• About

Economics for India

~ Research & Reflections on Indian Economy

Economics for India

Category Archives: education

PISA Scores and Human Capital in India

04 Wednesday Dec 2013

Posted by paragwaknis in economic reforms, education, growth, socioeconomic perspectives, Uncategorized

≈ Leave a comment

Tags

Gustavo Ventura, Human Capital in India, India, Labor Quality, PISA, PISA scores India, Pratham, Schooling in India

I came across this interesting paper by Gustavo Ventura and his coauthors titled “Talent, Labor Quality, and Economic Development” in which they use PISA scores as a measure of quality of labor. They show that there are huge differences between labor quality between rich and poor countries based on these scores and they could explain some of the income differences across the world. Developed countries like the US, Canada and Western Europe have been investing in education for the past 200-300 years. The dividends that are being reaped now are because of this huge investment. Unfortunately, India does not figure into the analysis because we have shied away from taking the test. Only two states, Tamil Nadu and Himachal Pradesh, volunteered and the results are not at all encouraging. You can find some analysis here, here and here.

Employers in India have been lamenting about quality of human capital for a while now. There is an urgent need of reform starting from schooling to address such concerns effectively. Of course there are Indian kids who could surpass the rich country kids in these tests- all the ones who would eventually go to IIMs, IITs, and other elite educational institutions in India for example could do that. Students who come from educated families in general will be also in this list. But all said and done this is still a tiny winy percentage of the population. To reap the demographic dividend for economic growth, skill improvement needs to happen at much broader level than that. One could also argue that PISA tests does not really measure skills. Pratham has been conducting its own tests and the results are not very different!

How are we going to do this? Poor infrastructure, Teacher absenteeism,  and quality are some of the major problems at all levels of education in India. Some of it would need more investment but a lot could be achieved if incentive structures are changed to motivate the stakeholders to improve outcomes. For example, curriculum and school calendars may have to be revised to meet the local constraints and maximize attendance and learning. Research shows that poor quality of schooling reflects on performance in higher education and eventually the job market outcomes. This provides additional rationale for improvement of schooling across the board.

As we are on the topic of unused capacity and perverse incentives it has to be noted that this problem is not only limited to schooling. I know colleges in Pune, India where the classrooms are empty while students pay through their nose for coaching classes. The quality of education provided is overall abysmal. In order to get as many students through the college system as possible, there has been significant dilution of syllabus for almost all the courses through out. Centralized and standardized examination system has only made matters worse. It has taken away the agency from college teachers- no wonder there is huge apathy towards increased effort.

Moral of the story: education in India needs reform! This is one area where government spending and investment could really make a difference. The story about India’s PISA scores only underscores the dangers of continued neglect of such impetus to education.

Education and Growth

20 Thursday Nov 2008

Posted by paragwaknis in education, growth

≈ 2 Comments

Peter Lindert argues that there is a relationship between democracy and economic growth. However, very few studies confirm this link empirically. One of the reasons why this is the case is that they do not specify the political process in enough details. The nature of policies that will be chosen and implemented in equilibrium will depend on whether voters have ‘voice’ or not. If voters have voice then government will spend more on public goods that benefit masses rather than elites. Does having a democracy or extensive franchise ensure that voters will have voice? Not necessarily.

Let us measure the elitist bias in government spending policies. If voters have voice then the government will spend more schools than on higher education and we will find the proportion of spending on schools in total spending higher relative to a situation where voters do not have voice. Thus, higher voice means more spending on primary education and hence lower elitist bias. How do various democracies fare on this count? All the economically successful democracies spend significant portion of their education expenditure on primary education than higher education. This signifies lower elitist bias and hence better human capital and hence growth. What is the catch? Yes, you got it right-its India.

India is the biggest but also poorest democracies in the world. It turns out that among million reasons why India is poor, the elitist bias in its spending policies infact might be a significant one. We have an impressive list of higher education institutions but our primary schools remain of abysmal quality and quantity. As a result we have some 200 million people with access to somewhat decent higher education but remaining 800 million or so have to survive on schools with one class room and absent teachers!

Lindert argues that even though India is a full fledged democracy by all standards, its voters do not have voice or voice is distributed more unequally than votes. So while other economically successful democracies got it right in terms of primary education, India lags behind because of a massive illiterate and undereducated human pool. So whats the moral of the story? Massively expand and improve schooling in India.

This is important because all other policies of ensuring equal access do not work or work only in the limited sense if basic education is not right. For example in a recent article in EPW, Chakravarty and Somananthan found that SC/ST students earn significantly lower wages in IIMA’s placements. However, the difference between the wages of SC/ST and open category candidates vanishes once controlled for the GPA. Thus, the wage differentials account for differences in human capital endowments of the SC/ST versus the open category students. These inequalitties in endowments can be taken care of only if all the castes have access to quality education and a way to do that is to spend more on schools than on universities and colleges.

Chakravarty S and S Somanathan (2008), Discrimination in an Elite Labor Market? Job Placements at IIM-Ahmedabad, Economic and Political Weekly, November 1.

Lindert P (2003), Voice and Growth: Was Churchill Right?, The Journal of Economic History, 63, 2, 315-350.

Returns to Education in India

06 Wednesday Aug 2008

Posted by paragwaknis in education, socioeconomic perspectives

≈ 1 Comment

This paper studies the determinants of personal income, including the returns to education. In the process it estimates how incomes are affected by characteristics such as gender, caste, language, etc. Using a maximum likelihood probability model, private returns to education are estimated; it emerges that greater levels of education increase both the likelihood of being employed as well as the income earned from work. However, the returns from elementary (primary and middle) education are quite low. Also, ceteris paribus, women, lower social groups, rural residents, non-English speakers have both significantly lower incomes and a lower likelihood of being employed. The results indicate that quality of education delivery and ensuring that the child remains in school should form important elements of education policy.

Bhandari L, Bordoloi M (2006), Income Differentials and Returns to Education, Economic and Political Weekly, VOL 41 No. 36 September 09 – September 15.

Education and Growth

18 Friday Jul 2008

Posted by paragwaknis in education, growth

≈ Leave a comment

Tags

democracy and growth, peter lindert

The relationship between education growth and economic growth is a bit puzzling. More education does seem to benefit the individual, but it may not necessarily translate into increasing per capita incomes. So how do we resolve this micro-macro paradox?

As William Easterly argues in his book The Elusive Quest for Growth, its all about incentives. And so do in a way, Playforth & Schündeln who have worked with Indian data. They think that government is the culprit!

They hypothesize that educated people find privately rewarding jobs (which would contribute to the high estimates of returns to education at the micro level) in a sector in which social returns are low relative to the private returns (which would contribute to small or negative coefficients
on education growth in regressions at the macro level), namely the government sector.

Private versus Social Returns to Human Capital: Education and Economic Growth in India by John Playforth & Matthias Schündeln.

Affirmative Action in Education

23 Wednesday Apr 2008

Posted by paragwaknis in affirmative action, education, socioeconomic perspectives

≈ 4 Comments

Abstract:

Many countries mandate affirmative action in university admissions for traditionally disadvantaged groups. Little is known about either the efficacy or costs of these programs. This paper examines affirmative action in engineering colleges in India for “lower-caste” groups. We find that it successfully targets the financially disadvantaged: the marginal upper-caste applicant comes from a more advantaged background than the marginal lower-caste applicant who displaces him. Despite much lower entrance exam scores, the marginal lower-caste entrant does benefit: we find a strong, positive economic return to admission. These findings contradict common arguments against affirmative action: that it is only relevant for richer lower-caste members, or that those who are admitted are too unprepared to benefit from the education. However, these benefits come at a cost. Our point estimates suggest that the marginal upper-caste entrant enjoys nearly twice the earnings level gain as the marginal lower-caste entrant. This finding illustrates the program’s redistributive nature: it benefits the poor, but costs resources in absolute terms. One reason for this lower level gain is that a smaller fraction of lower-caste admits end up employed in engineering or advanced technical jobs. Finally, we find no evidence that the marginal upper-caste applicant who is rejected due to the policy ends up with more negative attitudes towards lower castes or towards affirmative action programs. On the other hand, there is some weak evidence that the marginal lower-caste admits become stronger supporters of affirmative action programs.

Reference:

Bertrand M, Hanna R, & Mullainathan S (2008), Affirmative Action in Education: Evidence From Engineering College Admissions in India, NBER Working Paper 13926.

Enter your email address to follow this blog and receive notifications of new posts by email.

Join 864 other followers

Follow me on Twitter

My Tweets

Blogroll

  • Ajay Shah's blog
  • EconAcademics blog aggregator
  • Musings of the Sorts!

Links on Indian Economy

  • An Alternative View of India's Economic Policies
  • Business Cycles in India
  • Centre for Monitoring Indian Economy
  • Economic and Political Weekly
  • eSocialSciences
  • FT's India Page
  • Ideas for India
  • IGIDR Finance Group
  • India at LSE
  • India Knowledge@Wharton
  • India Macroeconomics Annual
  • India Policy Forum
  • Indian data at FRED
  • Indian Economc Review
  • Indian Economic & Social History Review
  • LSE: EOPP Indian State Data
  • National Institute of Public Finance and Policy
  • NIPFP Macro-Finance Group
  • Parliament Research Services
  • People's Archive of Rural India
  • Reserve Bank of India
  • The Economist's India Page

Categories

  • affirmative action
  • Agrarian Issues
  • book review
  • business cycles
  • comparative development
  • diverse perspectives
  • economic history
  • economic reforms
  • economics and governance
  • education
  • Financial Crisis
  • growth
  • inflation
  • Infrastructure
  • legal reforms
  • macroeconomics
  • monetary policy
  • policy
  • politcal economy
  • politics
  • public policy
  • RBI
  • regional imbalance
  • socioeconomic perspectives
  • Uncategorized
  • Unemployment
  • voting behavior

Archives

  • June 2017
  • April 2017
  • November 2016
  • September 2016
  • July 2016
  • June 2016
  • November 2014
  • May 2014
  • March 2014
  • January 2014
  • December 2013
  • November 2013
  • September 2013
  • August 2013
  • April 2013
  • February 2013
  • October 2012
  • September 2012
  • July 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • June 2011
  • April 2011
  • February 2011
  • January 2011
  • October 2010
  • August 2010
  • March 2010
  • December 2009
  • November 2009
  • October 2009
  • September 2009
  • August 2009
  • July 2009
  • February 2009
  • December 2008
  • November 2008
  • August 2008
  • July 2008
  • April 2008
  • March 2008
  • January 2008

Goodreads

Top Clicks

  • None

Meta

  • Register
  • Log in
  • Entries feed
  • Comments feed
  • WordPress.com

Blog at WordPress.com.

Privacy & Cookies: This site uses cookies. By continuing to use this website, you agree to their use.
To find out more, including how to control cookies, see here: Cookie Policy