This document discusses theories of economic development including the Big Push theory and Leibenstein's critical minimum effort theory. The Big Push theory proposes that a large, comprehensive investment package is needed to spur development and realize economies of scale. Leibenstein's theory argues that underdeveloped countries are trapped in a cycle of poverty and need a critical minimum level of stimulus to increase incomes and break out of this cycle into self-sustaining growth. However, both theories have been criticized for oversimplifying relationships and neglecting key factors such as agriculture, population growth, and institutional realities in underdeveloped nations.
The document discusses the autonomy of the Reserve Bank of India (RBI). It makes three key points:
1) There has been ongoing debate about the RBI's autonomy following the Indian government's decision to demonetize high-value currency notes in 2016. Some saw this as infringing on the RBI's independence.
2) The RBI has three main autonomous roles: ensuring low inflation, managing government debt, and regulating the banking system. However, as the owner of public sector banks, the government also plays a role in banking.
3) While some have criticized perceived encroachment on the RBI's autonomy, the document argues the RBI's autonomy has not been undermined
The document discusses different measures used to quantify poverty, including the headcount index, poverty gap index, and Sen index. The headcount index measures the proportion of people living below the poverty line. The poverty gap index incorporates the depth of people's poverty by measuring the average distance below the poverty line. However, both indices do not account for inequality among the poor. The Sen index seeks to address this by factoring in the Gini coefficient for inequality within the poor population.
The document provides an overview of the money supply process involving three key players: the central bank (Federal Reserve), commercial banks, and depositors. It discusses how the Federal Reserve uses open market operations and changes in reserve requirements to influence the monetary base and money supply. It also introduces the money multiplier concept to illustrate how the money supply is multiplied from the original monetary base through the deposit creation process in the banking system.
This document discusses various topics related to public finance and taxation, including:
- Pure public goods and their key characteristics of non-rivalry and non-excludability. Public universities are given as an example.
- Definitions of budget, surplus budget, balanced budget, and deficit budget. Budgets are periodic estimates of revenue and expenses.
- Planning, programming, and budgeting system (PPBS), which is a formal, cyclic process for policy and strategy decision making involving planning, programming, and budgeting phases. It aims to assess costs and benefits of alternative programs.
- Incidence of taxation, referring to who ultimately bears the burden of a tax. Various factors like elasticity
This document discusses how banks create money through fractional reserve banking. It begins by explaining how goldsmiths in the 16th century issued receipts for gold deposits, which became used as money and allowed the goldsmiths to loan out more gold than they had in reserves. This established the concept of fractional reserve banking. It then discusses the functions of modern banks, including how they act as intermediaries between depositors and borrowers. The document also covers bank regulation implemented after the 1930s crisis, including deposit insurance, capital requirements, and reserve requirements, which help prevent bank runs.
This document discusses theories of economic development including the Big Push theory and Leibenstein's critical minimum effort theory. The Big Push theory proposes that a large, comprehensive investment package is needed to spur development and realize economies of scale. Leibenstein's theory argues that underdeveloped countries are trapped in a cycle of poverty and need a critical minimum level of stimulus to increase incomes and break out of this cycle into self-sustaining growth. However, both theories have been criticized for oversimplifying relationships and neglecting key factors such as agriculture, population growth, and institutional realities in underdeveloped nations.
The document discusses the autonomy of the Reserve Bank of India (RBI). It makes three key points:
1) There has been ongoing debate about the RBI's autonomy following the Indian government's decision to demonetize high-value currency notes in 2016. Some saw this as infringing on the RBI's independence.
2) The RBI has three main autonomous roles: ensuring low inflation, managing government debt, and regulating the banking system. However, as the owner of public sector banks, the government also plays a role in banking.
3) While some have criticized perceived encroachment on the RBI's autonomy, the document argues the RBI's autonomy has not been undermined
The document discusses different measures used to quantify poverty, including the headcount index, poverty gap index, and Sen index. The headcount index measures the proportion of people living below the poverty line. The poverty gap index incorporates the depth of people's poverty by measuring the average distance below the poverty line. However, both indices do not account for inequality among the poor. The Sen index seeks to address this by factoring in the Gini coefficient for inequality within the poor population.
The document provides an overview of the money supply process involving three key players: the central bank (Federal Reserve), commercial banks, and depositors. It discusses how the Federal Reserve uses open market operations and changes in reserve requirements to influence the monetary base and money supply. It also introduces the money multiplier concept to illustrate how the money supply is multiplied from the original monetary base through the deposit creation process in the banking system.
This document discusses various topics related to public finance and taxation, including:
- Pure public goods and their key characteristics of non-rivalry and non-excludability. Public universities are given as an example.
- Definitions of budget, surplus budget, balanced budget, and deficit budget. Budgets are periodic estimates of revenue and expenses.
- Planning, programming, and budgeting system (PPBS), which is a formal, cyclic process for policy and strategy decision making involving planning, programming, and budgeting phases. It aims to assess costs and benefits of alternative programs.
- Incidence of taxation, referring to who ultimately bears the burden of a tax. Various factors like elasticity
This document discusses how banks create money through fractional reserve banking. It begins by explaining how goldsmiths in the 16th century issued receipts for gold deposits, which became used as money and allowed the goldsmiths to loan out more gold than they had in reserves. This established the concept of fractional reserve banking. It then discusses the functions of modern banks, including how they act as intermediaries between depositors and borrowers. The document also covers bank regulation implemented after the 1930s crisis, including deposit insurance, capital requirements, and reserve requirements, which help prevent bank runs.
The document discusses the Phillips curve, which shows the relationship between unemployment and inflation. It describes how Alban Phillips first observed an inverse relationship between wage growth and unemployment rates in Britain. Many economists then concluded there is a negative short-run relationship between unemployment and inflation rates, known as the short-run Phillips curve. However, changes in expected inflation rates can shift this curve. In the long run, policies aimed at reducing unemployment below the natural rate of unemployment lead to accelerating inflation.
This document discusses parallel or black economies. It defines parallel economies as unreported economic activities and explains how they pose threats such as loss of government revenue and incorrect GDP estimations. The document outlines effects of parallel economies like unequal income and wealth distribution and corruption. It then discusses measures governments can take to reduce parallel economies, such as voluntary disclosure schemes, privatization, and international cooperation on foreign black money holdings. Major tax evasion scams in India are also listed with estimated amounts. The conclusion estimates India has the highest amount of black money globally at $1,456 billion.
This document summarizes key aspects of the Phillips curve and debates around inflation theories. It discusses how Samuelson and Solow popularized the Phillips curve as a policy tool showing a tradeoff between inflation and unemployment. However, their interpretation led policymakers in the 1960s-1970s to pursue expansionary policies, fueling the Great Inflation. Later analysis found Samuelson and Solow did not actually estimate the Phillips curve relationship but drew it by hand, and a proper estimation shows a different relationship with implications for economic policy.
Federalism and issues of centrally sponsored schemesAbdul
This document discusses issues related to Centrally Sponsored Schemes (CSS) in India. CSS are schemes implemented by state governments but largely funded by the central government. The document outlines 10 key issues with CSS: 1) they lack local knowledge, 2) have poor coordination with states, 3) are unnecessary given states' current capacities, 4) uniform guidelines reduce state autonomy, 5) proliferation reduces states' fiscal capacity, 6) funding is uncertain, 7) matching requirements disadvantage poor states, 8) schemes are inflexible to local needs, 9) there are too many thinly funded schemes, and 10) states lack qualified staff for implementation.
Public finance chapter 7, difference between public finance and private finance, Principle of Maximum Social Advantage, Canons of Taxation, Types of Tax, Direct and Indirect Tax, Specific and Ad veloram tax,
The document summarizes key concepts from macroeconomic growth models including the Harrod-Domar, Solow-Swan, and endogenous growth models. It discusses the Harrod-Domar model which relates an economy's growth rate to its capital stock and savings ratio. It then summarizes the Solow-Swan model which incorporates technological progress and assumes diminishing returns to capital. The model predicts economies will eventually reach a steady state level of capital and output. Finally, it briefly mentions endogenous growth models which seek to explain technological progress.
Public Finance by Harvey S. Rosen and Ted GayerMinLwinThein
This document summarizes answers to discussion questions from a chapter on public finance. It discusses different views of the role of government and challenges with using empirical analysis to determine the effects of policies. Specifically:
- Libertarians believe in limited government while social democrats see a role for intervention, and those with an organic view see the state's goals as most important.
- It is difficult to determine cause-and-effect from observational data, as factors like self-selection can bias results. Randomized experiments help address this but also have limitations.
- When analyzing the size of government, one must consider spending at all levels of government as well as regulatory activity over time to get a full picture.
Kaldor and Hicks developed the compensation principle to evaluate changes in social welfare resulting from economic changes that help some and harm others. Their principle states that if those who gain can compensate the losers and still be better off, the change increases social welfare. They used utility possibility curves to illustrate this, showing how compensation could move individuals to a higher indifference curve. Their theory was criticized for requiring interpersonal utility comparisons and assuming compensation actually occurs.
Tax incidence and it’s effect on supplyChhavi Dudeja
The document discusses tax incidence and how the burden of taxes shifts between sellers and consumers. It explains that when a tax is imposed on cigarettes, the initial burden falls on the seller but they can shift it to consumers by raising prices. Whether the tax burden ultimately falls more on sellers or consumers depends on the elasticity of supply and demand - the more inelastic side bears more of the tax burden. Specifically, if supply is elastic then sellers are sensitive to price changes and consumers will end up paying the tax through higher prices.
1) Autocorrelation refers to correlation between members of a time series or cross-sectional data set ordered by time or space.
2) In a time series, successive errors are often correlated, violating the assumption of independent errors in a linear regression model.
3) Autocorrelation occurs when there is correlation between a variable and its own past or lagged values, while serial correlation refers to correlation between two different time series.
The document discusses the theory of unbalanced growth as proposed by economists like Hirschman and Rostow. The key points are:
1. The theory argues for prioritizing investment in strategic sectors rather than all sectors simultaneously due to scarce resources in developing countries.
2. Investment in priority sectors will stimulate growth in other sectors through "linkage effects" as costs decrease and demand increases.
3. Hirschman classified investments as either social overhead capital (infrastructure) or direct productive activities (agriculture, industry) and argued the two cannot be expanded simultaneously so one sector should be prioritized initially.
Laffer Curve is the diagrammatic representation of the relationship between tax rates and the revenue generated from each tax rate. It is based on the premise that as there is a rise in tax rate, lower is the level of the activity undertaken and thus lower the resulting tax revenue generated from the given tax rate. Copy the link given below and paste it in new browser window to get more information on Laffer Curve:- http://www.transtutors.com/homework-help/economics/laffer-curve.aspx
This document discusses heteroscedasticity, which occurs when the error variance is not constant. It provides examples of when the variance of errors may change, such as with income level or outliers. Graphical methods are presented for detecting heteroscedasticity by examining patterns in residual plots. Formal tests are also described, including the Park test which regresses the log of the squared residuals on explanatory variables, and the Glejser test which regresses the absolute value of residuals on variables related to the error variance. Detection of heteroscedasticity is important as it violates assumptions of the classical linear regression model.
The document discusses key concepts and principles of economic development. It defines development as a multi-dimensional process involving not just economic growth but also social, institutional and cultural changes that improve living standards. Several metrics are used to measure development, including GDP per capita, human development index, health and education indicators. Common characteristics of developing countries are identified such as low living standards, income inequality, poverty, dependence on agriculture and lack of industrialization. Theories of development and classifications of countries by institutions like the UN and World Bank are also outlined.
MEANING
MEANING
DEFINITION
CLASSIFICATION OF PUBLIC EXPENDITURE
CAUSES FOR THE GROWTH OF PUBLIC EXPENDITURE
MEANING
DEFINITION
CLASSIFICATION OF PUBLIC EXPENDITURE
CAUSES FOR THE GROWTH OF PUBLIC EXPENDITURE
Liability-side liquidity risk arises when a financial institution's (FI's) depositors withdraw funds immediately. This can be addressed through purchased liquidity management, where the FI borrows funds, or stored liquidity management, where it sells assets. Asset-side liquidity risk occurs when borrowers draw on loan commitments, requiring the FI to fund new loans immediately using similar approaches. Overall, purchased liquidity allows an FI to maintain its asset size but at a higher funding cost, while stored liquidity contracts both sides of the balance sheet but avoids new interest costs.
The Federal Reserve took several steps to address the US credit crisis, including establishing new lending facilities to provide banks with liquidity and lower interest rates. The Term Auction Facility, Term Securities Lending Facility, Primary Dealer Credit Facility, and Commercial Paper Funding Facility allowed banks and dealers to borrow directly from the Fed. The Fed also lowered interest rate targets and expanded currency swaps with other central banks to ease global credit. However, the responses failed to prevent high inflation and a weaker dollar, and may have increased moral hazard risk.
This document provides an overview of two-variable regression analysis and the concept of the population regression function. It discusses how regression analysis is used to estimate the mean value of the dependent variable based on the independent variable. It introduces a hypothetical example using family income and consumption expenditure data. It defines key concepts like the population regression line and function, and explains how the regression model specifies the dependent variable as a linear function of the independent variables plus a stochastic disturbance term to account for omitted variables.
This document discusses alternative delivery methods for public goods. It begins by defining public goods and categorizing them as pure or impure. Pure public goods are non-rival and non-excludable, while impure goods include club goods, common pool goods, and merit/demerit goods. The document then examines various arrangements for providing different types of public goods, including government production, contracting with private firms, franchising, leasing, and user charges. It concludes by presenting a table assessing the suitability of delivery methods for each public good category.
The document discusses economic structural changes that occur during development. It defines structural changes as long-term shifts in the composition of economic sectors, such as the rise of manufacturing and services and decline of agriculture and industry over time. Countries experience rapid structural transformation as they industrialize, exemplified by many developing nations in Asia and Latin America that grew their manufacturing sectors. However, structural changes differ across countries depending on factors like endowments and history. More recently, the service sector has become dominant globally as the role of agriculture and manufacturing declines.
Development economics (: Development Economics II)-2.pptxTesfayeBiruAsefa
Human capital refers to investments in people such as education and health that increase productivity. Education and health are important for development as they expand human capabilities and are inputs to economic growth. While literacy and life expectancy have increased globally, developing countries still face challenges in improving education and health access and distribution. Income alone is not sufficient to drive improvements in human capital, as families may spend additional funds on empty calories rather than nutrition. Coordinated strategies are needed to simultaneously increase incomes, education, and health.
The document discusses the importance of investing in early childhood development (ECD) to meet UN Sustainable Development Goal 4 of ensuring inclusive, equitable quality education. It notes that over 200 million young children are not reaching their developmental potential due to factors like poverty and lack of nutrition and quality care. Investing in the foundational aspects of ECD like early learning, nutrition and responsive parenting can transform children's lives and have high economic returns. The UN's new SDGs set targets to expand access to quality ECD programs and reduce childhood malnutrition by 2025 and 2030. Upcoming reports on scaling up ECD services are expected to provide new data and a clear call for leaders to prioritize this issue and increase funding.
The document discusses the Phillips curve, which shows the relationship between unemployment and inflation. It describes how Alban Phillips first observed an inverse relationship between wage growth and unemployment rates in Britain. Many economists then concluded there is a negative short-run relationship between unemployment and inflation rates, known as the short-run Phillips curve. However, changes in expected inflation rates can shift this curve. In the long run, policies aimed at reducing unemployment below the natural rate of unemployment lead to accelerating inflation.
This document discusses parallel or black economies. It defines parallel economies as unreported economic activities and explains how they pose threats such as loss of government revenue and incorrect GDP estimations. The document outlines effects of parallel economies like unequal income and wealth distribution and corruption. It then discusses measures governments can take to reduce parallel economies, such as voluntary disclosure schemes, privatization, and international cooperation on foreign black money holdings. Major tax evasion scams in India are also listed with estimated amounts. The conclusion estimates India has the highest amount of black money globally at $1,456 billion.
This document summarizes key aspects of the Phillips curve and debates around inflation theories. It discusses how Samuelson and Solow popularized the Phillips curve as a policy tool showing a tradeoff between inflation and unemployment. However, their interpretation led policymakers in the 1960s-1970s to pursue expansionary policies, fueling the Great Inflation. Later analysis found Samuelson and Solow did not actually estimate the Phillips curve relationship but drew it by hand, and a proper estimation shows a different relationship with implications for economic policy.
Federalism and issues of centrally sponsored schemesAbdul
This document discusses issues related to Centrally Sponsored Schemes (CSS) in India. CSS are schemes implemented by state governments but largely funded by the central government. The document outlines 10 key issues with CSS: 1) they lack local knowledge, 2) have poor coordination with states, 3) are unnecessary given states' current capacities, 4) uniform guidelines reduce state autonomy, 5) proliferation reduces states' fiscal capacity, 6) funding is uncertain, 7) matching requirements disadvantage poor states, 8) schemes are inflexible to local needs, 9) there are too many thinly funded schemes, and 10) states lack qualified staff for implementation.
Public finance chapter 7, difference between public finance and private finance, Principle of Maximum Social Advantage, Canons of Taxation, Types of Tax, Direct and Indirect Tax, Specific and Ad veloram tax,
The document summarizes key concepts from macroeconomic growth models including the Harrod-Domar, Solow-Swan, and endogenous growth models. It discusses the Harrod-Domar model which relates an economy's growth rate to its capital stock and savings ratio. It then summarizes the Solow-Swan model which incorporates technological progress and assumes diminishing returns to capital. The model predicts economies will eventually reach a steady state level of capital and output. Finally, it briefly mentions endogenous growth models which seek to explain technological progress.
Public Finance by Harvey S. Rosen and Ted GayerMinLwinThein
This document summarizes answers to discussion questions from a chapter on public finance. It discusses different views of the role of government and challenges with using empirical analysis to determine the effects of policies. Specifically:
- Libertarians believe in limited government while social democrats see a role for intervention, and those with an organic view see the state's goals as most important.
- It is difficult to determine cause-and-effect from observational data, as factors like self-selection can bias results. Randomized experiments help address this but also have limitations.
- When analyzing the size of government, one must consider spending at all levels of government as well as regulatory activity over time to get a full picture.
Kaldor and Hicks developed the compensation principle to evaluate changes in social welfare resulting from economic changes that help some and harm others. Their principle states that if those who gain can compensate the losers and still be better off, the change increases social welfare. They used utility possibility curves to illustrate this, showing how compensation could move individuals to a higher indifference curve. Their theory was criticized for requiring interpersonal utility comparisons and assuming compensation actually occurs.
Tax incidence and it’s effect on supplyChhavi Dudeja
The document discusses tax incidence and how the burden of taxes shifts between sellers and consumers. It explains that when a tax is imposed on cigarettes, the initial burden falls on the seller but they can shift it to consumers by raising prices. Whether the tax burden ultimately falls more on sellers or consumers depends on the elasticity of supply and demand - the more inelastic side bears more of the tax burden. Specifically, if supply is elastic then sellers are sensitive to price changes and consumers will end up paying the tax through higher prices.
1) Autocorrelation refers to correlation between members of a time series or cross-sectional data set ordered by time or space.
2) In a time series, successive errors are often correlated, violating the assumption of independent errors in a linear regression model.
3) Autocorrelation occurs when there is correlation between a variable and its own past or lagged values, while serial correlation refers to correlation between two different time series.
The document discusses the theory of unbalanced growth as proposed by economists like Hirschman and Rostow. The key points are:
1. The theory argues for prioritizing investment in strategic sectors rather than all sectors simultaneously due to scarce resources in developing countries.
2. Investment in priority sectors will stimulate growth in other sectors through "linkage effects" as costs decrease and demand increases.
3. Hirschman classified investments as either social overhead capital (infrastructure) or direct productive activities (agriculture, industry) and argued the two cannot be expanded simultaneously so one sector should be prioritized initially.
Laffer Curve is the diagrammatic representation of the relationship between tax rates and the revenue generated from each tax rate. It is based on the premise that as there is a rise in tax rate, lower is the level of the activity undertaken and thus lower the resulting tax revenue generated from the given tax rate. Copy the link given below and paste it in new browser window to get more information on Laffer Curve:- http://www.transtutors.com/homework-help/economics/laffer-curve.aspx
This document discusses heteroscedasticity, which occurs when the error variance is not constant. It provides examples of when the variance of errors may change, such as with income level or outliers. Graphical methods are presented for detecting heteroscedasticity by examining patterns in residual plots. Formal tests are also described, including the Park test which regresses the log of the squared residuals on explanatory variables, and the Glejser test which regresses the absolute value of residuals on variables related to the error variance. Detection of heteroscedasticity is important as it violates assumptions of the classical linear regression model.
The document discusses key concepts and principles of economic development. It defines development as a multi-dimensional process involving not just economic growth but also social, institutional and cultural changes that improve living standards. Several metrics are used to measure development, including GDP per capita, human development index, health and education indicators. Common characteristics of developing countries are identified such as low living standards, income inequality, poverty, dependence on agriculture and lack of industrialization. Theories of development and classifications of countries by institutions like the UN and World Bank are also outlined.
MEANING
MEANING
DEFINITION
CLASSIFICATION OF PUBLIC EXPENDITURE
CAUSES FOR THE GROWTH OF PUBLIC EXPENDITURE
MEANING
DEFINITION
CLASSIFICATION OF PUBLIC EXPENDITURE
CAUSES FOR THE GROWTH OF PUBLIC EXPENDITURE
Liability-side liquidity risk arises when a financial institution's (FI's) depositors withdraw funds immediately. This can be addressed through purchased liquidity management, where the FI borrows funds, or stored liquidity management, where it sells assets. Asset-side liquidity risk occurs when borrowers draw on loan commitments, requiring the FI to fund new loans immediately using similar approaches. Overall, purchased liquidity allows an FI to maintain its asset size but at a higher funding cost, while stored liquidity contracts both sides of the balance sheet but avoids new interest costs.
The Federal Reserve took several steps to address the US credit crisis, including establishing new lending facilities to provide banks with liquidity and lower interest rates. The Term Auction Facility, Term Securities Lending Facility, Primary Dealer Credit Facility, and Commercial Paper Funding Facility allowed banks and dealers to borrow directly from the Fed. The Fed also lowered interest rate targets and expanded currency swaps with other central banks to ease global credit. However, the responses failed to prevent high inflation and a weaker dollar, and may have increased moral hazard risk.
This document provides an overview of two-variable regression analysis and the concept of the population regression function. It discusses how regression analysis is used to estimate the mean value of the dependent variable based on the independent variable. It introduces a hypothetical example using family income and consumption expenditure data. It defines key concepts like the population regression line and function, and explains how the regression model specifies the dependent variable as a linear function of the independent variables plus a stochastic disturbance term to account for omitted variables.
This document discusses alternative delivery methods for public goods. It begins by defining public goods and categorizing them as pure or impure. Pure public goods are non-rival and non-excludable, while impure goods include club goods, common pool goods, and merit/demerit goods. The document then examines various arrangements for providing different types of public goods, including government production, contracting with private firms, franchising, leasing, and user charges. It concludes by presenting a table assessing the suitability of delivery methods for each public good category.
The document discusses economic structural changes that occur during development. It defines structural changes as long-term shifts in the composition of economic sectors, such as the rise of manufacturing and services and decline of agriculture and industry over time. Countries experience rapid structural transformation as they industrialize, exemplified by many developing nations in Asia and Latin America that grew their manufacturing sectors. However, structural changes differ across countries depending on factors like endowments and history. More recently, the service sector has become dominant globally as the role of agriculture and manufacturing declines.
Development economics (: Development Economics II)-2.pptxTesfayeBiruAsefa
Human capital refers to investments in people such as education and health that increase productivity. Education and health are important for development as they expand human capabilities and are inputs to economic growth. While literacy and life expectancy have increased globally, developing countries still face challenges in improving education and health access and distribution. Income alone is not sufficient to drive improvements in human capital, as families may spend additional funds on empty calories rather than nutrition. Coordinated strategies are needed to simultaneously increase incomes, education, and health.
The document discusses the importance of investing in early childhood development (ECD) to meet UN Sustainable Development Goal 4 of ensuring inclusive, equitable quality education. It notes that over 200 million young children are not reaching their developmental potential due to factors like poverty and lack of nutrition and quality care. Investing in the foundational aspects of ECD like early learning, nutrition and responsive parenting can transform children's lives and have high economic returns. The UN's new SDGs set targets to expand access to quality ECD programs and reduce childhood malnutrition by 2025 and 2030. Upcoming reports on scaling up ECD services are expected to provide new data and a clear call for leaders to prioritize this issue and increase funding.
ASEFSU23 Background Paper Child Obesity In IndiaNathan Mathis
This document discusses the growing crisis of childhood obesity in India, focusing on Delhi. It finds that childhood obesity levels are increasing, especially in urban areas and among affluent families. This is linked to factors of urbanization like reduced physical activity and increased access to unhealthy, calorie-dense foods. Children in Delhi are 5 times more likely to be overweight than rural children due to different diets and lifestyles. If left unaddressed, childhood obesity can lead to lifelong health issues and economic costs. The document calls for policy measures that consider the urban factors driving obesity and link urban development programs to addressing this issue.
Human capital: Education and health in economic development egpShivani Baghel
A brief study on the economic development of health and education in India in the present scenario.
It talks about joint investment in both the sectors considering their rate of return, while dealing with questions like why increasing income is not sufficient? It also briefs about child labor and gender gap.
The document discusses the economic costs of inadequate breastfeeding rates in several countries. It finds that in China, India, Nigeria, Mexico and Indonesia alone, inadequate breastfeeding costs nearly $119 billion per year due to child mortality, healthcare costs, and lost future wages from reduced cognitive ability in children. Meeting the global target of 50% exclusive breastfeeding by 2025 would require an additional $5.7 billion investment, but could generate $300 billion in economic gains and save over 500,000 children's lives. Every $1 invested in breastfeeding generates $35 in economic returns.
Mobilizing Domestic Resources for Universal Health Coverage by Dr. Ngozi Okon...Ngozi Okonjo-Iweala
Keynote Address Delivered by Dr. Ngozi Okonjo-Iweala, Chair of the Board of Gavi, the Vaccine Alliance at The First Universal Health Coverage Financing Forum Organised by the World Bank Group, and USAID Attended by Health and Finance Ministers and Health Experts.
Healthcare issues for children include violence, infectious diseases, poverty, hunger, environment, education, and access to care. Violence has caused many children to lose their lives or be disabled. Infectious diseases such as tuberculosis, HIV/AIDS, diarrhea and malaria have killed many children worldwide. Poverty deprives children of their rights and weakens their environment. Hunger continues to affect over 1 billion children globally through inadequate access to essential resources. Environmental factors also impact children's physical and mental development. Lack of education and access to affordable healthcare further exacerbate health challenges for children.
Study of various population factor and its effect.AJAY CHETRI
Demographic Transition,World Population Demographics,Economic Growth Facts Concerned,Reflexion,World’s Population growth Hierachy,Glimpses of Population Growth in relation to Socio economic developments,Agricultural Revolution,Social Equity View,Both hunger and high fertility occur when:,Women’s Education,Family Planning,Challenge: Burden of Diseasein the new millenium,Birth Control Methods in China,A change an Initiative,The challenge of caring for a billion,Economic development, Education and Health,Air pollution is changing Earth’s biosphere. ,Water pollution affects ecosystems.
UNICEF works to improve the health and nutrition of children in Europe and Central Asia. Together with our partners, we are strengthening health systems, expanding immunization coverage, supporting health programs and funding
The Europe and Central Asia region has outperformed the rest of the world in the rate of decline in child mortality, with deaths of children under five and infants more than halved since the 1990s. As the situation of the poorest households improves, the difference in the health status of the richest and poorest populations decreases.
However, persistent inequalities reflect a failure to effectively invest in child-centred universal health systems. For example, in South-Eastern Europe, the mortality of Roma children is two to three times higher than the national average.
S9c1 chapter 1-facts and figures on health.Shivu P
Health is a continuous state of physical, mental and social well being and not merely the absence of disease or infirmity, and the person should be able to lead socially and economically productive life (WHO definition). It is very much essential to maintain the health of all the people all the time to keep ourselves healthy, happy and long living. For example you cannot fly peace fully in the flight if someone tells that some people in the same flight is having H1N1 infection. Whether it is communicable disease or non communicable it is necessary to keep all the people healthy. For example a young driver getting painless myocardial infarction can consume the life of all the passengers of his bus or the bus can hit the VIP's car travelling in the same road. So the leaders of the nation / world should not have the attitude that why should I bother if someone is sick somewhere. I feel the leaders of the nation and the world will understand the importance of maintaining the health of all the people with this simple examples. In this chapter some of the facts and figures related to the health is mentioned and it tells that we have not achieved the goals in health, that, what we can achieve for whatever the reasons. The reason may point towards anything like the doctor, minister, staff of the hospital, availability of the facility, roads, infrastructure, transportation facility and so on. Let us try to make all the people healthy, young and energetic.
The value of health to an economy is hard to quantify, but its importance is undeniable. A population’s health plays a key role in economic progress, and in coming years healthcare will be a key area of focus for policymakers, payers,providers and the public alike. Financing the future: Choices and challenges in global health studies the role of healthcare against a backdrop of changing demographic patterns, rising healthcare costs and technological innovation.
Malnutrition and human capital in the 4th revolutionVictor Onyeka
Human capital is critical in this fourth generation where technology is changing the nature of work and putting a premium on higher-order skills. The benefits of improving human capital are enormous. However, the menace of malnutrition is inimical both to the current and future generation’s workforce. Proper nutrition right from conception all through life is correlated to Human Capital Index and the progress of nations. Well-nourished citizens are healthier, happier and more productive.
Hence, the Government and members of the society must ensure that they collaborate to fight malnutrition which negatively impacts on the progress and development of any society.
Research data from more than 50 countries confirm that there exist strong protective factors against health compromising behaviours in adolescents. This knowledge will help us to balance the traditional focus on risk factors and support the development of interventions that strengthen protective factors in adolescents themselves, in their relations with adults and their wider environment.
The document makes the case for concerted action on adolescent health, it explains CAH's "4S framework" to strengthen the response of the health sector to adolescents, CAH's systematic approach to scaling up health service provision to adolescents, and the rationale and objectives of CAH's work in focus countries.
It is intended for staff from other departments in WHO working on health issues of relevance to adolescents (e.g. reproductive health or mental health), staff in WHO's Regional and Country Offices, staff in other organizations supporting efforts or working themselves to improve the health of adolescents, and policy makers and programme managers in ministries of health.
The document discusses the importance and benefits of investing in education. It notes that education is a fundamental human right and key to a country's future success. While education costs money, not investing in education is even more costly due to increased public spending on issues like health, crime, and decreased economic growth. The document also discusses estimates of the economic returns from investing in education, showing education increases productivity and earnings. Overall, the document advocates for the importance of education in developing skilled workforces and competitive economies.
This document summarizes healthcare challenges in South Africa. It notes that while South Africa has made efforts to provide universal healthcare since 1994, key health indicators have stagnated or declined. South Africa faces a major challenge from HIV/AIDS, with the highest prevalence in the world. Nearly half of TB cases are co-infected with HIV. Other issues include high infant, child, and maternal mortality rates. The document calls for integrated primary healthcare services that address the needs of vulnerable populations and achieving health-related UN Millennium Development Goals.
Health Policy Project 2:
Precious Teasley
Southern New Hampshire University
Health Policy and Law 22TW5
Dr. Jim Dockins
July 21,2022
Health Policy Project 2: Continuation
Stakeholder Needs
Low compensation for immunization services is a problem for physicians, so the government must ensure that they are reimbursed adequately. Immunizations are too costly for vulnerable populations whose medical insurance does not cover them. Due to the exorbitant expense of these vaccines in private hospitals and pharmacies, these individuals cannot access them. Adult vaccines may also be unavailable due to the inability of the most vulnerable individuals to travel to distant public health centers in quest of vaccinations. For doctors and pharmacists to purchase vaccines from pharmaceutical companies, a large amount of funds is necessary. In addition, they require funding for the purchase of new, high-tech storage facilities, as the preservation of vaccines requires the usage of specific substances. Pharmaceutical businesses need funding for disease-related research and the installation of intricate systems for creating and monitoring vaccinations. In addition, they need cash to purchase huge, specialized storage containers so that vaccines are accessible everywhere. To provide vaccines to the public, health insurance companies require funding to meet the vaccine administration needs of their consumers.
Taking the financial demands of stakeholders into account when making decisions about low adult immunization rates can assist assure optimal vaccine supply and distribution, enhanced following and monitoring requirements, and vaccine availability. Consideration of the requests will result in shared provider contacts and public-private partnerships, which will speed up adult immunization.
Financial Influence
The primary financial stakeholders are pharmaceutical corporations, which conducted the research, developed the vaccines, and brought them to market. The patient's financial situation is gently adjusted despite the moral obligation of pharmaceutical companies to ensure that the market can afford their product; the patient, as the product's recipient, experiences hidden impacts. It is essential to be aware of these elements in order to develop an effective health policy. If the underlying reasons for the problem are not addressed, it is impossible to find a remedy. The role of government is to ensure equality for all citizens while safeguarding commercial interests. Before the government can assist the poor with their health issues, it must decide who controls prices and costs (Chaudhary et al., 2020). During the planning and decision-making process, not only the patient and doctors but also the company must be protected and assisted.
Benefits and Disadvantages
In numerous ways, the issue is advantageous to the stakeholders. They will be able to get monies quickly from prom commitments made in the face of emergency illness epidemics t ...
This document discusses the relationship between nutrition, health, and economic development. It states that malnutrition negatively impacts economic development by increasing mortality and morbidity, especially in children and women. Poor nutrition lowers educational performance and cognitive ability due to issues like iodine and iron deficiencies. However, improved nutrition can boost economic growth by increasing labor productivity and utilization of resources. Overall, better health and nutrition are closely tied to individual and national well-being and prosperity.
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"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
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2. 2 Human capital refers Productive investments embodied in human
persons, including skills, abilities, ideals, health, and locations,
often resulting from expenditures on education, on-the-job
training programs, and medical care.
Education and health are basic objectives of development; they are
important ends in themselves.
Health is central to well-being, and education is essential for a
satisfying and rewarding life; both are fundamental to the broader
notion of expanded human capabilities that lie at the heart of the
meaning of development.
1. The Central Roles of Education and Health
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3. 3
Education plays a key role in the ability of a developing country
to absorb modern technology and to develop the capacity for self-
sustaining growth and development.
Moreover, health is a prerequisite for increases in productivity,
and successful education relies on adequate health as well.
Thus both health and education can also be seen as vital components of
growth and development—as inputs to the aggregate production
function.
Their dual role as both inputs and outputs gives health and education
their central importance in economic development.
There have been truly dramatic improvements in world health and
education:
Roles of Educ. and Health------------
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4. 4
In Health:
In 1950, some 280 of every 1,000 children in the developing
world as a whole died before their fifth birthday.
By 2008, that number had fallen to 118 per 1,000 in low-
income countries and 57 per 1,000 in middle-income
countries (though now compared with 7 per 1,000 in high
income countries and just 4 in many European countries).
Some important killers have been completely or nearly
eradicated.
Smallpox used to kill more than 5 million people every year; the
virus no longer exists outside a few laboratory samples.
Major childhood illnesses such as rubella and polio have been
largely controlled through the use of vaccines.
Roles of Educ. and Health------------
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5. 5
In Education:
In recent decades have witnessed a historically unprecedented extension of
literacy and other basic education to a majority of people in the developing
world.
The United Nations reports that although there were still a staggering
780 million illiterate people aged 15 or older in the world in 2004, the
good news is that 82% of all people are literate today, compared to just
63% as recently as 1970.
But almost two-thirds of the world’s illiterate people are women.
Roles of Educ. and Health------------
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6. 6 Despite such outstanding achievements, developing countries continue to
face great challenges as they seek to continue to improve the health and
education of their people. These are:
The distribution of health and education within countries is as
important as income distribution;
eg- life expectancy may be quite high for better-off people in
developing countries but far lower for the poor.
Child mortality rates in developing countries remain more than ten
times higher than those found in the rich countries.
These deaths generally result from conditions that are easily
treatable, including millions who continue to die needlessly each year
from dehydration caused by diarrhea.
Roles of Educ. and Health------------
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7. 7 Many children who survive nonetheless suffer chronic problems of
malnutrition, debilitating parasitic infections, and other recurrent
illnesses.
Problems caused by lack of key micronutrients such as iodine, as well
as protein, affect nearly 2 billion people, but children are
particularly vulnerable.
Roles of Educ. and Health------------
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8. 8
2. Education and Health as Joint Investments for
Development
► Health and education are closely related in economic
development.
►On one hand, greater health capital may improve the return to
investments in education, in part because health is an important
factor in school attendance and in the formal learning process of a
child.
►A longer life raises the return to investments in education; better
health at any point during working life may in effect lower the
rate of depreciation of education capital.
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9. 9 On the other hand, greater education capital may improve the
return to investments in health, because many health programs
rely on basic skills often learned at school, including personal
hygiene and sanitation,
Moreover, an improvement in productive efficiency from
investments in education raises the return on a lifesaving
investment in health.
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10. 10
3. Improving Health and Education: Why Increasing
Income Is Not Sufficient
Health and education levels are much higher in high-income
countries.
There are good reasons to believe that the causality runs in
both directions:
With higher income, people and governments can afford to spend
more on education and health, and
with greater health and education, higher productivity and incomes are
possible.
Because of these relationships, development policy needs to
focus on income, health, and education simultaneously.
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11. 11
But the evidence shows clearly that even if we were able to
raise incomes without a large improvement in health and
education, we could not count on that income increase being
used to adequately invest in children’s education and
health.
The market will not solve this problem automatically, and in
many cases, household consumption choices themselves
may lead to a surprisingly small link between income and
nutrition, especially for children.
Improving Health and Education---------
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12. 12 The income elasticity of the demand for calories (that
is, the percentage change in calories consumed for a
percentage change in family incomes) among low-
income people range from near zero to about 0.5,
This less than proportional response is due to two
factors:
Income is spent on other goods besides food, and
part of the increased food expenditures is used to increase
food variety without necessarily increasing the
consumption of calories.
Improving Health and Education---------
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13. 13 An increase in income frequently allows families in developing
countries to switch consumption from nutritious foods such as beans
and rice to non nutritious “empty calories” such as candy and
soda, which may be perceived as modern and symbolic of economic
success.
Parents may then fail to place restrictions on children’s consumption
of such items or to place positive restrictions on consumption of
nutritious foods.
Howarth Bouis found that intake of vitamins A and C is not
positively associated with income in the Philippines and argued
that consumer education was important.
Improving Health and Education---------
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14. 14
There is considerable evidence that the better the education
of the mother, the better the health of her children.
Paul Glewwe found in an analysis of data from Morocco that a
mother’s basic health knowledge had a positive effect on her
children’s health.
Several mechanisms were possible, such as that:
Formal education directly teaches health knowledge to
future mothers;
Literacy and numeracy skills acquired in school assist
future mothers in diagnosing and treating child health
problems; and
Exposure to modern society from formal schooling makes
women more receptive to modern medical treatments.
Improving Health and Education---------
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15. 15
Better health and nutrition leads to:
Earlier and longer school enrollment, better school attendance, and
more effective learning.
Eg- it has been found that the probability of attending
school among nutritionally stunted(not grow well) children
in Nepal is far lower than for non stunted students.
- Undernourished children were found to lag 20% in test
score gains in northeast Brazil, one of the worst pockets of
poverty in Latin America.
- Children with low height for their age, an indicator of
under nutrition, have been found to lag in school grade
attainment in many parts of the world, including rural
China and Thailand.
Improving Health and Education---------
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16. 16 Thus to improve the effectiveness of schooling, we must
improve the health of children in developing countries.
Finally, there are other important spillover benefits to
investment in one’s health or education.
For example, an educated person provides benefits to people
around him or her, such as reading for them or coming up with
innovations that benefit the community.
As a result, there are significant market failures in education.
Improving Health and Education---------
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17. 17 Moreover, a healthy person is not only less contagious but can also
benefit the community in many ways that a sick person cannot.
Because of such spillover effects, the market cannot be counted on to
deliver the socially efficient levels of health and education.
Thus, as the World Health Organization (WHO) concluded, “Ultimate
responsibility for the performance of a country’s health system lies
with government.”
Developing-country officials are drawing lessons from the many
studies showing the interrelationships among health, education, and
incomes and are devising integrated strategies.
Improving Health and Education---------
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18. 18
4. Investing in Education and Health:
The Human Capital Approach
Human capital is the term economists often use for education, health, and
other human capacities that can raise productivity when increased.
An analogy is made to conventional investments in physical capital: After an
initial investment is made, a stream of higher future income can be generated
from both expansion of education and improvements in health.
As a result, a rate of return can be deduced and compared with returns to
other investments.
This is done by estimating the present discounted value of the increased
income stream made possible by these investments and then comparing it
with their direct and indirect costs.
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19. 19
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The basic human capital approach focuses on their indirect ability to
increase well-being by increasing incomes.
In this section, we will generally illustrate points with educational
investments, but the same principles apply to health investments.
But such future income gains from education must be compared with
the total costs incurred to understand the value of human capital as an
investment.
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20 Education costs include any direct tuition or other expenditures
specifically related to education, such as books and required school
uniforms, and indirect costs, primarily income forgone because the student
could not work while in school.
Formally, the income gains can be written as follows, where E is income
with extra education, N is income without extra education, t is year, i is the
discount rate, and the summation is over expected years of working life:
--------------------------- 2.1.
21. 21
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An analogous formula applies to health (such as improved nutritional
status), with the direct and indirect cost of resources devoted to health
compared with the extra income gained in the future as a result of higher
health status.
Figure below provide a typical schematic representation of the trade-offs
involved in the decision to continue in school.
It is assumed that the individual works from the time he or she finishes
school until he or she is unable to work, retires, or dies.
This is taken to be 66 years.
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22
Figure 2:1: Financial Trade – Offs in the Decision to Continue in School
A direct cost, such as
fees, school uniforms,
books, and other
expenditures that would
not have been made if
the individual had left
school at the end of the
primary grades.
Over the rest of the person’s life, he or she makes more money each year
than would have been earned with only a primary education. This
differential is labeled “Benefits” in the diagram.
23. 23
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Before comparing costs with benefits, note that a dollar today is
worth more to an individual than a dollar in the future, so those
future income gains must be discounted accordingly, as is done in
Equation 2.1.
The rate of return will be higher whenever the discount rate is lower,
the direct or indirect costs are lower, or the benefits are higher.
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24
5. The Gender Gap: Discrimination in Education and Health
Young females receive less education than young males in most low-
income developing countries.
Large majorities of illiterate people and those who have been unable to
attend school around the developing world are female.
The educational gender gap is especially great in the least developed
countries in Africa, where female literacy rates can be less than half that of
men in countries such as Niger, Mali, Guinea, and Benin.
The gap is also relatively large in South Asia; in India, the adult female
literacy rate is just 47.8, which is just 65% of the male rate (the female
youth literacy rate is 67.7, 80% of the male youth literacy rate).
A. Education and Gender:
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25
Recall that the target for Millennium Development
Goal 3 (“promote gender equality and empower
women”) is to “eliminate gender disparity in
primary and secondary education preferably by
2005, and at all levels by 2015.”
Although the 2005 date was missed in many
countries, progress has been dramatic in many others.
In most low income countries and many middle-
income countries, women make up a minority—
sometimes a small minority—of college students.
Gender Gap--------------------------------------------------------------
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26
School completion is also subject to gender inequalities, and
the gap is often particularly large in rural areas.
For example, in rural Pakistan, 42% of males complete their
primary education, while only 17% of females do.
In the cities, the gender gap is smaller though still substantial, as
64% of males complete primary education versus 50% of females
in urban areas.
Gender Gap--------------------------------------------------------------
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27 Empirical evidence shows that educational discrimination against women
hinders economic development in addition to reinforcing social inequality.
Closing the educational gender gap by expanding educational opportunities for
women, a key plank of the Millennium Development Goals, is economically
desirable for at least three reasons:
i. The rate of return on women’s education is higher than that on men’s in
most developing countries.
ii. Increasing women’s education not only increases their productivity in the
workplace but also results in greater labor force participation, later
marriage, lower fertility, and greatly improved child health and nutrition,
thus benefiting the next generation as well.
iii. Because women carry a disproportionate burden of poverty, any
significant improvements in their role and status via education can have an
important impact on breaking the vicious circle of poverty and inadequate
schooling.
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28
Girls also face discrimination in health care in many
developing countries.
In South Asia, for example, studies show that families are far
more likely to take an ill boy than an ill girl to a health center.
Women are often denied reproductive rights, whether legally
or illegally.
Broadly, health spending on men is often substantially higher
than that on women.
And in many countries such as Nigeria, health care decisions
affecting wives are often made by their husbands.
B. Health and Gender:
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29
6. Consequences of Gender Bias in Health and Education
Studies from around the developing world consistently show that
expansion of basic education of girls earns among the very highest
rates of return of any investment— much larger, for example, than
most public infrastructure projects.
Eg- One estimate is that the global cost of failing to educate girls is
about $92 billion a year.
This is one reason why discrimination against girls in education is not
just inequitable but very costly from the standpoint of achieving
development goals.
Education of girls has also been shown to be one of the most cost-
effective means of improving local health standards.
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30 Studies by the United Nations, the World Bank, and other
agencies have concluded that the social benefits alone of
increased education of girls is more than sufficient to cover
its costs—even before considering the added earning power this
education would bring.
Inferior education and health care access for girls shows the
interlinked nature of economic incentives and the cultural
setting.
Eg- In many parts of Asia, a boy provides future economic
benefits, such as support of parents in their old age and possible
receipt of a dowry upon marriage, and often continues to work on
the farm into adulthood.
Consequences of Gender Bias------------------------------------------------------------
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31
A girl from a poor rural family in South Asia will in many cases
perceive no suitable alternatives in life than serving a husband
and his family; indeed, a more educated girl may be considered “less
marriageable.”
For the parents, treatment of disease may be expensive and may
require several days lost from work to go into town for medical
attention.
Empirical studies demonstrate what we might guess from these
perverse(contrary) incentives: Often more strenuous efforts are
made to save the life of a son than a daughter, and girls generally
receive less schooling than boys.
Consequences of Gender Bias------------------------------------------------------------
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32 The bias toward boys helps explain the “missing women” mystery.
In Asia, the United Nations has found that there are far fewer females as a
share of the population than would be predicted by demographic norms.
Estimating from developed-country gender ratios, Nobel laureate
Amartya Sen concluded that worldwide “many more than” 100 million
women are “missing.”
As of 2010, the estimated ratio of males to females in China and India
was 1.06 and 1.08 respectively, compared with 0.98 in the United States,
United Kingdom, and Canada.
Consequences of Gender Bias------------------------------------------------------------
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33 The problem may be worsening in several countries including
China, where the Chinese Academy of Sciences estimated in a
2010 report that 119.5 boys were born for every 100 girls in
2009; sex-selective abortion is an important cause.
In India, this ratio is also a very high 112.
The evidence on gender bias in Africa is mixed, with some studies
finding a small pro-female bias and others a small and possibly
rising pro-male bias.
Greater mothers’ education, however, generally improves prospects
for both her sons’ and daughters’ health and education.
Studies show that mothers’ education plays a decisive role in
raising nutritional levels in rural areas.
Consequences of Gender Bias------------------------------------------------------------
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34
7. Educational Systems and Development
What is education?
“Education” is a broad term that can have many meanings, but it is
generally defined as the process or provision of learning and acquiring
information.
It is the act or process of imparting or acquiring general knowledge and
of developing the powers of reasoning and judgment
Education can add to the value of production in the economy and also to
the income of the person who has been educated. But even with the
same level of income, a person may benefit from education—in reading,
communicating, arguing, in being able to choose in a more informed
way, in being taken more seriously by others and so on.
For many people the importance of education lies in future job
prospects, for others it's quality of citizenship, and yet others just want
literacy, critical thinking, and/or creativity.
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35
Why is education essential for development?
People agree that all people have the right to an education. But investing in
education is also the smart thing to do. Why?
Because education gives people the skills they need to help themselves out
of poverty and into prosperity.
Education:
Improved Health: With education, people are better prepared to prevent disease and to
use health services effectively. For example, young people who have completed
primary education are less than half as likely to contract HIV as those with little or no
schooling. Educated mothers have healthier children.
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36
Higher wages and economic growth: In many poor countries, with each
additional year of schooling, people earn 10% higher wages. These
earnings, in turn, contribute to national economic growth. No country has
ever achieved continuous and rapid growth without reaching an adult
literacy rate of at least 40%.
Democracy and political stability: Education supports the growth of
civil society, democracy, and political stability, allowing people to learn
about their rights and acquire the skills and knowledge necessary to
exercise them.
Increase productivity: Education increase the level of productivity. The
productivity of educated person more higher than uneducated person. It is
widely believed that constant exposure to new ideas and skills makes
people better workers, thinkers, and societal contributors.
Reduce fertility rate: The higher level of education reduce the number of
children.
Why is education---------------------------------------
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37
Benefits of education
Why is education---------------------------------------
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38 Much of the literature and public discussion about education and
economic development in general, and education and employment in
particular, revolves around two fundamental economic processes:
The interaction between economically motivated demands and politically
responsive supplies in determining how many quality school places are
provided, who gets access to these places, and what kind of instruction
they receive and
The important distinction between social and private benefits and
costs of different levels of education and the implications of these
differentials for educational investment strategy
Why is education---------------------------------------
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39
The Relationship between Employment
Opportunities and Educational Demands
The amount of schooling received by an individual, although affected by many
nonmarket factors, can be regarded as largely determined by demand and supply,
like any other commodity or service.
On the demand side: the two principal influences on the amount of
schooling desired are:
a more educated student’s prospects of earning considerably more income
through future modern-sector employment (the family’s private benefits of
education) and
the educational costs, both direct and indirect, that a student or family
must bear.
The amount of education demanded is thus in reality a derived
demand for high-wage employment opportunities in the modern
sector.
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40
On the supply side: the quantity of school places at the primary,
secondary, and university levels is determined largely by political
processes, often unrelated to economic criteria.
Given mounting political pressure throughout the developing world for
greater numbers of school places at higher levels, we can for convenience
assume that the public supply of these places is fixed by the level of
government educational expenditures.
These are in turn influenced by the level of aggregate private demand for
education. Because the amount of education demanded largely determines
the supply (within the limits of government financial feasibility), let us
look more closely at the economic (employment-oriented) determinants of
this derived demand.
Educational Demand and Supply--------
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41 The amount of schooling demanded that is sufficient to qualify an
individual for modern-sector jobs appears to be related to or
determined by the combined influence of four variables:
the wage or income differential,
The probability of success in finding modern-sector employment,
the direct private costs of education, and
the indirect or opportunity costs of education.
Supply and amount demanded are equated not by a price-adjusting
market mechanism but rather institutionally, largely by the state.
The social benefits of education (the payoff to society as a whole) for all
levels of schooling fall short of the private benefits.
Educational Demand and Supply--------
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42
Governments and formal-sector private employers in many developing
countries tend to reinforce this trend by educational certification—
continuously upgraded formal educational entry requirements for jobs
previously filled by less educated workers.
Excess educational qualification becomes formalized and may resist
downward adjustment.
Note that this political economy process pulls scarce public
resources away from the limited and often low-quality basic
education available for the many and toward more advanced
education for the few. This is both inequitable and economically
inefficient.
Educational Demand and Supply--------
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43
Social and Private Benefits and Costs
Social costs of education: Costs borne by both the individual and
society from private education decisions, including government education
subsidies.
Private costs: The costs that accrue to an individual economic unit.
Typically in developing countries, the social costs of education increase
rapidly as students climb the educational ladder.
The private costs of education (those borne by students themselves) increase
more slowly or may even decline. This widening gap between social and
private costs provides an even greater stimulus to the demand for higher
education than it does for education at lower levels. But educational
opportunities can be accommodated to these distorted demands only at full
social cost.
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44
Figure 2.1 provides an illustration of this divergence between private
and social benefits and costs. It also demonstrates how this divergence
can lead to a misallocation of resources when private interests supersede
social investment criteria.
In Figure 2.1 expected private returns and actual private costs are plotted
against years of completed schooling.
As a student completes more and more years of schooling, expected
private returns grow at a much faster rate than private costs, for
reasons explained earlier.
To maximize the difference between expected benefits and costs (and
thereby the private rate of re-turn to investment in education), the optimal
strategy for a student would be to secure as much schooling as possible.
Social and Private B & C-------------------
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45 Now consider Figure 2.1b, where social returns and social costs are plotted
against years of schooling. The social benefits curve rises sharply at first,
reflecting the improved levels of productivity of, say, small farmers and the
self-employed that result from receipt of a basic education and the attainment
of literacy, arithmetic skills, and elementary vocational skills.
Thereafter, the marginal social benefit of additional years of schooling rises
more slowly, and the social returns curve begins to level off. By contrast, the
social cost curve shows a slow rate of growth for early years of schooling
(basic education) and then a much more rapid growth for higher levels of
education.
This rapid increase in the marginal social costs of post primary education
is the result both of the much more expensive capital and recurrent costs of
higher education (buildings and equipment) and the fact that much post
primary education in developing countries is heavily subsidized.
Social and Private B & C-------------------
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46
Figure 2.1 Private and Social Benefits and Costs of Education
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47
In general the expansion of educational opportunities has contributed to
aggregate economic growth by:-
Creating a more productive labor force and endowing it with increased
knowledge and skills;
Providing widespread employment and income-earning opportunities for
teachers, school and construction workers, textbook and paper printers,
school uniform manufacturers, and related workers;
Creating a class of educated leaders to fill vacancies left by departing
expatriates or otherwise vacant or prospective positions in governmental
services, public corporations, private domestic and foreign businesses, and
professions; and
Providing the kind of training and education that would promote literacy
and basic skills while encouraging “modern” attitudes on the part of
diverse segments of the population.
Social and Private B & C-------------------
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49 Studies have also demonstrated that contrary to what might have been
assumed, the educational systems of many developing nations sometimes
act to increase rather than to decrease income inequalities.
The basic reason for this perverse effect of formal education on income
distribution is the positive correlation between level of education and level of
lifetime earnings.
This correlation holds especially for workers who are able to complete upper
secondary and university education where income differentials over workers
who have completed only part or all of their primary education can be on the
order of 300% to 800%. And as levels of earned income are clearly dependent
on years of completed schooling, it follows that large income inequalities will
be reinforced if students from the middle- and upper-income brackets are
represented disproportionately in secondary and university enrollments.
Education and Inequality------------
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50
In short, if for financial or other reasons the poor are effectively
denied access to secondary and higher educational opportunities,
the educational system can actually perpetuate and even increase
inequality across as well as within generations in developing
countries.
The private costs of primary education (especially in view of the
opportunity cost of a child’s labor to poor families) are higher for poor
students than for more affluent students, and the expected benefits of
(lower-quality) primary education are lower for poor students.
Together, the higher costs and lower expected benefits of education
mean that a poor family’s rate of return from investment in a
child’s education is lower than it is for other families.
Education and Inequality------------
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51
The poor are therefore more likely to drop out during the early years
of schooling.
As a result of these higher opportunity costs, school attendance, and
there fore school performance, tends to be much lower for children of
poor families than for those from higher-income backgrounds.
This is greatly compounded by the lower quality of schools attended
by the poor, plagued by poor teaching and teacher truancy and
inadequate facilities. Thus in spite of the (often very recent) existence
of free and universal primary education in many developing countries,
children of the poor, especially in rural areas, are often unable to
proceed beyond the first few years of schooling.
Education and Inequality------------
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52
Education and inequality
There are a number of factors that affect the impacts of education
on income inequality:
The cost of education
The supply of education-access to education or distribution of
education
The quality of education
The types of education
The nature and characteristics of labor market
Flexible or rigid
Labor market information.
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53
8. Health Measurement and Distribution
The World Health Organization (WHO), the key United
Nations agency concerned with global health matters,
defines health as “a state of complete physical, mental,
and social well-being and not merely the absence of disease
and infirmity.”
A World Bank study calculated that about one-quarter of the
global burden of disease was represented by diarrhea,
childhood diseases including measles, respiratory infections,
parasitic worm infections, and malaria, all major health
problems in developing countries.
Progress has continued to be made in most but not all of
these disease categories.
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54
Health, Productivity, and Policy
I. Health and Productivity:
The devastating effects of poor health on child mortality are clear enough.
But do poor health conditions in developing countries also harm the
productivity of adults? The answer appears to be yes.
Studies show that healthier people earn higher wages.
For example: daily wage rates in Côte d’Ivoire have been estimated to
be about 19% lower among men whose health status makes them likely
to lose a day of work per month because of illness than daily wage rates of
healthier men.
Careful statistical methods have shown that a large part of the effect
of health on raising earnings is due to productivity differences: It is
not just the reverse causality that higher wages are used in part to
purchase better health.
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55 A study in Bangladesh found that the higher productivity of healthier
workers allows them to get better-paying jobs.
The Nobel laureate Robert Fogel has found that citizens of
developed countries are substantially taller today than they were two
centuries ago and has argued that tallness is a useful index of the health
and general well-being of a population.
Increases in height have also been found in developing countries in
recent decades as health conditions have improved.
In most cases, rapid increases in average height earlier in the twentieth
century gave way to smaller increases by midcentury.
Health and Productivity----------------------------------
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56
If height is an indicator of general health status, to the extent that
increases in health lead to higher productivity, taller people should
earn more (unless height also proxies other productivity
characteristics).
John Strauss and Duncan Thomas found that taller men earn
more money in Brazil, even after controlling for other important
determinants of income such as education and experience;
A 1% increase in height is associated with a 7% increase in wages
in that middle-income country.
Health and Productivity----------------------------------
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57
In the United States, there is also an association, but a much smaller one,
with a 1% increase in height associated with a 1% increase in wages.
Moreover, shorter individuals are more likely to be unemployed
altogether.
Height reflects various benefits achieved early in life; thus one is not
seeing just the impact of current income on current height. In particular,
taller people receive significantly more education than shorter
people,
Note also that these relationships carry over to alternative health
measures such as the body mass index, which reflects short-term as well
as long-term health and nutrition.
Health and Productivity----------------------------------
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58
Strauss and Thomas draw on these results and a survey of the literature
to conclude that health and nutrition do increase productivity, with
the greatest improvements for those who are initially least educated and
poorest.
This finding magnifies the policy priority of health in development; not
only is health a major goal in itself, but it has a significant impact on
income levels as well.
After their exhaustive review of the literature and its complex statistical
and data problems, Strauss and Thomas conclude that “the balance of
evidence points to a positive effect of elevated nutrient intakes on
wages, at least among those who are malnourished.”
A healthy population is a prerequisite for successful development.
Health and Productivity----------------------------------
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59
Health Systems Policy
What is Health System?
In the WHO’s definition, a health system is “all the activities whose
primary purpose is to promote, restore, or maintain health.”
Health systems include the components of public health
departments, hospitals and clinics, and offices of doctors and
paramedics.
Outside this formal system is an informal network used by many
poorer citizens, which includes traditional healers, who may use
somewhat effective herbal remedies, or other methods that provide
some medical benefits, such as acupuncture, but who also may
employ techniques for which there is no evidence of effectiveness
beyond the place of effect.
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60 It has long been understood that some developing
countries’ health systems were far more effective than
others in achieving health goals.
At the same time, some middle-income countries, such as
Brazil, South Africa, and Gabon, have only been able to
achieve significantly lower life expectancies despite their
much greater resources.
The latter countries all have far more inequitable access to
health care than China, Sri Lanka, and Kerala.
Health Systems Policy--------------------------
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61
The WHO compared health systems around the world,
revealing great variability in the performance of health
systems at each income level.
For example; Singapore was ranked 6th, Morocco 29th,
Colombia 22nd, Chile 33rd, and Costa Rica 36th—all of these
developing countries ranked higher than the United States.
Clearly, much can be done with relatively modest incomes.
Health Systems Policy--------------------------
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62
The study used five performance indicators to measure health
systems in the 191 WHO member states:
1. the overall level of health of the population,
2. health inequalities within the population,
3. health-system responsiveness (a combination of patient
satisfaction and system performance),
4. the distribution of responsiveness within the population (how
well people of varying economic status find that they are
served by the health system), and
5. the distribution, or fairness, of the health system’s financial
burden within the population.
Health Systems Policy--------------------------
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63 The WHO concluded that “dollar for dollar spent on health, many
countries are falling short of their performance potential.
The result is a large number of preventable deaths and lives stunted by
disability.
The impact of this failure is born disproportionately by the poor.” At
any given income level, there was wide variation in country
performance, showing that a low-income country can achieve fairness
in allocating the resources that it has.
In fact, in equity of financial contribution, Colombia was the top-rated
country overall.
But several developing countries were judged to have the least fair
financing of health systems, including Sierra Leone, Myanmar, Brazil,
China, Vietnam, Nepal, the Russian Federation, Peru, and Cambodia.
In Brazil and Peru, people make high out-of-pocket payments for
health care, so poor households spend a large fraction of their
income on health.
Health Systems Policy--------------------------
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64
Formal public health measures have played a very important
role in developing countries. Ministries of health, sometimes
complemented by the services of nongovernmental
organizations, have played vital roles in extending smallpox.
But like educational systems, public health operations have
often favored the wealthy and well connected. Partly as a
result, health systems often use public funds inefficiently.
In effect, subsidies turn out to be focused on expensive curative
measures for older (and generally richer) patients, such as those
with heart disease or cancer, who are influential enough to get
into the right hospitals.
Too often ignored or at best underfunded are cost-effective
preventive health campaigns and basic medical care for those not
currently at tended to by any health professionals.
Health Systems Policy--------------------------
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65
Doctors trained with public subsidies often choose to practice a
speciality in affluent areas of the cities or emigrate to developed
countries.
And as the World Bank concluded, “In some countries a single
teaching hospital can absorb 20% or more of the budget of the
ministry of health, even though almost all cost-effective
interventions are best delivered at lower-level facilities.”
In addition to its direct positive effect on national health standards,
basic health is also an effective means to achieve goals of poverty
reduction.
Although both parents may be employed or self-employed long
hours, if parents are too weak, unhealthy, and unskilled to be
productive enough to support their family, the children have to
work.
Health Systems Policy--------------------------
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66
But if the children work, they cannot get the
education they need, so when they grow up,
they will have to send their own children to
work.
Thus the bad equilibrium of child labor
examined earlier in the chapter may extend
across the generations, as a family is effectively
locked into a vicious circle of poverty.
Calculations of benefits of health investments
need to keep these long-term spillovers in mind.
Health Systems Policy--------------------------
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67
An effective government role in health systems is
crucial for at least four important reasons.
☻First, health is central to poverty alleviation,
because people are often uninformed about health,
a situation compounded by poverty.
☻Second, households spend too little on health
because they may neglect externalities (such as,
literally, contagion problems).
Health Systems Policy--------------------------
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68
☻Third, the market would invest too little in health
infrastructure and research and development and technology
transfer to developing countries due to market failures.
☻ Fourth, public health programs in developing countries
have many proven successes. Government has different roles
in different countries, but as the WHO concluded, “The
careful and responsible management of the well-being of the
population— stewardship—is the very essence of good
government. . . . The health of people is always a national
priority: government responsibility for it is continuous and
permanent.”
Health Systems Policy--------------------------
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69 We conclude that health and education play pivotal roles in economic
development, as both inputs into production enabling higher incomes and
outputs directly affecting human well-being.
Many health and education problems plague developing countries, ranging
from child labor to heavy disease burdens.
Education and health will not always automatically improve with higher
incomes.
And market failures mean that too few investments in education and health
will be made from the social point of view.
Moreover, the wrong kinds of government policies have sometimes led to
distortions in the educational system that has reinforced inequality; and
inequities in health systems are common.
Thus government plays an essential role in health and education, and in
most developing countries, considerable improvements in policy are
needed.
conclusion