Transcript Offre et demande d`éducation : quelle régulation

Demand and Supply in Education
Analysis of behaviors, principles of
regulation
By Mamadou Bassirou TOURE
EMIS Specialist
For:
Sherif Yunus Hydara
Project Manager
Projects Coordination Unit (PCU)
Ministry of Basic & Secondary
Education (MoBSE)
Education Economics Reference:
Choice of a Reference Paradigm
• Why do we use the economic theories ?
• Empirical framework: stimulate the research for
explanations for the phenomena studied
• Making behavior "predictable" compared to variations of
objective parameters
• Forecasts and comparisons made ​with reliable data
• Evaluate “thoroughly" the relevance of alternative
explanations
Economic analysis of the Demand for Education
• Economic theories of education
Education = consumption (preferences, cost, budget)
Education = investment (profitability)
• Education and Growth (early work)
• Education and market productivity
• Education and non-market productivity (health, behavior in
society, ...)
• Beginning of the human capital theory and formalization of
the economic analysis of the demand for education
The Human Capital Theory (1)
• The formal analogy with the investment: Education is an investment
that an individual makes to himself in the perspective of future profits
• Education costs (direct cost, opportunity cost)
• Education provides a sustainable flow of benefits (market and
nonmarket)
• Comparing the present value of costs and benefits defines a rate of
return (r)
Σt=0 à n (Bt – Ct)/(1+r)t = 0
Comparison of r for various alternative investments
Rational Choice
Profils « Age-Gains » For 2 Qualifications
Gains
BA
WASSCE/
A Level
18
21
60
Age
Human Capital Theory (2)
• The limits of the analogy to physical capital:
Human capital is built in the person
– Mobile and non-owned (private)
– Dark (reporting strategy, titles, ...)
• Varied in its nature
– Specific versus general human capital
• These characteristics determine the financing of
human capital
The forecasts of the Human capital theory
• The return on investment in education is higher when
children enroll as early
• Marginal Return on investment in education is decreasing
(increasing opportunity cost, low perceiving benefit period)
• People prefer the sectors where the return on investment in
education is highest
• Diversification of the demand for Education is function of
individual and contextual parameters that affect return on
investment in education
• Urban versus rural
• Richest and / or most suited likely invest more than others
The Findings
• The return on investment in education is positive and is
comparable to that of capital investment
• The marginal decrease of return on investment in
education is verified
• On average the choice is for sectors where the return is
highest
Rate of Return of Education : Average by region
Psacharopoulos 1993
Psacharopoulos 2002
Average
Number of
Schooling
Years
Private rate
of Return
Average
Number of
Schooling
Years
Private rate
of Return
Africa
5.9
13.4
7.3
11.7
Latin America
7.9
12.4
8.2
12.0
Asia
8.4
9.6
8.4
9.9
Europe, MENA
8.5
8.2
8.8
7.1
OCDE
10.9
6.8
9.0
7.5
World
8.4
10.1
8.3
9.7
Private and Social Rate of return in Education (%)
Primary
Secondary
Tertiary
Private
Social
Private
Social
Private
Social
Afrique
37.6
25.4
24.6
18.4
27.8
11.3
Amérique Latine
26.6
17.4
17.0
12.9
19.5
12.3
Asie
20.0
16.2
15.8
11.1
18.2
11.0
Europe, MENA
13.8
15.6
13.6
9.7
18.8
9.9
OCDE
13.4
8.5
11.3
9.4
11.6
8.5
Limitations : the quality of the data, externalities
Observations Against the Human Capital Theory
• Demand for education supported for sectors where the return
on investment in education is low (eg "maîtrisards“)
• Likely reasons/Possible causes:
• Rigidity of the supply side
• Alteration of the parameters (Education subventions, Statutory
or other financial benefits)
• Modulation of the cost (Endogenisation)
• Alternative theories: filter, signal, queue ...
Alternative Theories to the Human Capital Theory
Human Capital
Education
productivity
salary
Signal / Filter
productivity
Education
salary
•
The paradigm shift does not alter the theoretical forecast at the
individual level
•
The changes are more important at the collective level and affect
in particular the regulation of the sector
Role of education demand in regulation of the market
• In principle through "natural" regulation, students should
desert the sectors where the return on investment in education
is lowest. Convergence individual and collective interests
• However there are many limitations to this natural regulation
(filter, queue, ...)
• The rate of return on investment in education sometimes differs
from the social rate of return (collective). Durable Imbalance,
vicious cycle of "race for certificates“
• Lack of regulation by the Demand Side
• Adjustments by the supply side(funding opportunities)
The Supply and Financing of Education
• Education: Private good but overall economic effect and
externalities are well considered when measuring the social
returns on investment in education
• Justification for public financing of education
– Direct Social Returns on Investment in Education
– Maximization of Positive Externalities
– Likely weaknesses of a management system based mainly on profit
making
• The Social Returns and Externalities differ depending on the
level and type of education. The provision of funding for public
education should be adjusted accordingly
Collective efficiency of Education
• Education and Salary
– Human capital theory
– Theory (ies) of the filter
• Education productivity and market
– Direct analysis in the context of independent activities
• Allocative efficiency
• Technical efficiency
• Education and Growth
– Education a growth "factor" (direct or via the Technical Progress)
– Education at the origin of adaptive behavior (in a changing environment)
• Education and non-market productivity
Measuring the Effetcs of Indepenent Activities on Education
• Estimate of the production functions at the
microeconomic level
– Estimate of the impact of education on income (production)
• Efficient Allocation
• Technical Efficiency
– Positive effects of education (On average production increased by
8% for 4 years of school / no schooling) but ...
• Disparities
• Effects are significantly more important in the context of
modernization
Measuring the Effects of Education in Independent Activities
Positif
Significant Effect
Others
(ns)
Asia (31)
19
12
Latine América (23)
5
18
Africa (3)
0
3
Europe (2)
2
0
Total (59)
26
33
Contrasted results, highlighting the impact of the context
Education in the Growth Models
• Neoclassical models
Growth = f (Capital, Labor, ...)
- Education and factor productivity
- Flows Measurements
- Stocks Measurements
(Monitor the evolution of the stock of capital and labor)
 Positive effects of education on growth
 Strong disparities and sometimes contradictory results according to
the methods of estimate (in particular stock vs flow)
 What is the effect of different levels and types of education?
Per Capita GDP Growth in 1965 and 1985
(56 Countries’ per capita GDP<US $ 2000 in 1993)
Mingat/Suchaut 2000
Model 1
Schooling time in 1965
Primary GER 1965
Africa Primary GER 1965
Outside Africa Primary GER 1965
Secondary GER 1965
Tertiary GER 1965
Africa and other continents
0,143***
R² en%
37
Model 2
0,021***
Model 3
Model 4
0,022***
0,010*
0,033**
0,007 ns
-0,015ns
-0,01ns
-0,02ns
-0,73***
42
44
50
Per Capita GDP Growth between 1975 et 1992 (23 african
countries/JP Lachaud)
GDP in1975
Population Growth Rate
Investment Rate/GDP
-0.015**
-0.64 ***
0.60 ***
Primary Intake Rate
0.076*
Price Indexes Variation Rate
Public Expenditures/GDP
Increase Terms of Trade
Variation of the index of food production / head
Increase in export volumes
R² in%
-0.010ns
-0.117***
0.065***
0.092***
0.028**
60.8
The endogenous growth models
-
The endogenous growth models
-
Education and growth of technical progress
Role in the level of education than the stock or its growth
Investment in R & D
Ability to adapt to technological change
 Positive effect of education on growth
 Effect differentiated innovation / upgrading
 Effect relating to the quality of education
 Conditional role of education, according to the evolution of
technology, the environment and the nature of national institutions
Education and Equity
• Improving Access
• Ownership of public resources
• Private financing and equity
• Regulation between extremes
– Signal and its consequences
– Inequalities created by growth (especially if they come from adaptive
behavior that education can provide)
– Inequalities related to private financing of education
Regulatory elements relatively sparse despite
numerous research undertaken
•
Recognized and proven role of education on individual earnings and
growth
•
Effectiveness of primary education in Africa .... but beyond?
•
“Environmental" dimensions should not be neglected (introduction of
new technologies, investments)
•
Role of quality education
•
Promising new growth theories (adapted institutions, level of
education more effective remediation, technological adaptation and
innovation)
•
A very pragmatic approach to regulation, which takes into account the
possible market signals, promotes quality and harmonious sector
regulation
Teaching economic theories of education
•
Returns to education are high (usually> those of physical capital)
•
Private returns decrease when the level of education rises
•
For given level of education, private returns decrease with the increase
of the level of development
•
Social returns follow the same trends and remain high (although they
neglect the possible externalities)
 Results justify an investment in important public primary education for
developing countries
 Collective investment funding from other levels and types of education
must be flexible and modulated (efficiency / equity)
 Favor a pragmatic approach in defining the quantity and quality needs
of the market
 Modulation of private and public funding
The End
Thanks