Economics Development - EDUCATION and TECHNOLOGY

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EDUCATION

Means

End

Education as a means is the equivalent to being:

An (long term) INVESTMENT GOOD.

--> With the final purpose of increasing output.

Education as an end is the equivalent to being:

A CONSUMPTION GOOD.

When talking about EDUCATION, it is likely we focus on the one with the HIGHEST RATE OF RETURN:

- Tertiary Education

- Secondary Education

- Primary Education

- Vocational Training

There is often a larger focus on PRIMARY education to start off with - providing it as a "BASIC NEED". Working from the foundation.

However, as there is further economic development - it is likely that they will move on to higher levels of education (i.e. Secondary) - in Hong Kong.

In some developed countries (e.g. Scandinavian Countries), there may even be provision of tertiary education.

ADVANTAGES OF EDUCATION:

- Human Capital

- Training

- Diversifying labour

- Encourages Social Mobility (Upward Mobility - allowing the lower income levels to increase their standards of living) - with the aim to decrease inequality overtime. (however, it can be argues that unequal quality/provision of Education: promoting income disparity - the richer get "better" education than the "poor.)

- Decreasing family size with education for women. For this, we have to take into consideration the:

Qd of children = f(Price of a child: opportunity cost of raising a child x Price of related goods)

DISADVANTAGE OF EDUCATION:

- Over-qualification and inefficient resource allocation. Leading to "educated unemployment" - whom have an expectation of salaries. (if this is a valid argument - the most efficient type of education would be vocational training)

- Lack of government intervention and subsidies may cause education to be expensive.

- It becomes difficult to satisfy all highly educated individuals, this may lead to political instability.

FORMAL vs. INFORMAL (Television, Radio, Distant Learning) -->

TECHNOLOGY

APPROPRIATE

INAPPROPRIATE

Appropriate technology means that the factors provided are in line with FACTOR ENDOWMENT:

- Capital

- Labour

- Land

In

In appropriate technology can be:

- chosen by engineers (the argument of the 'engineering man')

- brought in by MNCs

This is mainly caused by distorted factor prices, leading to distorted choice. This is often brought on by:

- subsidize interest rates (lower interest rates = more investments)

- a minimum wage law

EDUCATION

TECHNOLOGY