Chain of analysis · Supply-side policy

Education and training → Development

Edexcel 9EC0 4.3AQA A level 4.2.6
ChainWhat it assumes · how to break it
Start
The government of a developing economy increases spending on education, for example building primary schools, training teachers and funding basic adult literacy courses.
1
As a result, more people learn to read, write and use numbers, and more workers gain practical skills.
human capital · literacy
Assumes: The places are filled and the teaching is of good quality.
But: Shortages of trained teachers and materials mean enrolment can rise with little learning, and poor families may need children and adults to work instead.
2
This means workers become more productive and can move from subsistence farming and informal work into better-paid formal jobs.
labour productivity · formal sector
Best link to attack
Assumes: Formal-sector jobs exist for the newly skilled workers.
But: Without investment, infrastructure and access to credit, few formal jobs exist, so educated workers stay underemployed or emigrate (brain drain).
3
Consequently, incomes rise, raising GNI per capita, so households can afford better food, healthcare and housing.
GNI per capita · living standards
Assumes: The income gains are spread widely.
But: If the gains go mainly to urban and better-off families, poverty in rural areas may change little.
4
In addition, educated mothers tend to have fewer, healthier children, so child mortality falls and life expectancy rises.
life expectancy · HDI
Assumes: Girls and women get access to the education.
But: Early marriage, school fees and distance keep many girls out of school, so the health gains are smaller.
End
Development improves: HDI rises through more years of schooling, higher GNI per capita and longer life expectancy.
Evaluation chainattacks link 2 · Assumptions
  1. E1However, the gain in development depends on whether the economy can make use of the skills created.
  2. E2If there are few formal-sector jobs because of poor infrastructure, weak access to credit or political instability, educated workers stay underemployed or emigrate to higher-wage economies.
  3. E3As a result, the government bears the cost of education while other countries gain much of the productivity, although remittances sent home return part of the benefit.
  4. E4So education raises the education part of HDI directly, but its effect on incomes and wider development may be small unless investment and jobs grow alongside it.

Gains in income and health take a generation to appear, while the cost falls on the government now.

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Questions this answers

  • Assess the importance of education in promoting economic development.
  • Discuss the factors that might limit the growth and development of a developing economy.
  • Evaluate strategies a developing country could use to raise its Human Development Index.

Diagram

PPF shifts outwards as human capital rises. HDI data on mean and expected years of schooling make strong evidence.

Reverse and related

Low spending on education → low literacy and skills → low productivity → poverty persists and HDI stays low.

GCSE version

  1. StartA developing country spends more on schools, teachers and adult literacy.
  2. 1More people learn to read, write and gain work skills.
  3. 2They can get better-paid jobs.
  4. 3So incomes rise, people live longer and living standards improve.

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