficiency and Equity in Education
Cost years
Criticism
1
...
Other factors such as home background, achievement
and motivation also affect earnings, and additional schooling contributes only a part of
the difference
...
Earning differentials may be attributed to native intelligence rather than education
...
3
...
The earnings function
Y= f (S, Iq, O, Q, Ex, F, Age)
Earnings are determined by among other factors:
•
•
•
•
•
•
Amount of schooling (S)
Natural ability (Iq)
Occupational status (O)
Quality of schooling (Q)
Experience (Ex) – annual earnings from previous employment
Family background (F) – age, race, sex, SES are likely inputs here
...
Achieving higher lifetime earnings and occupational status appears to be more a result of
personality, occupational competence and chance than the result of school-shaped cognitive
abilities
...
There are factors which may altogether distort earning differentials
...
K
...
S
...
Again, one’s educational qualifications are associated with one’s
occupation
...
This is the
PATH ANALYSIS
...
This includes expertise, knowledge, and
firm’s organisational learning ability
...
Social cohesion in the organisation is required for quality
performance
...
Human capital development
...
Pursuit, promotion and dissemination of knowledge with an emphasis on practical
knowledge, locally oriented;
2
...
Provision of intellectual leadership – diffusion of meaningful programmes for economic
and social development;
4
...
Promoting social and economic modernisation through example and activities outside the
university including extension work with small scale traders, artisans and farmers;
6
...
Criticism of the HCT
B
...
Wambua & M
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Week 7: Efficiency and Equity in Education
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While the theory has been accepted, criticism has been advanced
...
HCT and marginal theory presupposes that we have perfect competition; yet, there are
labour market imperfections/ distortions
...
2
...
Certificates are used as filtering components
...
Graduates of better schools earn more simply because employers prefer them for high
paying jobs relative top graduates of poor quality schools
...
3
...
There is a distinction between jobs with the future and those
that are dead end jobs
...
The theory does not consider the effects of trade unionism
...
Differentials in abilities
...
g
...
Poor substitutability between occupations;
7
...
There are non-quantifiable benefits of
education;
8
...
It is not easy to quantify the rate of return
...
One’s productivity may not be valued by society;
9
...
Racial and gender issues contradict HCT
...
Sector of employment
...
In conclusion, the distribution of medical care, the provision of labour training in industry, the
incidence of inter-regional and inter-occupational mobility, the control over wages and salaries
by trade unions and professional; associations and even the level of aggregate demand all have
some influence on the size of distribution of earnings in an economy
...
The effect of occupational distribution
B
...
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Week 7: Efficiency and Equity in Education
The pattern of occupational distribution in many countries appears to support the notion that
there are certain occupations which are masculine or feminine
...
Studies have revealed that there are “culturally normative sex stereotyping of occupations” even
among the highly qualified women and emphasised the implications of this for women’s’
earnings expectations
...
There is an effect of education on the earnings power of women
...
Fig 2: Age earnings profiles of men and women (1966-1967) by education level in England and
Wales
...
a
...
K
...
S
...
The direct-returns to education approach
Difference in lifetime earnings can be expressed an as annual percentage rate of return on the
costs involved in obtaining the education
...
The personal profit orientation: this consists of looking at differences in net earnings of
people with varying amounts of education as evidence of the amount of personal
financial gain that can be associated with the attainment of a given level of education
...
The natural productivity orientation: this consists of looking at education related earnings
differentials as partial evidence of the effects of education on the output of a country, and
is based on the premise that in a market economy, differences in earnings reflect
differences in productivity
...
However this is a problem here: the Holding-other-things-constant problem
...
b) Earning differentials may not always be an accurate reflection of differences in marginal
productivities
...
Estimation procedures
To estimate the internal rate of return to investment in schooling, we require data on:
•
Costs
B
...
Wambua & M
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Week 7: Efficiency and Equity in Education
•
•
•
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Total resource costs
Private resource costs for various levels of schools
Age-income patterns by each level of schooling
Life-cycle income streams can be established to show how each level of flows of costs are
incurred during schooling and the subsequent flows of additional income that can be attributed to
that schooling
...
But for individuals
and/ or their parents, the relevant rates are those based upon private resource costs
...
WEEK THREE
EDUCATION AS A CONSUMPTION AND INVESTMENT COMMODITY
Education is both a consumption and investment good
...
Investment is saving or engaging
in productive work so that future consumption is guaranteed
...
It involves setting aside budgetary
allocations to invest in training and development of human resources
...
The concept of investment ultimately implies
that there are returns and profits in the future
...
Educational systems make and maintain the supply of human skills, which is flexible and
adaptable in relation to the changing manpower needs of modern technological society
...
B
...
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Week 7: Efficiency and Equity in Education
Investment in education system provides the basis for development and research
...
The educational investment of a country keeps intact and constantly adds to the stock of
knowledge and makes possible continuous research and discovery of new methods and
techniques
...
Note that economic and social forces interact
...
Developing countries have invested in education for a number of reasons including:
•
•
•
•
Manpower demands
Encouraging modern attitudes
Acculturating diverse groups
Providing economic opportunities for the people
External economies, indirect benefits or social benefits
External economies (indirect/externalities) consist of those benefits which are not confined to
individual economic units (spillovers) to the economy as a whole, raising the level of real income
and welfare generally
...
g
...
The educational process is intimately related to advances in knowledge
...
K
...
S
...
Education can be regarede as investment, that is something which is purchased for the sake of
benefits which he is expected to yield in the future
...
Social returns to investment in education
Social returns calculations are an attempt to measure the net benefit to society as a whole from
investment in education (direct benefits which society obtains from investment in education)
...
Social rates of return are seen as a guide to public policy
...
Social returns and cost-benefit analysis
Cost-benefit analysis
This is the rate of return approach
...
Generally, such an exercise not only involves tangible costs and benefits but also intangibles, for
example, the value of time saved by travelers on an existing route which has been replaced or
supplemented by a motorway and secondary or indirect benefits and costs such as saving on
maintenance costs on existing roads
...
CBA is a mode of analysis of current relationships between education and income and not a
planning technique
...
B
...
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The approach is based upon the assumption that wages and salaries paid to workers closely
reflect differences in their productivity and that variations in their productivity are primarily the
result of differences in the amounts and kinds of education they have received
...
This is because
the approach is based upon study of past trends and cannot be assumed to be securely futureoriented
...
CBA considers
only direct and tangible benefits and costs to the state and individual
...
Similar
remarks apply to intangible benefits
...
Ultimately, there is change in productivity and
output growth in various ways ranging from the undertaking of research and development
of knowledge through literacy
...
Residence-related benefits
These are concerned with the benefits which accrue to society via the family being
educated
...
2
...
K
...
S
...
This is impossible to quantify
...
Benefits to the society in general
These are also difficult to measure
...
For example, education enables
people to file tax returns resulting in a more efficient use of resources compared to the
alternative of hiring the services of an accountant
...
g
...
How best to provide vocational training
...
Social rates of return have been calculated for various
types of vocational training in Malaysia, Israel, India, Kenya, Chile, Peru, Brazil and Colombia
...
World Bank staff working paper no 713
...
Earnings do not perfectly measure productivity
...
2
...
3
...
Numerical estimates of rates of return that in some cases are based on inadequate data or
may not take into account wastage, unemployment, or the influence of other factors that
help to determine earnings
...
CBA acts as a guide in the allocation of
educational resources between different levels/types of educational projects
...
K
...
S
...
Consumption is satisfaction and has non-quantifiable benefits
...
An enrolment may bring current consumption benefits
...
Socrates for instance advocated
that people should be very analytical and given to questioning; they should derive pleasure,
enjoyment and enlightenment
...
NB
There is a need for a balanced curriculum
...
g
...
In the 1970s the World Bank came up with a very clear definition of what it wanted education to
look like in LDCs
...
Eradication/ reduction of poverty through provision of basic needs and raising the
standards of living
...
2
...
(Investment
aspect)
...
Development of skills specifically for rural areas
...
4
...
(Investment aspect)
...
Address issues of equity
...
(Investment aspect)
...
Ensuring that education is provided efficiently by avoiding wastage
...
Educational objectives in Kenya
1
...
Education should recognise and equip the youth with knowledge and skills
...
3
...
(Investment aspect)
...
Education should provide full development of talent and personality
...
K
...
S
...
Education should promote social justice and morality, social obligation and sense of
responsibility
...
Education should foster positive attitudes towards other nations
...
Benefits include:
•
•
•
•
•
Employment
Increased incomes
Population control
Agriculture development
Increased productivity
WEEK FOUR
DEMAND AND SUPPLY OF EDUCATION
...
A desire does not
become a demand unless it is backed up by the ability and willingness to satisfy it (effective
demand)
...
Economists therefore emphasize that demand – dd – for education is dependent on the
B
...
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Week 7: Efficiency and Equity in Education
price and the foregone earnings of the pupils and the students who continue with their education
...
Economists have tried to analyse trends in private or individual dd for higher education by means
of the demand function
...
The demand function
This is a statement which expresses the relationship between two or more variables such as
prices and the physical quantities demanded
...
e
...
Other factors include employment prospects for
graduates and the expected lifetime earnings of graduates compared with those who leave school
at 16 or 18 years
...
The demand function can be expressed as shown below:
qnd = ƒ Pn,P1,…P(n-1), Y,E
Where qnd is the quantity that the household demands of some commodity labelled n
Pn is the price of this commodity
P(n-1) is the price of all other commodities
Y is the household’s income
E is a host of sociological factors
Demand schedules and demand curves
B
...
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Week 7: Efficiency and Equity in Education
An individual demand schedule is a list of the various quantities of a commodity which an
individual consumer purchases at different prices in the market
...
Demand schedule for an individual consumer/ household
Price of 200pg book
Quantity of books
demanded
1
2
3
4
5
30
25
20
15
10
Price 100
80
70
60
50
1
2
3
4
5
A normal demand curve slopes downwards from left to right
...
This is so because quantity demanded increases as the price reduces (income and
other factors remaining constant
...
At a higher price, less of the commodity would be purchased and a
lower price, more of it would be bought, provided the conditions of demand remain unchanged
...
K
...
S
...
Private demand for education
Refers to the number of persons who like or whose parents would like them to enrol in school
system under the prevailing conditions and are able to meet the direct cost of education
...
Social demand for education
This is Demand for education by society
...
Therefore all democratic governments desire to comply
with the demand for education of their masses
...
Factors determining the demand for education
1
...
If government decides to make secondary
school education free, demand for it will definitely increase
...
Consequently this resulted in increase in enrolment
...
The direct costs include fees, uniforms, transport costs while indirect costs include
earnings foregone (opportunity costs)
...
This has influenced demand for primary education in Kenya
...
K
...
S
...
In Ghana and Nigeria for example, pupils carry chairs and desks to
school
...
Changes in attitudes or tastes of people
From the historical perspective, there have been educational programmes which have been very
fashionable to take
...
For example, in Kenya during the
early years of independence, degree programmes
3
...
Educogenic factors
5
...
Supply therefore is the amount of a commodity which
producers wish to supply at each market price, other factors held constant
...
The supply function
qsn= f (Pn, F1, Fn)
Where Pn is the price
qsn is the quantity of a commodity supplied
F1 Fn are prices of factors of production and the state of technology
...
K
...
S
...
It is drawn on the assumption that all other factors that
influence quantity supplied remain constant, and its upward slope indicates that the higher the
price, the more producers would wish to sell
...
Supply of education
Factors influencing the supply of education
Unlike the supply of other commodities, the supply of education is not purely tied to price
...
The major supplier of
education (the government) therefore looks at benefits of education both to individuals and
society at large
...
Cost of education
This is the price charged
...
Regardless of the cost of education, the government must provide education
because education is not viewed from an economic standpoint but from the social aspect
...
Benefits that accrue to the government from education
The major factor influencing supply of education is the expected benefits from a type of
education or level of education
...
K
...
S
...
g
...
3
...
For example, innovations that have been developed in
teaching more students at minimal costs such as DE, External Degree Programmes etc
...
Country’s level of economic growth
...
Most rich countries have very high literacy levels
...
The financial resources available to the government will influence
its decision to invest more in education
...
This is common with
third world countries
...
K
...
S
...
There is great demand for education by individual’s families
and others
...
Neighbourhoods’ effects of education
It is important to economists that expenses being incurred on education should be carefully
considered after justifying the role education plays in improvement of quality of life of the
people concerned or of the country at large
...
The
market benefits include the following:
a) Increased lifetime earnings
Studies have been done on income levels and it has been established that there is very high
correlation between level of education and lifetime earnings
...
K
...
S
...
When income increases individuals are able to enhance their overall standards of living
...
c) Increased productivity:
More education may also contribute to raised quality of labour force and hence increased
productivity within a given period
...
d) Increased national wealth:
The state benefits in number of ways as a result of educating its people
...
e) Poverty reduction
The level of poverty in a society can be eradicated by educating members of a society; this is
because poverty arises as a result of low human capital endowment or labour market
discrimination in absence of this educated people access job in both formal and informal
sectors
...
Non-market Benefits
There are realized as a result of investing in education but unlike market benefits they cannot be
quantified in monetary terms
...
i)
ii)
Private non-market benefits
Social non-market benefits
i) Private Non-market benefit
a) Social economic ability
An educated individual whether employed or jobless is able to acquire an elevated class
simply because of acquired knowledge and skills which other members of society do not
have
...
The same
educational and learning programs that carry a lot of educate individuals are better placed
B
...
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Week 7: Efficiency and Equity in Education
when it comes to the number and type of people they interact with
...
While in the institutions individuals (students) get an opportunity to meet and interact with
people from different parts of the country or the world;
c) Creativity:
Makes individuals more receptive to new ideas
...
People with little or no education may have natural talents
but their creativity is restricted
...
d) Career Choice:
Education widens the range of choice open to individuals when it comes to careers
...
ii
...
The only different in
this category is that they are enjoyed by society and government and not just by individuals
...
Education enlightens the society
their civil rights and qualities that make a good leader
...
c) Reduction in Petty CrimeEducation plays a crucial role in lowering of petty crime in the society
...
d) Fertility Reduction: Studies have revealed that there is inverse relationship between education of women and size
of her family (Schultz, 1993)
...
K
...
S
...
Conclusion
Based on the above benefits individuals and countries are spending huge sums of money in
recurrent and development expenditures
...
Kenya alone gross total allocation to the Ministry of Education increased by 95
...
1
billion in 2002/2003 to Kshs
...
8bilion in 2009/2010 financial year
...
WEEK SIX
COSTS IN EDUCATION
Costs can be defined as the value of the resources that goes into the production of a graduate
...
Indirect costs of education on the other hand can be defined as what the society sacrifices by
assigning resources to education
...
e
...
B
...
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Governments and learning institutions are usually interested in educational costs in order to
forecast the educational expenditure and rarely do they meet costs for decision-making
...
As long as we are interested in
efficient utilization of resources as a social and economic objective, cost will remain important
...
This is only possible when we study educational costs because resources are very scarce
...
ii)
Variable Cots:
These are cots that vary/change with the number of students enrolled, for example water,
food, electricity
...
e
...
AVC
v)
=
Variable Cost
Enrolment
Marginal Costs:
Are the Extra costs that educational institutions incur by admitting one additional student
...
K
...
S
...
Two major types of costs play an important
role in the development of the cost principle
...
When marginal costs are falling then it implies that the school is under-enrolled therefore it
should enroll more students
...
Unit costs
on the other hand are important in decision-making then it means the school is under enrolled
and when the cost is rising then it means the school is over overenrolled
...
K
...
S
...
Region A: The marginal cost curve is below the unit cost students i
...
it is under enrolled
therefore all educational resources both teacher and non-teacher are under-utilized
...
To
address this problem such as school raise enrolment to 40
Region B: Is the point of intersection i
...
the marginal cost equals to the unit cost
...
e
...
An efficiently
run school operates in point B
...
These are advantages that institutions enjoy by having an optimal enrolment where costs are
minimized
...
Institutions in this region are
over enrolled
...
Both teacher and nonteacher resources are over utilized
...
To solve problem of diseconomies of scales ways to minimize cost must be
explored
...
B
...
Wambua & M
...
Ingubu
Moi University - Kitale Campus
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Week 7: Efficiency and Equity in Education
AWEEK SEVEN
EFFICIENCY AND EQUITY IN EDUCATION
EFFICIENCY
Efficiency is a term used to describe the relationship between inputs and outputs
...
Efficiency refers to the
usage of resources in the most optimal way; minimize the cost of operations of educational
institutions and maximizing the output from educational systems using the scarce available
resources
...
It is concerned with output as well as input
...
Types of efficiency
Internal efficiency
B
...
Wambua & M
...
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Moi University - Kitale Campus
Page 38 of
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Week 7: Efficiency and Equity in Education
This refers to the ability of an educational institution (system) to meet its internally defined
goals, for example, good performance in examinations, high graduation rates, low repeater rates,
low dropout rates and high survival rates
...
It is the ability of
the educational system to meet externally set objectives
...
Internal efficiency can also be seen in relation to:
a) Technical efficiency:
This is the quantitative relationship between educational input and output
...
In this case, internal efficiency is a function of physical infrastructure, educational
materials, teaching staff, supervision, organization, management and student flows
(rates)
...
b) Economic efficiency
This focuses on the relationship between educational output and cost of input
...
Economic efficiency compares
B
...
Wambua & M
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Moi University - Kitale Campus
Page 39 of
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Week 7: Efficiency and Equity in Education
costs and benefits of education
...
The objective is to minimise cost and achieve
better results or higher output
...
Economic efficiency considers the concept of effectiveness
...
Cost effectiveness
deals with minimisation of costs
...
These are those goals which can be internally realised
...
Examples of external efficiency
External efficiency refers to the ability of a school to meet its externally designed goals
...
If they are above 0
...
b) Alternatively, one can compare wastage rates
...
10 annually, then the university
is efficiency
...
d) Besides these, qualitative measures such as standardised examinations may be used to
compare the performance of Moi University students and students from other institutions
...
K
...
S
...
This include CBA of the university programmes
f) Conducting tracer studies to determine the rate at which students from Moi University get
absorbed in the labour market
...
THE CONCEPT OF EQUITY
From the economic point of view, equity refers to the way costs and benefits of education of
investments are distributed among different regions or groups in the country
...
It does
not, however imply that all the institutions, or regions or levels should get an equal amount of
resources
...
Four important questions of equity
1
...
What are the effects of government subsidies for education on distribution costs and
benefits and distribution of total income or welfare?
3
...
How effective is education as a redistributive tool?
Types of equity
1
...
Treat every individual or group equally
...
Divide the resources in the country without any favour
...
This, however, is not practical
...
It
is an ideal
...
Vertical equity
This refers to unequal treatment of unequals
...
Groups in the society have unequal needs
...
3
...
K
...
S
...
So the government should ensure that that doesn’t happen
...
Equality is a goal, i
...
trying to remove injustice while equity is fairness
...
Cost sharing
• It is intended to reduce the expenditure in formal education and training to about
30 percent of national recurrent budget;
• Through the use of more cost-effective measures in the utilisation of educational
facilities, equipment, materials and personnel;
• Tertiary education student allowances should be discontinued; boarding and
lodging allowanices should be withdrawn;
• Loans given to students should be efficiently recovered and scholarships should
be given to bright students only or students from poor families
...
Central and local government
• Education is treated as an essential social service which promotes development
and thus deserves public financing
...
3
...
Major objective underlying loans
systems is the need for equity, which is equalisation of educational opportunities
...
• The current way of financing higher education in Kenya is said to be inequitable
and inefficient
...
i
...
Loan scheme would create small university elite;
iii
...
Loan scheme would promote inequity where the poor are taxed to finance
education of those who already have
...
Equity and equality of opportunity for higher education;
ii
...
Supply sufficient funds for university education;
iv
...
Expected higher private rates of return to university graduates
...
K
...
S
...
DISCUSS
...
Socially acceptable and equitable;
ii
...
It is a system of selection and financing that does not discriminate against
students from poor families;
iv
...
Cost of administration and collection of loans is very high in Kenya
...
g
...
2
...
4
...
In education system, efficiency is looked at as under how
well the organisation achieves its shorter term objectives, like gains in academic achievement,
while external efficiency refers to how well the organisation achieves its long term objectives,
for example, good citizens and productive employees
...
In Kenya extensive consideration should be given to the issue of external efficiency, or how the
overall use of money for schooling compares to other potential public and private uses
...
B
...
Wambua & M
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Moi University - Kitale Campus
Page 43 of
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Week 7: Efficiency and Equity in Education
Educated unemployment
Educated unemployment refers to those people who have received some formal education
ranging from primary, secondary and college but are not able to find wage employment
...
The government is faced with change
...
2
...
3
...
4
...
5
...
6
...
Political systems and economic systems-the poor performance of the economy should not
discourage investment in education
...
Investment in education is essential to develop organisational structural capital
...
Education should lead to social cohesion and lead to a pool of social capital in the
country
...
Education has consumption benefits to individuals
...
The educated, depending on the education received may become job creators and not just
seekers
...
With globalisation, those with education may work elsewhere apart from their home
country
...
Open unemployment
This refers to a situation where labour resources are idle
...
2
...
3
...
K
...
S
...
4
...
5
...
6
...
Steps to address unemployment
1
...
Make skills
relevant to rural population
...
Ensure a balance in the development of various sectors
...
Avoid overproduction of certain skills
...
Ensure efficiency in the public sector
...
Put emphasis on non-academic education
...
Provide a good incentive structure to the informal sector
...
There is need for a balanced public expenditure
...
Introduce entrepreneurship education
...
K
...
S