Education in relation to socio economic development

1. Republic of the Philippines
State Universities and Colleges
GUIMARAS STATE COLLEGE
GRADUATE
SCHOOL
Mc Lain, Buenavista, Guimaras
_______________________________________________________________________
EDUC 304- Education and Philippine Socio-Economic Development
Derna F. Bancien Dr. Josephine G. Piodena, Ph.D.
Student Professor
(Summer 2018)
Final Examination
EDUCATION IN RELATION TO SOCIO-ECONOMIC DEVELOPMENT
“The youth is the hope of our future.” - Dr. Jose P. Rizal
Education system plays a major role in development of society and modern
economies. Understanding how education system work and how it evolve over time has
been one of the most important research agendas in recent years. The education system
of any economy performs the following main tasks: first, it handles the basic and higher
education; second, it provides better opportunities of income; third it enhances the living
standard and helps in social development. Education is one of the most important drivers
of social and economic development. Higher levels of literacy lead to greater economic
output, higher employment levels, better health, better social structures, and number of
other development indicators. More specifically, the impact of education has been shown
to result in rapid improvements in family planning, nutrition, health, and income and is
seen as one of the best tools for promoting social and economic development.
Educ 304- Education and Philippine Socio-Economic Development (Summer 2018 -Finals)
Dr. Josephine G. Piodena Ph. D. – Professor
Derna F. Bancien -Student 06/09/2018 Page 1 of 8

2. EDUCATION AND ECONOMIC GROWTH There are two very basic
reasons for expecting to find some link between education and economic growth. First of
all at the most general level it is instinctive reasonable that living standards have risen so
much over the last millennium because of education. Progress of the sort enjoyed was
not observed in the illiterate societies that have gradually merged into the world economy
over the last two hundred years. To the most casual observer it must seem that there is a
link between scientific advance and the way in which education has facilitated the
development of knowledge. People with only very limited education often find it difficult to
function at all in advanced societies. Education is needed for people to benefit from
scientific advance as well as contribute to it. Secondly, at the level of output per hour
worked in a country correctness is depending on the educational attainment of the
population. The process of education can be analysed as an investment decision. Before
very few people had any formal education. Even in 1940 that was still true in some
countries. The spread of formal school seems to have preceded the beginning of modern
economic growth.
Levels of education and levels of GDP per capita in any particular year are
closely related to those in earlier and later years, any conclusions answer the question
whether the high level of GDP is a consequence or a cause of the high level of education.
Educ 304- Education and Philippine Socio-Economic Development (Summer 2018 -Finals)
Dr. Josephine G. Piodena Ph. D. – Professor
Derna F. Bancien -Student 06/09/2018 Page 2 of 8

3. Therefore, public expenditure on education needs to be sustained to ensure
that poor are able to afford. Wages and earnings tend to correlate with the amount of
education a person has obtained. Those workers with less than a high school diploma
earned a median income; while those workers with a four year college degree earned a
higher income. The poverty line for a four-person household; therefore, those with less
education are more likely to be bordering on this line than those with more education.
Higher educational opportunities are necessary in order to pull away from
the poverty line. Of the 30 fastest growing occupations, more than half require an
associates degree or higher. Yet, these jobs are less likely to supply additional jobs to the
labor market; meaning, the majority of job growth is found in low-wage jobs. These low-
wage jobs are associated with those people who have less education. Workers in these
areas are deemed unskilled because it does not require a great amount of education in
order to perform these jobs, so the stereotype goes. White collar jobs, however,
necessitate more human capital and knowledge and therefore produce higher earnings
and require greater education. Higher earnings of people leads to increase in per capita
income hence make a contribution in economic growth.
EDUCATION AND SOCIAL DEVELOPMENT Education builds the man so it
builds the nation. Education and socialisation are at the heart of human society, because
these processes allow for the cultural and social reproduction of any given society despite
Educ 304- Education and Philippine Socio-Economic Development (Summer 2018 -Finals)
Dr. Josephine G. Piodena Ph. D. – Professor
Derna F. Bancien -Student 06/09/2018 Page 3 of 8

4. the passing of generations. Since the 19th century, formal education systems have been
mainly under public control. The development of education in the west has been closely
associated with the central ideas and values of modernity, such as progress, science,
rationality and individualism.
Educational institutions have been central means of promote (idea,
knowledge) widely, and extending the influence of those values worldwide, through
colonisation, for instance. Education is also closely associated with economic
development. In most (perhaps all) countries more educated people have wider, deeper,
stronger social networks and participate more in social, community, and political life.
Social development is a wider concept. It is great effort for “the good society”, for which
the constant enrichment of learning process is an essential and integral element, along
with effective, responsible and willing participation and the achievement of a more
equitable order.
A dynamic of high moral standard binding can be established. A better
society or better social development leads to better education which leads to better social
development and further improvement of educational opportunities and quality, which in
turn improves the prospect of better social development. “Knowledge is vitally important;
but if it is to transform society from a state of relative stagnation to one of dynamism and
progress, there must be a general willingness and determination to make use of the
Educ 304- Education and Philippine Socio-Economic Development (Summer 2018 -Finals)
Dr. Josephine G. Piodena Ph. D. – Professor
Derna F. Bancien -Student 06/09/2018 Page 4 of 8

5. service of the community.” Education is the basic need to bring up the social
development. It makes the foundation of better social life and also helps in creates social
assets, which forms social networking in personal as well as professional life . It is not
that only social development foster by education but also vise-versa and both play a vital
role in economic growth.
The United Nations publishes a Human Development Index every year,
which consists of the Education index, GDP Index and Life Expectancy Index. These
three components measure the educational attainment, GDP per capita and life
expectancy respectively. The Education Index is measured by the adult literacy rate (with
two-thirds weighting) and the combined primary, secondary, and tertiary gross enrollment
ratio (with one-third weighting). The adult literacy rate gives an indication of the ability to
read and write, while the GER gives an indication of the level of education from nursery to
postgraduate education. Education is a major component of well-being and is used in the
measure of economic development and quality of life, which is a key factor determining
whether a country is a developed, developing, or underdeveloped country. All countries
considered to be developed countries possess a minimum score of 0.8 or above,
although the great majorities have a score of 0.9 or above.
Education is an investment
The importance of knowledge and learning has been recognized since the beginning of
Educ 304- Education and Philippine Socio-Economic Development (Summer 2018 -Finals)
Dr. Josephine G. Piodena Ph. D. – Professor
Derna F. Bancien -Student 06/09/2018 Page 5 of 8

6. time. Plato wrote: “If a man neglects education, he walks lame to the end of his life.”
But it was really the Nobel winning economists that put the argument of education as
investment. T.W. Schultz argued that investment in education explains growth and Gary
Becker gave us the Human Capital Theory.
In a nutshell, the Human Capital Theory posts that investing in education has a payoff in
terms of higher wages. Moreover, the theory and empirical estimates are backed up by
current science, as explained by James Heckman.
Neurogenesis tells us that learning can continue into advanced ages. The relative costs
and benefits to investments in older persons compared to younger persons differs.
Investments in more able workers at any age generate higher returns than investments in
less able workers, and ability is formed at early ages.
Education pays
Overall, another year of schooling raises earnings by 10 percent a year. This is typically
more than any other investment an individual could make. The value of human capital –
the share of human capital in total wealth – is 62 percent. That’s four times the value of
produced capital and 15 times the value of natural capital. Globally, we – governments,
private sector, families, individuals – spend more than many million a year on education
and training. Countries spend 5 percent of GDP on education or 20 percent of their
national budget. Education employs about five percent of the labor force.
Educ 304- Education and Philippine Socio-Economic Development (Summer 2018 -Finals)
Dr. Josephine G. Piodena Ph. D. – Professor
Derna F. Bancien -Student 06/09/2018 Page 6 of 8

7. Moreover, private returns to schooling – what individuals receive in the labor market –
have been increasing. The big change recently has been that the returns to tertiary
education are now highest.
Skills demanded by the labor market are changing
One of the reasons for the change in the returns pattern is the race between technology
and education, as labor markets adjust to automation. In this new world, the ability of
workers to compete is handicapped by the poor performance of education systems in
most developing countries. Technological change and global competition demand the
mastery of competencies and the acquisition of new skills for many.
Countries can compete- and succeed
To promote success in today’s labor market, one needs to invest early, and then invest in
the relevant skills. Above all, countries need to invest smartly, by promoting attention to
the 3 A’s: Autonomy, Accountability, Assessment. They need to pay attention to teachers,
early childhood development and culture. How to Succeed in the Labor Market? (You
don’t necessarily get these skills from traditional vocational system) but to invest in
Relevant Skill as follows: 1. Problem-solving skills 2. Learning skills 3. Communication
skills 4. Personal skills for self-management and 5. Social skills.
It’s important to focus on results
Education systems that do well prepare children early on, reform continuously, and use
Educ 304- Education and Philippine Socio-Economic Development (Summer 2018 -Finals)
Dr. Josephine G. Piodena Ph. D. – Professor
Derna F. Bancien -Student 06/09/2018 Page 7 of 8

8. information for improvement and accountability. Information for accountability works, as
do high stakes assessment; but so do low stakes assessments. Either way, test-based
accountability is cost-effective. "Even if accountability costs were 10 times as large as
they are, they would still not amount to 1 percent of the cost of public education"
Expand opportunities but pay attention to equity
Countries need to improve quality, strive for excellence, and expand opportunities, based
on efficiency and equity. This means ensuring that disadvantaged youth enroll and
succeed. While the returns to schooling are high on average, results vary. There must be
better information for such student who don’t perform well and greater support networks
to help them take on the challenges of completing their tertiary level education. More
information will also benefit students and families from disadvantaged backgrounds, who
tend to overestimate benefits and underestimate costs. Education is truly one of the most
powerful instruments for reducing poverty and inequality and it sets the foundation for
sustained economic growth. Let’s start investing in it more.
Intellectual property is a key aspect for economic development. Craig Venter
Educ 304- Education and Philippine Socio-Economic Development (Summer 2018 -Finals)
Dr. Josephine G. Piodena Ph. D. – Professor
Derna F. Bancien -Student 06/09/2018 Page 8 of 8