Education as an Investment

QOTD: “Some parents need a push. A civilized society cannot allow a child’s right to a normal childhood and a decent education to be held hostage to a parent’s whims or greed.”

Schools are usually available and free in most countries, at least at the primary level. However, child absentee rates are still relatively high, and the reason might be attributed to the children’s unwillingness to be in school or that their parents don’t seem to be willing to make them go.

This means building schools/hiring teachers is useless if there is no strong demand for education. This depends on the demand for skill that causes demand for education to emerge. 

However, there is actually no shortage of demand in many cases. So what is the real reason that schools fail?

The debate on education policy centers on how governments intervene. The solution is to get children into a classroom taught by well-trained teachers. 

Getting children into school is an important first step, but it’s interesting to realize that many education requirements only suggest that children should complete a basic cycle of education without specifying whether the children should actually learn anything in school. 

So the assumption is that learning would follow enrollment. However, this isn’t the case, so many critics don’t believe there is a point in supplying education unless there is a clear demand for it -> the parents don’t care enough about it, because they know that the actual benefits or “returns” to education are low.

Therefore, only when the benefits of education become high enough will enrollment go up. And since there are many cases where parents can respond to changes in the need for an educated labor force, no education policy is actually needed.

It’s interesting how the book suggests how private schools emerge: when parents actually care about education, they care about the quality of schooling. They care about whether the teachers can deliver what they need. And if a public school can’t provide that, a private-school market will emerge.

Many parents think about education as an investment where children get the benefits, so it’s like the “gift” that they offer their children. Therefore, some parents who think that education is too much of an investment would rather make him go to work instead.

Since compulsory education cannot be enforced, the government must make it financially worthwhile to send their child to school. Increased income is not enough—parents need to be given an incentive. And here comes the Conditional Cash Transfer— a new tool in education policy.

It offered money to poor families, but only if their children regularly went to school and the family sought preventive health care. They got more money if the children went to secondary school and if it was a girl.

Though the payments may seem like a “compensation” for the family for the wages lost when their child went to school instead of working, the government’s actual goal was to nudge the family to send their children to school as it would be costly to not to do so.

Income matters for education, which means that rich children will get more education even if they aren’t that talented, and talented poor children may not receive adequate education. So in order to make sure every child gets a chance, public supply-side intervention that makes education cheaper would be necessary to get close to the socially efficient outcome.

Image: https://www.toonpool.com/cartoons/Poverty%20and%20education_431499