introductionslidep.pdf

Introduction
This chapter deals with National Income Accounting: Concept and Meaning of National
Income, its measurement, their components and different methods of computing.
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2.1 Social Accounts 2 / 185
2.1.1 The Nature of Social Accounts
Whenever you work for someone and get paid, that is economic activity. Whenever you
buy something at a store, that is economic activity. Whenever the government taxes you
and spends its money to build a bridge, that is economic activity. In general, if a flow of
money is involved in a transaction, economists will count that transaction as “economic"
activity. Overall, "economic activity" is the pattern of transactions in which things of real
useful value–resources, labor, goods, and services–are created, transformed, and exchanged.
If a transaction does not involve something of useful value being exchanged for money, odds
are that NIPA (the National Income and Product Accounts) will not count it as part of
“economic activity."
Businesses keep records of their transaction in the form of accounts. In a course of a year a
business enters into many transactions which include:
• buying
• selling
• paying wages
• distributing profits and
• borrowing money.
Definition 1. Records of transactions which take place in the national economy are called
Social Accounts.
By entering transactions into appropriate accounts, the transactions can be classified into
like categories can be aggregated and summarized.
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2.1.2 Classification of Economic Transactions
In drawing up social accounts for an economy, there are two problems.
1. the system of classification must be set up
2. the transactions or their aggregates must be measured
Definition 2. An economic transaction is defined as a transaction between two entities
which can be measured in money. For what one entity gives, the other must receive.
Definition 3. Social accounting is concerned with the classification of economic activities of
human beings (individuals) and human institutions in a way which help us to understand
the operation of the economy as a whole.
Each transaction can be classified into two basic aspects.
• According to the entities affected, i.e. according to the type of transactors
• According to the nature of economic activities involved in the transaction.
1. Type of Transactors
We can classify the entities which undertake economic transactions in to the following five
sectors.
1. Trading enterprises (Business sector)
2. Personal (Household sector)
3. Financial enterprise (Capital sector)
4. Government
5. The rest of the world
These sectors can be reclassified further, for example trading enterprise by type of industry.
Nature of Transaction
Economic transactions are necessarily two sided entries. Any particular can be recorded
twice, once in the payment (incoming) compartment and once in the receipt (outgoing)
compartment. For each sector, we shall have four classes
1. Production
2. Distribution
3. Disposal or
4. Accumulation.
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Trading Enterprises (Business sectors)
Trading enterprises are entities which are responsible for organizing the production of
goods and services. It includes all forms of productive activity, manufacturing businesses
and trading organizations, as well as entities selling services to the community. In sum, the
distinguishing characteristic of the trading enterprise is that it organizes the factors of
production (labor, capital equipment, natural resources) and there by produces goods or
services for sale.
Personal sector
Just as the producing entities from a sector of the economy, so do the consuming entities.
There are individual persons who every the fruits of the production organized by the
trading enterprises. The distinction between trading enterprises and persons is that, the
former organize production, usually with the object of making profits and the later enjoy
consumption with the object of satisfying their wants.
Government sector
Activities included here are all public authorities. The economic activities of governments
are mainly concerned with the provision of collective goods and services for the collective
consumption or use by the community. In addition, by means of taxation and cash social
service payment governments are able to effect a redistribution of income.
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Financial sector
This sector includes banks, life insurance offices, superannuation funds and various lending
agencies. Their activities lie mainly in borrowing and lending. They are concerned with the
provision of financial facilities to the economy as a whole and they oil the wheels of
industries.
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Rest of the world
There will be many transactions involving entities resident overseas. Consequently, we
must have this sector to take care of those entities to which we export and from which we
import goods and services the entities from which we raise overseas loans and so on.
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Estimation of Sector Accounts
production account for business sector :
payment to : receipt from
1. household sector
- wages and salary -sales of goods and services to HH
-rent
-interest
-Dividend
2. the government
-income tax (direct tax) -sales of goods and services
-vat (indirect tax) subsidies
3. capital
-business savings -sales of goods and services
-undistributed profit -gross domestic investment
-depreciation
4. the rest of the world
- imports - exports
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2.2. Social Accounting Matrix
Definition 4. A Social Accounting Matrix (SAM) represents flows of all economic
transactions that take place within an economy (regional or national). It is at the core, a
matrix representation of the National Accounts for a given country, but can be extended to
include non-national accounting flows, and created for whole regions or area.
• SAMs refer to a single year providing a static picture of the economy.
• SAMs are square (columns equal rows) in the sense that all institutional agents (Firms,
Households, Government and ’Rest of Economy’ sector) are both buyers and sellers.
• Columns represent buyers (expenditures) and rows represent sellers (receipts).
• SAMs form the backbone of Computable general equilibrium (CGE) Models, various
types of empirical multiplier models, and the Input-output model.
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Illustrative Open Economy SAM:
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What is Macroeconomics?
Macro economics is the study of the large economy as a whole. It was created to:
1. measure the health of the whole economy - Growth Policy: Nothing matters more in
the long run for the quality of life in an economy than its long run rate of economic
growth. Argentina vs. Sweden in economic growth in the 20th century. In 1929, for
example, Argentina was fifth in the world in the number of automobiles per capita. Yet
today Argentina is classified as a "developing" country. Why? Destructive economic
policies have retarded economic growth.
2. guide government polices to fix problems - Stabilization Policy : Business cycles.
Periods in which production grows and unemployment falls are called booms, or
macroeconomic expansions. Periods in which production falls and unemployment rises
are called recessions, or worse, depressions. Booms are to be welcomed; recessions are
to be feared.
Good macroeconomic policy can make almost everyone’s life better; bad macroeconomic
policy can make almost everyone’s life much worse.
macroeconomics and microeconomics differ in their view of how markets work.
Microeconomists assume that imbalances between demand and supply are resolved by
changes in prices. Rises in prices bring forth additional supply, and falls in prices bring
forth additional demand, until supply and demand are once again in balance.
Macroeconomists consider the possibility that imbalances between supply and demand can
be resolved by changes in quantities rather than in prices. That is, businesses may be slow
to change the prices they charge, preferring instead to expand or contract production until
supply balances demand. For all countries there are three major economic goals:
1. promote economic growth
2. limit unemployment
3. keep prices stable (limit inflation)
The first two are directly and immediately connected to people’s material well-being. The
third is an indicator and control that profoundly influence the economy’s direction.
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2.3 National income accounting 17 / 185
2.3 National income accounting
The purpose of national income accounting is to obtain some measure of performance of
the aggregate economy.
The national income accounts is an accounting framework used in measuring current
economic activity.
Definition 5. National income accounting is the science of measuring the aggregate output
and income of an economy. It is a measure of economic activity used to evaluate the overall
production performance of an economy often within a year.
The main measures of aggregate economic activity are:
1. Gross Domestic Product
2. Gross National Product
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1. Gross domestic product
Definition 6. GDP: Total value of final goods and services produced inside the boundary of
a country during a given period of time (usually a year)
• Includes both the produce of resident citizens ( Ethiopians) as well as foreign nationals.
• GDP focuses on where the output is produced.
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What is not included in GDP ?
1. Intermediate goods e.g price of finished car
2. non production transactions e.g.
financial transactions (nothing produced ) eg. stocks, bonds, real estate
used goods eg. old cars, used cloths
3. non-market and illegal activities e.g
things made at home... household production eg. unpaid work, black markets, drugs
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calculating GDP...3 ways
1. Expenditure approach - add up all the spending (by households, firms, the government
and the foreign sector) on final goods and services produced in a given year.
GDP = C+G+I+NX (1)
• C-consumption
• G-government spending..Purchases of Goods and Services
• I-investment (fixed assets like buildings, machinery )
• NX-net exports ( exports less Import )
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calculating GDP...3 ways
2. Income approach- add up all the income that resulted from selling all final goods and
services produced in a given year. GDP is obtained by summing up of the incomes of
all individuals in the country.
Income = R+W +ir+PR (2)
3. Value added approach The value added approach of GDP is given by:
GDP =
X
value addedi (3)
= Total value of all goods
−Total value of intermediate goods
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real vs. nominal GDP
Definition 7. nominal GDP is GDP measured in current prices. it doesn’t account for
inflation from year to year
Definition 8. real GDP is GDP expressed in constant or unchanging birr value. Real GDP
adjusts for inflation.
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what is inflation ?
inflation is rising general level of prices and it reduces the “ purchasing power" of money.
examples
• it takes $2 to buy what $ 1 bought in 1987
when inflation occurs, each dollar of income will buy fewer goods than before.
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Is inflation Good or Bad ?
In general , uncontrolled inflation is bad because banks don’t lend and people don’t save so
investment and GDP decrease.
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Deflation
deflaion -is decrease in general prices or a negative inflatio rate.
deflation is bad because people will hoard money (financial assets) this decreases consumer
spending and GDP
disinflation- prices increasing at slower rates
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2. Gross national product
Definition 9. Total value of goods and services produced by the nationals of the country
during a given period of time (usually a year)
• income of foreign nationals who reside with in the country are excluded.
• money value of everything produced with in Ethiopia + incoming money from outside
(Ethiopians) -outgoing money to abroad (foreigners)
• chuchu Taye goes to Italy, earn money, send to Ethiopia (Will be added in our own
GNP)
• Angelina Jolie comes to Ethiopia, earn money, send it back to her home (Will be
deducted from our GNP)
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2. Gross national product
• GNP focus on output produced by Ethiopian nationals
• suppose we have company A and B , which profit can be added
GNP = GDP +NX = GDP +(X−M) (4)
• (X-M)-net factor income
• X (Exports)-inward remittances of a country from nationals of the country abroad
• M (Imports)-outward remittances of a country from foreign nationals inside the country
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3. Net national product
net form of GNP
NNP = GNP −Depreciation (5)
percapitaincome =
NNP
population
(6)
Definition 10. Depreciation- means wear and tear of the goods produced
• If you buy a machine its value decreases over time. It may require money for
repairing.this is deducted in form of depreciation.
• Depreciation doesn’t add value to the current years produce and hence is deducted from
GNP
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4. NNP at factor cost
national income is calculated only on the basis of cost incurred to produce the goods and
services.
• the cost is the payments made to the factors of production which includes land, labour,
capital and entrepreneurship.
NNPatfactorcost = NNPatmarketprice (7)
−Indirect taxes+ subsidy
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5. personal income
Definition 11. personal income is the sum of all incomes recived by all people of a country
in one year
Personalincome = Nationalincome+net transfer payments (8)
net tranfer payments = transfer payments
−undistributed profits of corporates+
payments for social security provisions
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6. Disposable personal income
Definition 12. Disposable personal income means the income that is available to
individuals that can be disposed at their will.
• As direct tax is income that cannot be disposed by the individual.
Disposable income = personal income−directtaxes (9)
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summary
• GDP=C+G+I+NX
• GNP=GDP+ (X-M)
• NNP=GNP-Dep
• NNP at facor cost=NNP-indirect taxes + subsidy
• PI=national income + net transfer payments
• DPI=PI-direct taxes
GDP always greater than NDP (Depreciation different from zero)
GDP takes in to account newly produced capital goods
different assets have different depreciation rates
NDP takes in to account capital goods consumed in production process (depreciation).
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The Unemployment Rate –The number of unemployed people divided by the total labor
force–the sum of the unemployed and the employed.
The unemployment rate is the best indicator of how well the economy is doing relative to
its productive potential. Unemployment The unemployment rate is a key indicator of
economic performance. An economy with persistent high unemployment is wasting its
productive resources: its level of output is below its productive potential. Such an economy
surely has a lower level of social welfare than might easily be attained. Being unemployed
is not pleasant, not is fearing unemployment for no other reason than the turning of the
wheel of the business cycle. Keeping unemployment low is one of the chief goals of
macroeconomic policy.
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Chapter - 3
Education Data and Analysis 37 / 185
Activity 1:What is Education ?
Write down your own definition ..... (2 minutes)
Discuss it with your neighbour and agree on a definition ..... (3 minutes)
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Introduction
The impact of education quality on development goals: It is commonly presumed that
formal schooling is one of several important contributors to the skills of an individual and
to human capital. It is not the only factor. Parents, individual abilities and friends
undoubtedly contribute. Schools nonetheless have a special place, not only because
education and ‘kill creation’ are among their prime explicit objectives, but also because
they are the factor most directly affected by public policies.
It is well established that the distribution of personal incomes in society is strongly related
to the amount of education people have had. Generally speaking more schooling means
higher lifetime incomes. These outcomes emerge over the long term. It is not people’s
income while in school that is affected, nor their income in their first job, but their income
over the course of their working life.
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Economic growth and development
Definition 13. Economic growth is defined as the increase in the market value of the goods
and services produced by an economy over time.
It is conventionally measured as the percent rate of increase in real Gross Domestic
Product (IMF, 2012).At rates of 5-7% or more.
Definition 14. Economic development is the study of the economic aspects of the
development process in low-income countries.
It includes economic growth, distribution of income; levels of literacy and education
standards, levels of health care, quality and availability of housing, levels of environmental
standards, unemployment and poverty (Seid, 2000).
HW-1: Read reference materials to know more about economic growth and development.
HW-2: Define economics of education.
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Definition of Education
Definition 15. Education is the process of training and developing the knowledge, skill,
mind, character, etc, especially by formal schooling.
(Webster’s New World dictionary (1962))
Education in its general sense is a form of learning in which the Knowledge, skills, and
habits of a group of people are transferred from one generation to the next through
teaching, training, or research.
Education is “ Preparing a person to face everyday life".
In the broader sense, education means the process of development from “infancy to
maturity". So education is life and life itself is education. Education is nothing but
experiences of life.
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13

Benefit of Education
educational benefits to the individual
• Higher wages
• Greater chance of employment
• Better jobs (non-monetary in work rewards)
• Further opportunities to learn or train
benefit to the whole economy -because of educational spending on citizen’s education.
1. cultivation and discovering of talent
2. increased capability of people to adjust/change job opportunity
3. preparation of teachers
4. supply of skilled manpower for sustained economic growth
5. provisions of better citizens who have, let say the ability to appreciate and recognize a
wide range of cultural and other changes.
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Measuring the benefit of education
Three approaches
1. The simple correlation approach- by relating investment in education with that of the
generated income due to such investment
2. Residual approach-a large portion of economic growth remains unexplained when
classical inputs (land, labor and capital) are only considered. change in output due to
change in labor quality would then be left unexplained.
3. Direct return to education approach- based on the premise that education results in
direct measurable returns (income) to the individual and society.
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The cost of education
Direct cost
• The cost that individuals incur while attending schools. Example, tuition fees, cost of
books ,etc
• At macro level (specially for public schools) -
◆ the cost of building and maintaining schools,
◆ salaries of teachers and other staffs,
◆ the cost of supplies and equipment, etc.
Indirect cost (opportunity cost)
1. The income (let’s wage income) foregone by being in schools.
2. related to investment and spending on education - Higher spending on education
means lower spending in industrial and other sectors.
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Education- supply and Demand
How the amount of schooling received by an individual is determined?
1. demand for education -more important [Higher earnings in the modern sector
employment]
2. supply of education -important [quantity of school]
Figure 1: A market for education
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Ethiopian Education system
• The development of education in Ethiopia was deeply rooted in religion education
• modern public education appealed at the beginning of the 20th century.
• Especially, after Italo-Ethiopian war
• modern education began to develop very rapidly under the leadership of Emperor Haile
selassie.
• The modern education in Ethiopia is divided in two main sectors mainly the formal and
informal education
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Education System in Ethiopia
During the imperial regime educational polices were limited by proclamination.
After 1974 (Dergue regime) set new educational sector and objectives
1. Education for socialistic consciousness
2. Education for Production
3. Education of scientific research
with polices
1. Principle priorities in introducing primary education and eradicating illiteracy
2. practical education based on the societies need and for all age groups using adult
education
3. preparing the ground work to develop an educational system which is based on
centralization
4. to produce high and moderate level manpower
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A new education system and training policy
Since (1991-1993/94), TGE, formulate the following policies with objectives
1. Education for Production
2. Education of scientific consciousness
1. To develop the physical and mental potentialities and the problem solving capacity of
individual by expanding basic education for all.
2. To bring up citizens who come to take care of and utilize resources wisely
3. To bring up citizens who respect human rights and stand for the well-being of society
and stand for the truth, equality, justice
4. To bring up citizens who differentiate harmful things and practices.
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How does education influence the growth ?
• education as investment ... human capital
• critical (key) input for development, creativity and innovation
• the relation with other countries increase
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16

Structure of Education System
1. In Imperial regime = 4-4-4
• 4:yr primary education (1-4 grades)
• 4:yr middle education (5-8 grades)
• 4:yr high school (9-12 grades)
2. after 1974, the structure was = 6-2-4
• 2:yr junior secondary school (7-8 grades)
• 4: yr secondary education ( 9-12 grades)
3. Current educational system = 8-2-2
• 2:yr high school (9-10 grades)
• 2:yr preparatory school (11-12 grades) or Vocational education ( level 1-5)
Then a student can join Universities and Colleges for further improvement and to get a
degree, second degree, PhD,..
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Problems in primary education
Primary education was suffered from different things
1. disparity between regions and sexes
2. low enrollment
3. irrelevant curriculum
4.
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Basic indicators of secondary education
1. number of schools
2. number of teachers
3. number of rooms
4. number of students /teacher
5. number of student / school
6. number of student /class rooms
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17

Age distribution
Grade Age
Kinder garden (KG) 4-6 yrs
Primary education 7-14
Secondary education 15-18
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Major constraints in secondary education
1. disparity among regions and sexes
2. quality of teachers
3. budget allocations
4. Early marriage –The Ethiopian gender survey of women aged 15 to 49 years in seven
regions found that more urban (74.5
5. Sanitary facilities–Both primary and secondary schools may lack a water supply and
separate toilets for girls and boys.
In 2008/09, GER was 38.1% (boys =43.7%; girls = 32.4%) and NER was 13.5% (boys =
15.0%; girls = 11.9%).
In 2012/13, GER was 38.4% (boys = 39.9%; girls = 36.9%) and NER was 19.4% (boys =
18.8%; girls = 20.1%).
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Performance of Education System
1. Enrollment trend:both primary and secondary school enrollments have been declining
especially, in 1990’s. Reasons for the decline were lack of access to formal education
and high rate of population growth.
- current enrollments show improvements.
2. Trend of government expenditure on education: is showing a constant rise from the
1980’s up to now.
3. Impact of education on productivity: formal primary education from 1-6 grade is
improving productivity significantly.
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18

Most Illiterate Countries in the World
Table 1: Literacy rate (LR)
Rank Country LR (%)
1 South Sudan 27.00%
2 Afghanistan 28.10%
3 Burkina Faso 28.70%
4 Niger 28.70%
5 Mali 33.40%
6 Chad 35.40%
7 Somalia 37.80%
8 Ethiopia 39.00%
9 Guinea 41.00%
10 Benin 42.40%
11 Sierra Leone 43.30%
12 Haiti 48.70%
13 Senegal 49.70%
14 Gambia 51.10%
Rank Country LR (%)
15 Bhutan 52.80%
16 Pakistan 54.90%
17 Guinea-Bissau 55.30%
18 Mozambique 56.10%
19 Central African Republic 56.60%
20 Cote d’Ivoire 56.90%
21 Nepal 57.40%
22 Bangladesh 57.70%
23 Timor-Leste 58.30%
24 Mauritania 58.60%
25 Togo 60.40%
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Some information– Unesco’s statistics
• today we recognize literacy as a basic human right
• In 2013, 774 million illiterate people ( >15 years) was recorded
• 52% of them .... in West and South Asia
- In 2015 with 70.2% literacy rates
• Sub-Saharan Africa has 64% literacy rates
• About 493 million, are women. (2/3)
• 123 million people between 15 and 24 years of age who cannot read or write
- 76 million are women
- 54 million of them .. in only nine countries: India, Pakistan, Nigeria, Ethiopia,
Bangladesh, Democratic Republic of Congo, United Republic of Tanzania, Egypt and
Burkina Faso.
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Indicators of Educational Statistics
1. The public expenditure on education : This is the good measure of a country
commitment to education.
Definition 16. It is a percentage of public funding (government spending) for education out
of country’s total GDP.
• Proportion of GDP – 4.69% in 2010 of Eth
• Ranked 92 out of 195 countries
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...
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2.Male Literacy Rate ,youth
Definition 17. It is defined as the percentage of males aged 15 and above years and which
can understand, read and write.
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3.Female Literacy Rate
Definition 18. It is defined as the percentage of females aged 15 and above who can write,
understand, read the single statement about their daily activities.
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4.Total Number of Primary Schools
The number of primary schools in any country tends to reflect the country’s population.
• In more developed countries primary schools may be very large
• In the rural areas of the developed countries primary school may be a single room school
• The small number of secondary schools means that many children who do complete
primary school have no access to secondary schools.
schools number in 2008 number in 2012
primary schools 25,212 30,534
secondary schools 1,197 1,912
Higher
Vocational
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5. Enrolment Rate in Primary Level Education
Gross enrolment in primary education is defines as the total students in primary education
regardless of age divided by the population of the area which officially responds to primary
schooling.
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6. Female Enrollment rate in primary level education
. Gross enrollment rate in primary level education is defined as the enrollment of female in
primary education regardless of age, divided by the population of the age group which
officially corresponds to the primary level. FER= Total number of Female students
following primary education / Specified age group (Female aged 7-14) X 100
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7. Female Enrollment rate in Secondary level Education
Gross female enrolment rate is equal to Total number of females following secondary level
education / total number of females in the age group corresponds secondary level.
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8. Enrolment rate in higher level education
Gross enrolment in higher level education is defined as the total enrolment in higher
education regardless of age and expressed as a percentage of the population.
Country Canada USA Ethiopia
Rank 1 2 50
% age 87 81 1
120 countries ranked in the period 1996.
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Indicators
9 Female enrollment rate in higher level education
10. Number of Primary Level Teachers
11. Number of Secondary Level Teachers
12. Number of Higher level educational Teachers
13. Pupil to teacher ratio in primary level education
14. Pupil to teacher ratio in secondary level education -is the number of pupils enrolled in
secondary school divided by the number of secondary school teachers.
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Cost benefit analysis
Initial outlay and future return
Example 1. suppose that a hypothetical investment project requires an initial outlay of
birr 1000 in the first year and provides returns of birr 250 per year for the next 6 years.
How do you suggest this investment by using interest rate 10% which is also called discount
rate ?
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22

solution
• n=6, r=10%,
• discount factor= 1
(1+r)n
year disc. fac Expense Income
1 ,n=0 1 1000 250 * 0=0.00
2,n=1 0.909 — 250 *0.909=227.25
3 0.826 — 206.50
4 0.751 — 187.75
5 0.683 — 170.75
6 0.621 — 155.25
7 0.564 — 141
— — 1000 1088
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solution —
1. Net present value of the investment (NPV)=total income –initial outlay
=1088-1000=88 Birr
2. Benefit cost ratio (BCR)=total income / initial outlay =1088/1000=1.088
3. Interest rate of return (IRR)= NPV * 100% /Initial outlay =(BCR-1)100%=0.088
*100%=8.8%
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chapter 4
Health Data and Analysis 71 / 185
4.1 What is a survey?
Definition 19. A survey is any activity that collects information in an organised and
methodical manner about characteristics of interest from some or all units of a population
using well-defined concepts, methods and procedures, and compiles such information into a
useful summary form.
• A survey usually begins with the need for information where no data – or insufficient
data – exist.
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4.1.1 Statistical health survey
• Conducted for many reasons
• main reason –is to determine the health needs of a community
• subjects of health survey are members of the general public and uses a health service
• all persons are –consumers of a health service
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4.1.2 Uses of health survey
Are used to understand ........... of consumers of a health services
1. knowledge
2. attitude
3. practice
4. satisfaction / dissatisfaction
5. utilization of health services
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4.1.3 Steps for planning a health survey
1. Make a written statement of the purpose of the survey
2. formulation of the Statement of Objectives;
3. selection of a survey frame (specify the target population);
4. list the variables
5. review existing literature (pertinent data)
6. outline the methods of data collection;
7. establish the time frame
8. questionnaire design;
9. pretest the questionnaire
10. obtain informed consent
11. select subjects for the sample;
12. collection of data
13. data capture and coding, editing and imputation;
14. data analysis;
15. repor the findings -data dissemination, documentation.
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1.Purpose
• should be carefully defined and be well stand in two or more sentences
• will aid your thinking and will help to come out the subsequent steps
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2. Objective
1. Descriptive survey –seeks to estimate one or more characteristics of population. That is
its objectives
2. Analytical survey – tries to examine relationships among some specified characteristics.
That is its hypothesis
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3. Target population
The target population is that group of people from whom inferences can be drawn. In
other words these are the people that the study will include.
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4. Variables
• Once your target population is defined, list the variables that are to be assessed on each
element
• variables should be listed prior, since for those variables the researcher is going to find
the estimates and the relationships.
Example 2. a persons weight, blood pressure, smoking status, etc. These are
characterstics of an individual.
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5. Review
Review and refer to different literature so that you will get good thought of well known
study
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6.Decide how to collect data
The method used in collecting data vary according to the nature of investigation and
availability of resources (money, time, skilled manpower, etc) There are two sources of data
1. primary source
2. secondary source
To collect primary data one can use
• Direct observation
• personal interview
• enumeration method
• mailed questionnaire
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7. Time frame
• It is necessary to establish a time frame to realistically schedule events
• Plan back up procedures and personnel’s to avoid major delays
• It is good to have some trained interviewer on all.
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8. Design a questionnaire
Definition 20. questionnaire is a form which contains well proposed questions along with
instructions on how to fill the form and covering letters, which explains the purpose of the
study and politely requests full–cooperation for quick reply
• Such a form is to be filled by the respondents only.
• questions need to be carefully prepared so as not to confuse the respondents or arose
extra attitude.
• questions should be precise, avoid ambiguity and leading questions
• questions may be multiple choice, open ended, complete, etc
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Principles of questionnaire
The key principles to keep in mind wile you are preparing a questionnaire are the following.
A questionnaire should be
1. easy to the respondent to read, understand and answer
2. motivate the respondent to answer
3. designed for efficient data processing
4. have a well defined professional appearance
5. designed to minimize missing data (non response rate)
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9. Pretest the questionnaire
• A pretest will identify questions that respondents tend to miss interpret , omit or
answer inappropriately.
• The correct methodology should be utilized /used in the actual survey
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10. Obtain informed consent
• Prior to conducting a research study, it is essential to obtain institutional approval.
• It creates a favorable climate to conduct a research using a human subjects.
Example 3. To conduct a health survey about children, we need the permission of parents.
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11. Select a Sample
Select a sample in such away that the sample should
• give valid statistical inferences, regarding the survey population
• be representative of the target population
• minimize the sampling bias
• minimize the resource
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12. Collecting the data
• With completed and pretested questionnaire you are ready to collect data.
• This step requires careful planning and supervision to ensure data of good quality.
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13. Entering data on to computer
Editing data is analogous to editing news papers copy. The editor checks for
1. Missing data
2. Inconsistencies
3. Duplication
4. problems that can be reminded
• Editing data should be done as soon as possible after the data collection
• to permit computerized system analysis of data, the values of the variables should be
changed in to numerical frame which is called coding.
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Coding
1. Male =1 and Female =O
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14. Analyze data
After data have been collected, edited, coded and key entered, they are almost ready for
analysis.
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15. Report the findings
1. The report should be begin with back ground information about the target population.
- It should indicate the specific objectives that the survey seeks to accomplish.
2. A “methods" section should describe the
• target population
• sampling design
• test instruments and other statistical tools
3. The “result" section should describe the
• findings
• possible future implications
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4.1.4 Evaluation of ..S...H... S... report
• A valuable skills to develop a report is the ability to critically read (peer review) and
evaluate research literature.
• Every user of literature by doing critical analsis is carrying peer review to its ultimate
steps.
• some research literatures may have poor quality.
A poor research literature may contain
1. inconsistencies
2. poor grammar
3. error in questionnaire
4. muddy logic, etc
- this problem s chronic n much scientific writings.
- researchers should avoid possible bias while writing a research report.
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Some possible biases are
1. Observer bias
2. Sampling bias
3. Selection bias
4. Response bias
5. Dropout bias
6. Memory bias
7. Participant bias
8. Lead time bias
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Keys in peer review
The following questions should be considered while reviewing research report
1. Research objectives – Does the research report clearly state its objectives ?
2. Study design – What methods of study was used ? Was sample selection random and
appropriate to the study design ?
3. Data collection – Were criteria for diagnosis precisely defined ? Were end points
(outcomes) clearly stated ? Were research instruments standardized ?
4. Description of results – Are the results presented clearly and quantitatively ? Do tables
and figures agree with each other or not ?
5. Data analysis – Does the report address the statistical significance of the research ?
6. Conclusion – Are the findings justified by the data ?
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4.2 Definition of health
Definition 21. Health is the state of complete physical, mental and social well-being and
not merely the absence of disease or infirmity (WHO, 1948)
- include the ability to lead a “socially and economically productive life."
Definition 22. Health is a resource for everyday life, not the objective of living; it is a
positive concept, emphasizing social and personal resources as well as physical capabilities
(WHO, 1984).
- Health cannot be measured in exact measurable forms
- framed in terms of factors that promote ill health- all the antithesis of health.
• illness (or lack of health),
• consequences of ill-health (morbidity, mortality)
• economic, occupation & domestic factors
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4.2.1 Indicators of health
With the goal of good health in mind, think of an indicator as “. . . a measure that helps
quantify the achievement of a goal.” -Mark Friedman
• Indicator also termed as Index or Variable is only an indication of a given situation or a
reflection of that situation.
• Indicators help to measure the extent to which the objectives and targets of a
programme are being attained.
Definition 23. Health Indicator is a variable that reflects the state of health of persons
in a community.
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Two broad indicators of health
1. Health status indicators measure different aspects of the health of a population.
Example 4. life expectancy, infant mortality, disability or chronic disease rates.
2.Health determinant indicators measure things that influence health.
Example 5. diet, smoking, water quality, income and access to health services
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4.2.2 Characteristics of Indicators
Indicators have been given scientific respectability
1. Valid – they should actually measure what they are supposed to measure.
2. Reliable – the results or answers should be the same when measured by different
people in similar circumstances.
3. Sensitive – they should be sensitive to changes in the situation concerned.
4. Specific – they should reflect changes only in the situation concerned.
5. Feasible – they should have the ability to obtain data when needed.
6. Relevant – they should contribute to the understanding of the phenomenon of interest.
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4.2.3 Uses of indicators of health
1. Measurement of the health of the community.
2. Description of the health of the community.
3. Comparison of the health of different communities.
4. Identification of health needs and prioritizing them.
5. Evaluation of health services.
6. Planning and allocation of health resources.
7. Measurement of health successes.
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4.2.4 Classification of health indicators
1. Mortality Indicators
2. Morbidity Indicators
3. Disability Rates
4. Nutritional Indicators
5. Health Care Delivery Indicators
6. Utilization Rates
7. Indicators of Social And Mental Health
8. Environmental Indicators
9. Socio-economic Indicators
10. Health Policy Indicators
11. Indicators of Quality of Life
12. Other Indicators HFA, MDG, SDG
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1. Mortality indicators
1.1 Crude Death Rate
1.2 Expectation of life
1.3 Infant mortality rate
1.4 Child mortality rate
1.5 Under-5 mortality rate
1.6 Maternal(puerperal) mortality rate
1.7 Disease specific mortality rate
1.8 Proportional mortality rate
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1. Mortality indicators....
• Crude Death Rate is considered a fair indicator of the comparative health of the people.
• It is defined as the number of deaths per 1000 population per year in a given
community, usually the mid-year population
• The usefulness is restricted because it is influenced by the age-sex composition of the
population, socioeconomic and socio-cultural environment of the communities.
• CDR Ethiopia ..... deaths/1,000 population
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• Expectation of life is the average number of years that will be lived by those born alive
into a population if the current age specific mortality rates persist.
• It is a statistical abstraction based on existing age-specific death rates.
• Estimated for both sexes separately.
• Good indicator of socioeconomic development
• Life expectancy at birth:
- Male: ... years
- Female: ... years
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• Infant mortality rate:The ratio of deaths under 1 year of age in a given year to the total
number of live births in the same year, usually expressed as a rate per 1000 live births
• Indicator of health status of not only infants but also whole population &
socioeconomic conditions
• Sensitive indicator of availability, utilization & effectiveness of health care, particularly
perinatal and postnatal care.
• Current IMR :Ethiopia-.../1000 live birth
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• CHILD MORTALITY RATE: The number of deaths at ages 1-4 years in a given year,
per 1000 children in that age group at the mid-point of the year.
• Correlates with inadequate MCH services, malnutrition, low immunization coverage and
environmental factors
• Other indicators are Perinatal mortality rate, Neonatal mortality rate, Stillbirth rate,
etc.
• Correlates with inadequate antenatal care and perinatal care.
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• Under-5 Mortality rate: Defined as no. of deaths occurring in the under-5 age group per
1000 live births.
• Reflects both infant and child mortality
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• Maternal Mortality Ratio: Ratio of number of deaths arising during pregnancy or
puerperal period per 100,000 live births
• Accounts for the greatest number of deaths among women of reproductive age in
developing countries.
• Current MMR – Ethiopia -.../100000 live births
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• Disease Specific Death Rate is mortality rate which is computed for specific diseases.
• Proportional Mortality Rate is the proportion of all deaths attributed to the specific
disease
Example 6. Coronary heart disease causes 25 to 30 % of all deaths in developed world.
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2. Morbidity indicators
Morbidity Indicators reveal the burden of ill health in a community, but do not measure
the sub clinical or in apparent disease states.
2.1 Incidence & Prevalence
2.2 Notification rates
2.3 Attendance rates at OPD, health centers
2.4 Admission, readmission and discharge rates
2.5 Duration of stay in hospital
2.6 Spells of sickness or absence from work or school
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2. Morbidity indicators....
• Incidence and Prevalence
• Incidence: The number of new events or new cases of a disease in a defined population,
within a specified period of time.
Example 7. The incidence of Tuberculosis in India is 176 per 100000.
Prevalence: The total number of all individuals who have an attribute or disease at a
particular time divided by population at risk of having attribute or disease at this point
of time.
Reflects the chronicity of the disease.
Example 8. The prevalence of Tuberculosis in Ethiopia is .../ 100000 population.
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• Notification rates is calculated from the reporting to public authorities of certain
diseases
Example 9. yellow fever , poliomyelitis
- They provide information regarding geographic clustering of infections, quality of
reporting system etc.
Attendance rates at OPDs and at health centers.
Admission, Re-admission and discharge rates.
Duration of stay in hospital.
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• Spells of sickness or absence from work or school.
- reflects economical loss to the community
• Hospital data constitute a basic and primary source of information about diseases
prevalent in the community.
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3. Disability Rate
Disability Rates are of two categories
3.1. Event-type indicators
• Number of days of restricted activity
• Bed disability days
• Work loss days (or school loss days) within a specified period
3.2. Person-type indicators
• Limitation of mobility e.g. confined to bed, confined to house, special aid in getting
around.
• Limitation of activity e.g. limitation to perform the basic activities of daily living
(ADL) e.g. eating, washing, dressing, etc.
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3. Disability Rate....
• Sullivan’s Index :refers to “expectation of life free of disability”.
• Sullivan’s Index = life expectancy of the country - probable duration of bed disability
and inability to perform major activities.
• It is considered as one of the most advanced indicators currently available.
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• HALE is Health Adjusted Life Expectancy.
• Based on the framework of WHO’s ICIDH (International Classification of Impairments,
Disabilities, and Handicaps )
• Based on life expectancy at birth but includes an adjustment for time spent in poor
health.
• It is the equivalent number of years in full health that a newborn can expect to live
based on current rates of ill-health and mortality.
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• DALYs: Disability Adjusted Life Years.
• It is defined as the number of years of healthy life lost due to all causes whether from
premature mortality or disability.
• It is the simplest and the most commonly used measure to find the burden of illness in
a defined population and the effectiveness of the interventions
• Two things needed to measure DALYs are
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- Life table of that country, to measure the losses from premature deaths
- Loss of healthy life years resulting from disability; the disability may be permanent
(polio) or temporary (TB, leprosy), physical or mental.
• DALY = years of life lost + years lost to disability
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Uses of DALYs
• To assist in selecting health service priorities
• To identify the disadvantaged groups
• Targeting health interventions
• Measuring the results of health interventions
• Providing comparable measures for planning & evaluating programmes
• To compare the health status of different countries
Note: One DALY is one lost year of healthy life
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QALY is Quality Adjusted Life Year.
• It is the most commonly used to measure the cost effectiveness of health interventions .
• It estimates the number of years of life added by a successful treatment or adjustment
for quality of life.
• Each year in perfect health is assigned a value of 1.0 down to a value of 0.0 for death.
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4. Nutritional status indicators
Nutritional Status is a positive health indicator. Newborns are measured for their i. Birth
weight ii. Length iii. Head circumference. They reflect the maternal nutrition status
4.1 Anthropometric measurements of preschool children, eg
- weight and Height -measures acute malnutrition,
- MUAC(Mid-arm circumference) - measures chronic malnutrition
4.2 Heights of children at school entry
4.3 Prevalence of low birth weight
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4. Nutritional status indicators....
• Underweight: weight for age < -2 standard deviations (SD) of the WHO Child Growth
Standards median
• Stunting: height for age < -2 SD of the WHO Child Growth Standards median
• Wasting: weight for height < -2 SD of the WHO Child Growth Standards median
• Overweight: weight for height > +2 SD of the WHO Child Growth Standards median
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• Growth Monitoring of children is done by measuring weight-for-age, height-for-age,
weight-for- height, head & chest circumference and mid-arm circumference.
• In adults Underweight, Obesity and Anemia are generally considered reliable nutritional
indicators.
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5. Health care delivery indicators
These indicators reflect the equity of distribution of health resources in different parts of
the country and of the provision of health care.
5.1 Doctor-population ratio
5.2 Doctor- nurse ratio
5.3 Population-bed ratio
5.4 Population per health/sub center
5.5 Population per traditional birth attendant
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6. Utilization rates
Utilisation Rates or actual rates is expressed as the proportion of people in need of a
service who actually receive it in a given period, usually a year
• It depends on availability & accessibility of health services and the attitude of an
individual towards health care system
• They direct attention towards discharge of social responsibility for the organization in
delivery of services.
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6. Utilization rates....
6.1 Proportion of infants who are fully immunized against EPI disease
6.2 Proportion of pregnant women who receive ANC, or have their deliveries supervised by
a Trained birth attendance
6.3 Percentage of the population using the various methods of family planning
6.4 Bed-occupancy rate
6.5 Average length of stay
6.6 Bed turn over ratio
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7.Indicators of social and mental health
7.1 Suicide rate
7.2 Homicide rate
7.3 RTA-road traffic accident
7.4 Alcohol and drug abuse
7.5 Smoking
7.6 Consumption of tranquilizers
7.7 Obesity ,battered-baby syndrome, other crime, domestic violence, juvenile delinquency
These indicators provide a guide to social action for improving the health of people. Social
and mental health of the children depend on their parents. E.g. Substance abuse in orphan
children
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8. Environmental indicators
These reflect the quality of physical and biological environment in which diseases occur and
people live.
The most important are those measuring the proportion of population having access to
safe drinking water and sanitation facilities.
- These indicators explains the prevalence of communicable diseases in a community.
8.1 Pollution of air and water
8.2 Radiation
8.3 Solid waste
8.4 Noise exposure
8.5 Exposure to toxic substance in food or drink
8.6 Proportion of population having access to safe water
8.7 Sanitation facility
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8. Environmental indicators....
• According to WHO an improved source of drinking water includes water piped into
dwelling/yard/plot, water available from public tap or stand pipe or a tube well or
borehole, or a protected well or spring
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9. Socio-economic indicators
These do not directly measure health but are important in interpreting health indicators.
9.1 Rate of population increase
9.2 Per capita GNP
9.3 Level of unemployment
9.4 Dependency ratio
9.5 Literacy rates
9.6 Family size
9.7 Housing– the number of persons per room
9.8 Per capita calorie availability
Total(Dependencyratio) = no.ofpeopleaged0−14andthoseaged65andover
numberofpeopleaged15−64 ×100
Countries with favorable socioeconomic indicators have reported less health related
problems.
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10. Health policy indicators
The single most important indicator of political commitment is allocation of adequate
resources. The relevant indicators are
1. Proportion of GNP spent on health services
2. Proportion of GNP spent on health related activities (including water supply and
sanitation, housing and nutrition, community development)
3. Proportion of total health resources devoted to primary health care.
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Health System Performance Indicators
1. Access (additional)
• – Trends in health insurance enrollment, range of benefits, exclusions, premiums
• Rural health provider supply, linguistic or cultural barriers to getting care
2. Cost
• Total health expenditures
• Health as share of Gross Domestic Product (GDP)
• Prescription drug costs
• Payments to hospitals, facilities
• Comparisons of resources used per patient between hospitals/areas
3. Quality of care
• Effective care – receipt of recommended screenings, treatment, readmission rates.
• Patient Safety – medical error
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11. Indicators of quality of Life
- Life expectancy is now less important.
- The Quality of Life has gained its importance.
11.1 PQLI (Physical quality of Life Index) – It consolidates infant mortality, life expectancy
at age of 1 year and literacy.
- For each component the performance of individual country is placed on a scale of 1 to
100.
- The composite index is calculated by averaging the three indicators giving equal weight
to each of them.
- The PQLI does not consider the GNP.
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11. Indicators of quality of Life....
11.2 Human Development Index – It is defined as a composite index combining indicators
representing 3 dimensions :
1 Longevity( life expectancy at birth)
2 Education (mean and expected years of schooling)
3 Gross national income (GNI) per capita
- The result is placed on the 0 to 1 scale
- HDI for Ethiopia was ....... (UNDP-2015)
- HDI ranking of Ethiopia is ......
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12. Others
A. Social indicators: Given by United nation statistical office 12 in number
B. Basic needs indicators:
• re used by ILO
• includes :Calorie consumption, access to water, life expectancy, deaths due to diseases,
literacy, doctors and nurses per population, rooms per person, GNP per capita
C. Health for All indicators
D. MDGs
E. SDGs
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•
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12.A) Social indicators
1. Population
2. Family formation
3. Families & households
4. Learning & educational services
5. Learning activities
6. Distribution of income
7. Consumption & accumulation
8. Social security & welfare services
9. Health services & nutrition
10. Housing & its environment
11. Public order & safety; time use
12. Social stratification & mobility
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12.C) Health for All indicators
For monitoring the progress towards the goal of Health For All by 2000 , the WHO had
listed the following four categories of indicators.
1 Health policy indicators
- Political commitment to HFA
- Resource allocation
- Degree of equity of distribution of health services
- Community involvement
- Organisational framework and managerial process
2 Social and economic indicators related to health
- Rate of population growth
- GNP or GDP
- Income distribution
- Work conditions
- Adult literacy rate
- Housing
- Food availability
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12.C) Health for All indicators.....
3 Indicators for the provision of health care
- Availability
- Accessibility
- Utilisation
- Quality of care
4 Health status indicators
- Low birth weight
- Nutritional status and psycho social development of children
- Infant mortality
- Child mortality rate (1-4yrs)
- Life expectancy at birth
- Maternal mortality rate
- Disease specific mortality
- Morbidity – incidence and prevalence
- Disability prevalence
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MDGs
• Adopted by United Nations in year 2000.
• Opportunity for concerted action to improve global health.
• The 8 MDGs (Millennium development goals ), break down into 21 quantifiable targets
that are measured by 60 indicators.
Goal 4: Reduce child mortality
- 13.Under 5 mortality rate
- 14.Infant mortality rate
- 15.Proportion of 1 year old immunized against measles
Goal 5:improve maternal health
- 16.Maternal mortality ratio
- 17.Proportion of birth attended by skilled birth personal
Goal 6:combat HIV/AIDS , Malaria and other diseases
- 18.HIV prevalence among young people
- 19.Condom use rate
- 20.No.of children orphaned by HIV/AIDS
- 21.Prevalence and death rates associated with malaria
- 22. Proportion of population in malaria risk areas using prevention
- 23.Prevalence and death rates associated with TB
- 24.Proportion of TB cases detected and cured.
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SDGs
.................
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Summary
• Health not measured directly but using indicators.
• Indicator should be valid, sensitive, specific, reliable, relevant and feasible.
• Used in measuring, describing, comparing, identifying health needs and planning and
evaluation of health services.
• No single comprehensive indicator of a nation’s health.
• Each available indicator reflects an aspect of health.
• Search for a single global index of health status continues.
• Use of multiple indicators arranged in profiles or patterns used to make comparisons
between areas , regions and nations.
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4.3 The Role of health
• The two human capital issues are health and education.
• Education is important to increase human capital by increasing skill
• Vital roles played by health are : Health
1. is central to well being
2. is important to broaden human capabilities which is essential for economic
development
3. increases labor productivity
4. reduces the rate of depreciation of education capital during working life
5. is important even for education to be successful
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4.3.1 Role of health in development
• Like education , health service is closely related to economic development, why?
Because:
1. Primarily health is an important factor to affect school attendance
2. Health has a positive contribution in realizing the return to education over life span.
- the effect of health is to increase life span.
- Increased life span, in turn, enables economies to enjoy the part of expenditure on
education as a result of longer life span that raises the return to education.
3. Better health at any time during working life may lower the rate of depreciation of
education capital and increasing productivity of labor.
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Combined effect
Effect of education and health on economic development:
1. Many health programs rely on basic skills learned at schools like personal hygiene and
sanitation. Thus, general education capital improves the return to investment in health.
2. Education is important for the formation and training of health personnel based on the
government arguments.
Note : The positive impact of health may only be real if the population growth rate is of
optimal.
Activity 1. If not optimal what happen ?
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If the population growth rate is above optimal, then investment in health may harm
economic development, why? Because:
1. Increase in investment on health implies decrease in death rate
2. Decrease death rate without a decrease in birth rate mean large population growth
3. If such growth is above optimal, then it implies a decline in per capita income.
4. Moreover, health programs particularly tend to decrease infant mortality rates on the
one hand and increasing life expectancy on the other.
- In this case, the proportion of unproductive population (below the age of 15 and above
the age of 64) is increased.
- When as compared to productive population, thus, there will be more mouths ready to
eat than more hands to work.
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4.3.2 Two kinds of health improvement
- When compared to productive population, thus, there will be more mouths ready to
eat than more hands to work.
• The elimination of those diseases that only weakens but no kill or which kill slowly.
- Example: malaria
- decrease of such disease may increase productivity much more than population and
hence increasing per capita income
• The elimination of diseases from which one either recovers or dies quickly, example
yellow fever. Thus, decrease of such disease will increase population without much
increase productivity.
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4.3.3 Basic Health Indicators
1. Rural drug vendor : The lowest level of medicinal retail outlet that dispenses medical
preparations as approved for this level by the Ministry, but does not engage in
compounding preparation or manufacturing of any medical preparation.
2. School enrollment : The number of students who are enrolled and attend various
educational institutions.
3. Sex ratio : The number of males in a population or specific sub-population, divided by
corresponding number of females, multiplied by 100.
4. Special clinic : Provides specific medical interventions such as medical, surgical,
obstetric gyn, ophthalmology, etc. and is assisted by specialists in various disciplines.
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5. Surviving infants : Infants who survive to their first birth day
6. Total fertility rate : The average number of children that would be born per woman of
all women lived to end of their childbearing years and born children according to a
given set of age specific fertility rates.
7. Under-five mortality : The probability of dying between birth and age five per 1000
live births in a given year.
8. Under 5 children : Under 5 year children visits to health institution for monitoring of
growth and development, screening of risk cases, and for management of disease or mal
development.
9. Vital events : Births, deaths, marriages and divorces.
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10. Health post : One of the satellite facility in the Primary Health Care Unit
11. Health stations : The smallest health units in the conventional Health Service
structure and are staffed with 1-3 health assistants.
12. Higher clinic : Staffed at least by a general medical practitioner, a specialist and
assisted by various specialists serve for general outpatient clinics. For emergency and
delivery this clinic has up to 5 beds.
13. Hospital : An establishment with at least 25 beds that provides general medical care
round the clock. It is at least equipped with basic laboratory, X-ray and basic
treatment facilities. It is staffed with at least one medical practitioner.
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14. Household : A single person living alone or a group voluntarily living together, having
common housekeeping arrangements for supplying basic living needs, such as principal
meals. The group may consist of related or unrelated persons.
15. Infant mortality rate : The ratio of the number of deaths under one year of age
occurring in a given year to the number of births in the same year. Also used in a more
rigorous sense to mean the number of deaths that would occur under one year of age in
a life table with a radix of 1,000.
16. Infant mortality : The probability of dying between birth and age one per 1000 live
births in a given year.
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17. In-patient : A patient who is admitted and occupy bed in a health institution for
diagnosis and/or treatment.
18. Life Expectancy at Birth : The average number of years a newborn infant can expect
to live under current mortality levels.
19. Delivery attended : The service given for a pregnant woman during labor;
management of normal delivery and detection of complications, management of risk
cases in labor and complicated cases
20 Demography : The study of population and its characteristics, with reference to such
factors as size, age structure, density, fertility, mortality, growth and social and
economic variables.
STAT lecture 2017 – 152 / 185
Cont...
21 Discharged patient : The number of patients who are discharged from the health
institution (whether it is dead or alive) after being diagnosed and/or treated.
22 Drug shop : Shall mean an establishment which offers for sale to the public. Such
medical preparations, cosmetics nursing and sanitary articles, dietetic products and
other articles as approved for the purpose by the Ministry but does not engage in the
compounding preparation or manufacture of any medical preparation.
23 Enrollment ratio : The number of students attending a given school, divided by the
total number of persons of the age normally in school at that level.
STAT lecture 2017 – 153 / 185
47

24 Fully immunized : Surviving infants who receive all doses of infant antigens.
25 General fertility rate : The number of births occurring in a given year per 1000 women
in the reproductive ages (i.e. women aged 15-49).
26 Gross Enrollment Ratio : The total enrolment in a given level of school regardless of
age per 100 children of that schools age.
27 Health center : Establishment which provides both preventive and curative
out-patient care. Health Centre is also responsible for training CHAs & TBAs.
28 Age dependency ratio : The ratio of persons in the “dependent” ages (under 15 and
older than 64 years) to those in the “economically productive” ages (15-64 years) in a
population.
STAT lecture 2017 – 154 / 185
Cont ...
29 Antenatal coverage : A coverage is proportion of pregnant women attended, at least
once during the current pregnancy, by a health professional, for reasons related to
pregnancy.
30 Average household size : The mean number of members per household
31 Child mortality : The probability of dying between exact age one and the fifth birth
day per 1000 children surviving to the first birth day.
32 Child woman ratio : The number of children under age five per 1,000 women of
childbearing age in a given year. This measure is used as a rough fertility indicator,
especially when detailed data on births are lacking.
STAT lecture 2017 – 155 / 185
Cont ...
33 Contraceptive Accepters rate : The proportion of women of reproductive age (15-49
years ) who are accepting a modern contraceptive method ( new and repeat acceptors).
34 Crude birth rate : The number of births in a population during a specified period
divided by the number of person-years-lived by the population during the same period.
It is frequently expressed as births per 1,000 population
35 Crude death rate : The number of deaths in a population during a specified period
divided by the number of person-years-lived by the population during the same period.
It is frequently expressed as births per 1,000 population.
STAT lecture 2017 – 156 / 185
48

Chapter 5
Labour and employment status 157 / 185
5.1. Man power
• Man power means physical, mental, and brain power which include skill, aptitude,
proficiency, and training & education.
• man power in different sense is treated as laborer, personnel or employees.
• The population and its age-sex composition / distribution determines the quantity of
labor.
• the education, training and motivation determine the quality of man power.
• with qualitative improvement labor force becomes human capitals
STAT lecture 2017 – 158 / 185
Man power planning
• man power panning doesn’t mean only providing employment to the unemployed but it
also include the planning to make the people employable.
• man power supply is the special supply. there is trade between work & leisure
• the fixed time of an individual, a family or , a household can be allocated in to two.
1 work– labor market activity. work is a time devoted to a paying job
2 leisure– non market activity. leisure includes all types of activities for which the person
not get paid.
Example 10. rest, education, relaxation, etc
STAT lecture 2017 – 159 / 185
Labor statistics
• It has two issues
• Socio -economic issue
• qualitative / quantitative importance issue
• the two sets of information are necessary to determine the optimal distribution of
individuals time between work and leisure
• the aggregate of labor service available to the society depends on the following
1. population size–birth, death, migration
2. labor force participation rate
3. length of the work week
4. the quantity of labor force– population size, length of a week
STAT lecture 2017 – 160 / 185
49

Allocation of time
• An individual /household/ family allocate their time in
1 household perspective –time can be sold to a labor market to obtain the monetary
income required to purchase goods and services (labor market time) or can be used in
actual consumption of goods and services (consumption time). Also used in house hold
production (production time).
2 multiple use of time
STAT lecture 2017 – 161 / 185
Labour force
Definition 24. The labor force is a region’s combined civilian workforce ,consists of those
who are 1. employed and 2. unemployed but actually seeking a job.
• Potential labor force means, the labor which are ready to (able to )render their services.
• The labor force of a country consists of everyone of working age ( typically between
(15– 65) .
• People not counted include : students, retired people, stay-at-home parents, people in
prisons, people employed in jobs or professions with unreported income, as well as
discouraged workers who cannot find work.
STAT lecture 2017 – 162 / 185
Labor force participation rate
Definition 25. The labor force participation rate is the ratio between the labor force and
the overall size of their cohort (national population of the same age range).
Definition 26. An unemployed person is defined as a person not employed but actively
seeking work.
Definition 27. The unemployment rate is calculated by dividing the number of unemployed
persons by the size of the workforce.
In the West during the later half of the 20th century, the labor force participation rate
increased significantly, largely due to the increasing number of women entering the
workplace.
STAT lecture 2017 – 163 / 185
50

Labor force participation rate
• The decline in participation rate for the male are attributed to
1. Raising real wage and earning
2. the availability of public and private pensions
3. creates access to disabled person
4. Aged earning profiles
• LFPR of female is increasing because
1. Raising to real wage to women
2. changing performance and attitude
3. raising the productivity in the house hold
4. declining birth rate
5. raising divorce rate
6. expanding job accessibility
7. attempts to attain well living standards
STAT lecture 2017 – 164 / 185
Calculating LFPR
• The labor force participation rate is a key component in long-term economic growth,
almost as important as productivity.
Notation
• E=number employed , U= unemployed , LF= Labor force= E+U
• LFPR = labour force participation rate
• LFpop=labor force population ( men and women aged 15-64)
LFPR =
Actuallaborforce
potentiallaborforce
×100% =
E+U
LFpop
100 (10)
Rate of employment= (E/LF) *100
Rate of unemployment =(U/LF)* 100
STAT lecture 2017 – 165 / 185
Calculating LFPR
• The labor force participation rate explains how an increase in the unemployment rate
can occur simultaneously with an increase in employment.
• If a large amount of new workers enter the labor force but only a small fraction become
employed, then the increase in the number of unemployed workers can outpace the
growth in employment.
STAT lecture 2017 – 166 / 185
51

5.2 Formal and informal labor
Definition 28. Formal labor is any sort of employment that is structured and paid in a
formal way.
Definition 29. Informal labor is labor that falls short of being a formal arrangement in law
or in practice. Informal labor can be paid or unpaid and it is always unstructured and
unregulated.
• Unlike the informal sector of the economy, formal labor within a country contributes to
that country’s gross national product.
• Formal employment is more reliable than informal employment.
• Generally, formal employment yields higher income and greater benefits and securities
for both men and women.
STAT lecture 2017 – 167 / 185
Informal labor in the world
• The contribution of informal laborers is immense.
• Informal labor is expanding globally, most significantly in developing countries.
• According to a study done by Jacques Charmes, in the year 2000 :
- informal labor made up 57% of non-agricultural employment, 40% of urban
employment, and 83% of the new jobs in Latin America.
- informal labor made up 78% of non-agricultural employment, 61% of urban
employment, and 93% of the new jobs in Africa.
• Particularly after an economic crisis, laborers tend to shift from the formal sector to the
informal sector.
- This trend was seen after the Asian economic crisis which began in 1997.
STAT lecture 2017 – 168 / 185
52

5.3 Informal labor and gender
• Gender is frequently associated with informal labor.
• Women are employed more often informally than they are formally, and informal labor
is an overall larger source of employment for females than it is for males.
• Women frequent in the informal sector of the economy through occupations like
home-based workers and street vendors.
• The Penguin Atlas of Women in the World shows that in the 1990s,
- 81% of women in Benin were street vendors, 55% in Guatemala, 44% in Mexico, 33% in
Kenya, and 14% in India.
• Overall, 60% of women workers in the developing world are employed in the informal
sector. The specific percentages are 84% and 58% for women in Sub-Saharan Africa and
Latin America respectively.
- The percentages for men in both of these areas of the world are lower, amounting to
63% and 48% respectively.
- In Asia, 65% of women workers and 65% of men workers are employed in the informal
sector.
• Globally, a large percentage of women that are formally employed also work in the
informal sector behind the scenes. These women make up the hidden work force.
STAT lecture 2017 – 169 / 185
Agricultural and non-agricultural labor
Formal and informal labor can be divided into the subcategories of agricultural work and
nonagricultural work. Martha Chen et al. believe these four categories of labor are closely
related to one another. A majority of agricultural work is informal, which the Penguin
Atlas for Women in the World defines as unregistered or unstructured. Non-agricultural
work can also be informal. According to Martha Chen, informal labor makes up 48% of
non-agricultural work in North Africa, 51% in Latin America, 65% in Asia, and 72% in
Sub-Saharan Africa.
STAT lecture 2017 – 170 / 185
53

Agriculture and gender
The agricultural sector of the economy is shrinking while the percentage of women who are
employed in the agricultural sector is increasing. According to the Penguin Atlas of Women
in the World, women make up 40% of the agricultural labor force in most parts of the
world, while in developing countries they make up 67% of the agricultural workforce. Joni
Seager shows in her atlas that specific tasks within agricultural work are also gendered. For
example, for the production of wheat in a village in Northwest China, men perform the
ploughing, the planting, and the spraying, while women perform the weeding, the
fertilizing, the processing, and the storage. In terms of food production worldwide, the
atlas shows that women produce 80% of the food in Sub-Saharan Africa, 50% in Asia, 45%
in the Caribbean, 25% in North Africa and in the Middle East, and 25% in Latin America.
A majority of the work women do on the farm is considered housework and is therefore
negligible in employment statistics.
STAT lecture 2017 – 171 / 185
Paid and unpaid labor
Paid and unpaid works are also closely related with formal and informal labor. Some
informal work is unpaid, or paid under the table. Unpaid work can be work that is done at
home to sustain a family, like child care work, or actual habitual daily labor that is not
monetarily rewarded, like working the fields. Unpaid workers have zero earnings, and
although their work is valuable, it is hard to estimate its true value. Feminists have worked
long and hard to come up with a way of monetizing and bringing value to women’s unpaid
labor. The controversial debate still stands. Men and women tend to work in different
areas of the economy, regardless of whether their work is paid or unpaid. Women focus on
the service sector, while men focus on the industrial sector. When men and women do hold
the same positions, there is quite often a income gender gap.
STAT lecture 2017 – 172 / 185
54

Unpaid labor and gender
Women usually work fewer hours in income generating jobs than men do. Oftentimes it is
household work that is unpaid. Worldwide, women and girls are responsible for a great
amount of household work. One measurement that feminists have created to give a value to
unpaid household work is to compare the hours spend on activities within the home by
men and women. The Penguin Atlas of Women in the World shows that in Madagascar,
women spend 20 hours per week on housework, while men spend only two. In Mexico,
women spend 33 hours and men spend 5 hours. In Mongolia the housework hours amount
to 27 and 12 for women and men respectively. In Spain, women spend 26 hours on
housework and men spend 4 hours. Only in the Netherlands do men spend 10% more time
than women do on activities within the home or for the household. Joni Seager also shows
in the atlas that in developing countries, women and girls spend a significant amount of
time fetching water for the week, while men do not. For example, in Malawi women spend
6.3 hours per week fetching water, while men spend 43 minutes on this activity. Similarly,
girls in Malawi spend 3.3 hours per week fetching water, and boys spend 1.1 hours. Even if
women and men both spend time on household work and other unpaid activities, this work
is also gender based.
STAT lecture 2017 – 173 / 185
5.4 Labor participation rate-in Ethiopia
Definition 30. Labor force participation rate is the proportion of the population ages 15
and older that is economically active: all people who supply labor for the production of
goods and services during a specified period.
• LFPR, female (% of female population ages 15+) in Ethiopia was 80.70 as of 2009. Its
highest value over the past 29 years was 80.70 in 2009, while its lowest value was 71.50
in 1996.
• LFPR, male (% of male population ages 15+) in Ethiopia was 90.30 as of 2009. Its
in 1983.
• LFPR, total (% of total population ages 15+) in Ethiopia was 85.40 as of 2009. Its
in 1983.
• Ratio of female to male labor participation rate (%) in Ethiopia was last measured at
87.47 in 2012, according to the World Bank.
STAT lecture 2017 – 174 / 185
55

5.5 Income Maintenance program
• It has the following basic features
1 income guarantee basic benefit (B),
2 benefit reduction rate (t)
3 level of income (y)
Actual subsidy payment (s) is given by
s = B−t×y (11)
STAT lecture 2017 – 175 / 185
Investment in human capital and labor quality
• the following three points are useful to understand the investment in human capital and
labor quality
1 expenditure on education and training is substantial
2 the educational attainment of labor force has increased dramatically
3 investment in education results in an enlarged flow of earning
STAT lecture 2017 – 176 / 185
Discounting and net present value
• Discounting rate is given by
Vp(1+i) = V1 (12)
• Vp = Net present value
• i=interest rate
• V1= value after one year
Also,
Vp =
V1
1+i
(13)
, will give us the discount value.
Observing the above formula that both costs and benefits are incurred over a number of
years, we can extend the discount formula as
STAT lecture 2017 – 177 / 185
56

Vp = E0 +
E1
1+i
+
E2
(1+i)2
+...+
En
(1+i)n
(14)
• E0=the additional income obtained immediately
• E1=the additional income received next year
• E2=the additional income received after 2 years
Note : Restate the formula for over TVT school graduates who inter the labour force at age
(18–59) will have the following formula
Vp = E18 +
E19
1+i
+
E20
(1+i)2
+...+
E59
(1+i)41
(15)
=
59
X
n=18
En
(1+i)n−18
STAT lecture 2017 – 178 / 185
• If Vp > 0, the decision of investment is correct.
STAT lecture 2017 – 179 / 185
• The explanatory power of human capital model is presented by
1 length of income stream
2 cost
3 earning difference
• The difference in investment human capital can be explained by the following three
main reasons.
1 difference in ability
2 difference in degree of uncertainty concerning the capacity of training skills and
knowledge to enhanced earning due to discrimination
3 difference in borrowing funds for human capital investment
STAT lecture 2017 – 180 / 185
57

5.6 Labour supply and demand
1 Labor supply will depend on the following things
a non wage income–an increase/ decrease in come, other than from employment, will
decrease/ increase labor supply
b preference for work
c non wage as part of the job
2 Labor demand : depends on
a when product demand increase
b enhancing price (Attractive price)
c number of employers increases
STAT lecture 2017 – 181 / 185
5.7 Labor productivity
productivity =
output
input
(16)
Labor productivity =
Total productivity
no. ofworking hours
(17)
Producivity index =
productivityof year1
productivityof base ear
×100 (18)
STAT lecture 2017 – 182 / 185
5.8 Growth of labor productivity
• It is important for at least the following reasons
1 productivity growth is the basic source improvement in a real wage and living standard.
2 productivity growth is an anti-inflationary price
STAT lecture 2017 – 183 / 185
determinants of productivity growth
• The critical determinants of productivity growth can be classified in to three groups
a the average quality of labor force
b the amount of capital goods employed with each work of labor hourss
c the efficiency with which labor, capital and inputs are combined.
STAT lecture 2017 – 184 / 185
End ! THANK YOU !!!
STAT lecture 2017 – 185 / 185
58

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