UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
Distr.
LIMITED
E/CN.14/SDP/21
24 September 1963 Original: ENGLISH
ECONOMIC COMMISSION FOR AFRICA Meeting of Experts on the
Integration of Social Development Plans with Over-all Development Planning Addis Ababa, 9-18 October 1963
EDUCATION AND DEVELOPMENT
(Presented by the United Nations
Educational, Scientific and Cultural
Organization)
63-3085
E/CT.14/SDP/21
EDUCATION AND DEVELOPMENT^
I. INTRODUCTION
This paper aims at giving a conspectus of how education can be re lated to development needs. It begins by discussing the notion of develop ment and certain special characteristics of education which have' to be taken into account in over-all planning and programming. After briefly indicating the areas, of choice present in educational planning it suggests that ideally there is a nine-stage, process of incorporating education into development planning. These nine-stages are set out, and followed by a section suggesting various criteria and norms which may be applied in situations where the data and administrative mechanism required for detailed planning is absent. A section follows dealing with the cost and financing of education, and a final section discusses the problem of assessing the returns from investment in;education.
II. THE NOTION OP DEVELOPMENT ■
1. "It should no longer be necessary to speak of economic and social development since development - as distinct from growth - should auto-- matioally include .both". This view,, taken from the report of the United
Nations Secretary-General on the Development Decade,^is shared in the *
present paper. At the same time the elimination of the distinction between economic and social development, although in theory desirable, is not yet feasible at the working level, since the distinction is well established
(even if on dubious assumptions) in national accounting.practice, in
ordinary speech (as it is in the title of the Economic and Social Council of the United Nations itself) and in current,-teaching and research in the
different disciplines. .
-2. :-_ The thought in the Secretary-General's report quoted above is parti cularly applicable to the development of-education, economic and social factors being closely interwoven in this field. Education is one of the rights included in the Declaration of Human Rights of the United Nations,
l/ By HiM. Phillips. - ■ ■ ■ ; .
2/ The United Nations Development Decade - Proposals for action - Report
of the Secretary-General - 1962 - p,3.
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The expression "right" in the sense of something which can be enforced, and which someone has an obligation to enforce, has a clear meaning in a juridical context. Thus "the right to education" comes into effect when there is a school in a village and someone refuses admission to a child to the school facilities. By simple process of law the child's right can be established and the. matter be remedied immediately. If, however, we have the situation, alas too prevalent in the developing countries, that . the village has no school, no hospital facilities available, a polluted
water supply, and no employment opportunities available to the villagers, the situation is quite, different. The. statement that education is a human right in such circumstances is'no more than an exhortation. It is equival ent to the statement "universal primary education is of extreme importance and must be one of your priority objectives".- The reason is that there are not enough resources to satisfy all of ttie claims which are advanced as "rights". The problem becomes one of choice in the use of resources and moves from the sphere of jurisprudence into that "of economics, politics
and social programming,3. There is a widespread impression that economics is concerned only with matters falling "under the measuring rod of money". In fact it is
concerned with the be.st use of scarce resources for given ends whether or not they can be measured in monetary terms. In terms of- developmentthe "given end" may be defined primarily as raising levels of living.
The ..United Nations Statistical Commission has suggested-^nine major com
ponents of a satisfactory index of levels of living: (l) health; (2) food
consumption and nutrition; (3) education; (4) employment and conditions of work; (5) housing; (6) social security; (7) clothing; (8) recreation;
(9) human freedoms. The last two are difficult or perhpas impossible to
measure. Development may also be taken to mean the widening of the effec tive area of choice* open to individuals and to. societies .as- to how they
spend their daily lives. The pursuit of moral objectives and the promo-., tion of culture, as distinct from recreation, are also considered by many
l/ United Nations Publications, E/CN,3/l79 - E/CN.5/299, New-York, ,1954,
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people to be development ends. Moral factors are generally taken to be intuitional and not susceptible of measurement and there are no economics of culture, in the sense of the study of measurable resources and the satisfactions derived from living-in one culture rather than another.
The concept of 'public psychic incomeV appears in economic theory^/ and work has been done" on the measurement of cultural phenomenal The'main difficulty, however, as in the case of the economics of welfare is the impossibility of making a sum of individual satisfactions.
4. Economic development programmes in a strict economic sense are those Which raise a country's per capita income, and which increase its capacity to produce. In a wider sense they win be expected to improve the national distribution of income as Veil as increases its total, since certain dis tributions favour growth more than others, as well as being more' socially just. Social dav&lopment programmes in the narrow sense are those which make State or corporative provision for the essential living levels for people who have insufficient incomes. In the wider sense, they include ' ways of creating those social structures, systems of incentiveness and degrees of mobility which favour economic growth. In a still wider sense,
they carry out the aims and needs of society as a whole and We arrive at '
the concept of over-all development. As the OT Development -Decade report states: . "Development is growth plus change: change in turn is social and cultural as yell as economic, and qualitative as well as quantitative".^/
5. Development is a relatively new concept. The economic and social changes which brought' about modern society have been packed into the last 200 years out of 3,000-4,000 years of civilization. This is reflected not only in the indices of economic growth but in population figures. From
1/ PIOOU, A.C. - Economics of Welfare - MacMillan(London), 1959.
Page 4
the beginning of the Christian era to 1750 the world population is "believed
to have grown at 7 per cent r>er century. After 1750 it grew at 85 per cent,
It is not surprising, therefore, that education has long "been the meansemployed "by societies to perpetuate their way of life, civil organization,
and value systems, rather than to develop them.6. The country which was earliest in obtaining economic development in a modern sense, the United Kingdom, did so without an early introduction of universal education. By I85O in the UK as in France, half the popula tion was illiterate, although remarkable soonomic growth had been achieved in the previous period. Other countries which came to the fore later in the industrial field (United States 01 America, Germany, Japan) introduced
compulsory universal education at an earlier stage in their own develop
ment process, partly no doubt from the fact that they started later. In
the late Nineteenth and early part of the Twentieth century the Russian
Empire experienced considerable industrial development but had a poor roco^d-ao ^ogai-dc univor^al education..7. The social consequences of the unequal spread of education in the UK in the middle of the last century are well known. They were part of the problem of the "two nations" within a single country which troubled Disraeli and the politicians of that age, who were faced with the possibility of the development of a dual society at the same time that economic growth was' attaining a niga pace. It would not be appropriate here to discuss the social mechanisms of adjustment by which this was avoided and the modern "unitary" welfare State was created in Western Europe by one set of measures; and later in Eastern Europe by another. In both types of society the extension of universal education to. cover the whole of the population, and the creation of educational ladders was fundamental to
the structure and development cf the State,8. Clearly, there are lessons from this historical process for newly develop
ing countries facing the task of building up well organised societies, and
for those countries which still for historical and material reasons connected with their development preserve features of a dual society.
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III. SOME SPEGIA-L CHARACTERISTICS OF EDUCATION IN ECONOMIC ANALYSIS
9# At the outset the economist should have a clear idea of the nature of education as an activity and the resources and complementarities involved. On these matters as. well as in the whole field of education planning he should maintain constant and close contact with educators;
otherwise his analysis will lack realism.
10, Some special characteristics of education which affect its economic analysis are:
(a) Education is a human right, and it is an end in itself "being
one of the components of standards and levels of living. This fact, however, as we saw above, does not absolve it from analysis, beoause there are other rights with which education may be com peting in conditions of scarce resources. Judgments in these matters must always be moral, political and social, "but they have to be made with knowledge of the economic consequences of the different alternatives.
(b) The direct economic impact of education is upon occupational
skills, and upon increasing the stock of knowledge and its velocity of circulation. It also has many indirect effects:
on raising the level of initiative and inventiveness of the population; on improving consumption patterns 5 on promoting economic and social mobility. The educational ays ten- also serves as an instrument of selection'by which a society "both finds and improves the quality of its leaders, entrepreneurs, administrators and technicians. It is a piece of social as well as economic infra—structure«
(0) The economic demand for education falls into two parts: one
for production purposes, and the other for consumption. We use our education to earn a living, and we use it to enjoy the fruits of living. It is not easy to make this distinction in practice, and we have also, to note that, both the individual and
e/cn.h/s:dp/2i
Page 6..-■ . society use education as "a-means of preserving and developing their value systems - a function which does not fall under
' either production or consumption in the economic sense,(d) When Professor Schultz made his calculations of the, financial returns on .education in the USA .he assumed that fifty per cent of education was consumption, ;and halved the cost. to. take
this into account^ In less developed countries the consump
tion aspect is likely to he smaller - despite the phenomenon in some countries of the intellectual unemployed - because the over-all amount' of education available is less. The role of -education as an item of consumption, has sometimes obscured the . : part it plays as an economic investment. Some economists have . . . attempted to distinguish between investment in technical educa-
■ : ■: tion as productive and expenditure on general education as con- . - sumption. This overlooks the fact that general education is
a-necessary prelude to technical education and underestimates the educational system-as1-a whole as infra-structure. Trade is important■as well as production, and grades such as clerks and.accountants as well as engineers are needed, for economic
development- . •■.■.■
. (e) Education requires a relatively long-time span for its returns to accrue. This period'may be fifteen to twenty years for the educational system as a whole, including education for profes sions ■which require the largest number of years of study: though . - , results can be■obtained Quicker for levels involving fewer years
• of schooling or study. Quicker results can, of -course,also be achieved by influencing the students already in the "pipelines".
.Examples are special training facilities to,young people al ready in the educational system; temporary.adjustments of
curricula and teaching methods? programmes of re-schooling by 1/ SCHULTE, T.W. - "Education and Economic Growth", Social Forces influenc-
ing American Education. - H.G. Richey, (ed.) Chicago, I96I. p.7>
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*■ ■■• ■ re-capt.UKi.ng people who have already passed out of the educational system,wh;o -are .insufficiently trained or over specialized} and intensive-adult-education campaigns. But no educational system can be effectively constructed if the attraction of such short- term yields results in neglect of its basic long-terr. function ing. The "pipeline" has to be kept replenished, "both as regards pupils and teachers, and choices have to be made between invest ment in the various educational levels based on long-term criteria.
In education,quality as well as quantity has to be watched at all times. Indicators of quality are the degree of preparation and length of training of the teachers and the pupil teacher
ratio. ■ ■ ■ ■ ■■•■.-.
(f) . The educational system is interlocked furtcrtxom 1 ly with the socio-economic environment, through such factors as: occupa- tional needs and the complementarity of different professions and skills, each of which has different educational implications;
the role of the teacher in the community and the community's influence on him$ and the administrative and fiscal systems
within which it operates. It must nerez- be considered as a self- contained system for planning purposes."
(g) Since educational planning deals with people'and institutions and no.t .commodities, it cannot be assumed that ;they will be passive. The preferences of parents and pupilay and the' in—
. ceiytives which affect their preferences, in:the erid govern -■■•■■■*; -vl: ■'}-.■.
entry into the different available types of education however
- ■ ■ . v
good the educational guidance programme may be. Educational plans must allow for the element of human choice as to1the best 'use of one's talents. Accordingly, the numerical output of the
educational' -System* for the different levels of.education and subjects 6t study should exceed .the target demand expressed in either demographic or occupational terms.to the extent, necessary to allow for switches-' in o-hoaces and flexibility of use. of at- ' ' tainnrerits, as well as for was-tage due Lto inevitable "friction11
/ Page 8
between the eucational system and the economic and social . environment. Farther, education has a lower rate of obso-
leseenoe than most physical capital because of the length of time and flexibility of use to which an all-round education
can "be. put,
(h) Education.in the end is what educators make of it. It is both a conservative and stabilizing force and a developmental and innovating instrument. Thus both the content of education and the quality of the teaching have to be carefully evaluated as
■■ ■. ,,part of the planning process, ...
(i) Educators have, and need to have, a high sense of moral respon sibility because of the nature of tht4r task. This, should
always be respected when dealing with education in economic terms.
The status and-social position of the, teacher are in themselves important development factors, which (inter alia) place limita- .- tions on the degrees of mechanisation of education possible by
new media,
IV. . AREAS OF CHOICE AND SUBSTITUTION
11. .The economic analysis of education ceptres round the following main questions: ;how to relate educational systems to overfall development needs (economic and social); what is the level of investment to he made -in education; what is the optimum relation between the different levels
and sectors of the educational system (the educate "mix"); how the productivity of educational systems can be improved; how can education best be financed; and what are the .returns on investment in education.
12, In strict logic the last question should be taken first, since the level of investment should depend on the returns to bo obtained. Muoh work is being done on the problem of measuring the returns on education and the last section of this paper gives a brief review of what has been a plished but the*, arc as yet no established prooeduroB whiOh the eco
nomic planners can utilize. We have therefore chosen to begin with a
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pragmatic approach and to discuss how the required level of. investment can be derived from the development perspective or plan. To the extent that education is an.irreplaceable and integral part of the development plan the returns on eduoational investment will be the same as those for the development plan itself,
13» All economic analysis, if it;,is.nQt'-..tQ: be purely, "theoretical, re—
quires-that there should, be real possibilities, of.alternative use of re sources in the activity under analysis. What are the degrees of choice -and possibilities of substitution in educational ..planning? The educational
system itself is of course not" substitutable. Every society must have an educational system. No civilized society is known: today to spend less than about 1 per cent of its GHP on education and none more than about 6 per cent. Between these two' percentages huge resources are involved and important possibilities of resources substitution arise, not only as regard the size" of the educational effort as compared with other economic and social programmes - education as an infrastructure service competes with public transport and housing and with such social services as health and welfare - but inside the educational system itself,
14« As regards its impact on the creation of skilled manpower a prima facio area of substitution is between the amount of specialized training to be given in the formal education system and the amount to be under taken on the job -ixx trade, industry and the services. In the USA a
sample survey by the US Department of Labour has revealed! -that, the- average period of workers' formal schooling was 10.1 years in 195.0 while -the ave- rage period spend on in—service training was 1.72 years at,that" timers These proportions had changed slightly since 1940 and there is no reason to suppose they c*uld not vary f\irtherr There are, however, serious limitations as to the extent of substitution possible without loss of
efficiency. This is demonstrated by the research of Professor Strumilin—' l/ Estimates of Worker Training Requirements for 4000 Jobs. US Depart
ment of Labor, Bureau of Employment Security, US Employment Service.
2/ STRUMILIU, S.G. - Economic Importance of Education, Series "Vie
Economique", Moscow/Leningrad?* 1924,
Training on the job without schooling
0,16 0.15 0.14 0,13 0,11 0.08
Schooling and training
0,30 0.23 0.15 0,11 0.08 0.04
E/CN.14/SDP/21
Page 10
which indicates the large superiority is productivity of workers who.had
adequate formal schooling plus vocational training in industry, as com pared with these who had only training on the job. - His -study gave thefollowing results: .... - - ■■ t, . ;
Rise in efficiency (in work units) per year
Year
1st 2nd 3rd 4th 5th 6 th
It is olear that efficiency rose much faster in the case of those who had formal sohooling "behind thenu Once a man has received' his formal educa tion and his on-the-job training, there is no substitute for the- experience
he acquires on his work. " " ~
15, Inside the education system itself there are important areas of pos
sible substitution in respect of the different types of educational struc
ture, the content of education and teaching techniques. These items coverthe ratios of enrolment of the school age population in the different educa tional levels and sectors, the extent to which the education is general or specialized and at which stages, and the choice of technology of educa tion, e.g. the use of radio and television as compared with direct teaching, 16, -Problems of the productivity of the ec'acatipnal system are always
present, e,g, the possibility of the use of educational facilities on a
shift basis, and.the study'of the alternative unit costs of different types
of education. The size of educational expenditure is affected not only
by the cost of'its inputs but: "by'its efficiency., and a reduction of unit
Page 11
--. cost is equivalent to an increase of financial resources allocated, Many educational systems use their resources below capacity, partly due to the
socio-economic environment and to traditional attitudes which consider
that education falls outside of economic allocation approaches, and partly from failure to adopt adequate criteria of selection and attainment.. In
one country out of 100,000 who sat for the matriculation examination in
1959 only 3 per cent passed, and only 30 per cent of students at the - university passed their annual examinations^ Figures for Mger show that
from the first to the sixth year of study 54 per cent of girls abandon
the primary school course^
17. Areas of choice also exist as to the sources to be tapped for financ ing education (the extent to which the sources should be central, local - governmental, or private, voluntary, compulsory), though in many cases ■
the political and administrative framework will closely limit this area Further, there is the choice facing the over-all economic planner as to the industrial technology to be introduced to carry out the development Plan; whether this should be labour intensive or capital intensive, and whether (of particular interest to the educational planner) it should be
education intensive" or otherwise. In coming to decisions on .such choices clearly the planner must know the potentiality of the educational system of his country and the cost of remodelling it, since this will affect the
cost-benefit ratios of the different alternatives.
18. Finally, there are areas of choice as regards the place of education
m social programming. These choices concern the over-all aims of educa
tion, the distribution of the educational effect by levels and by regions,
of Experts, Kuala-Lumpur, 23-27 Feb
B/CN.14/SDP/21
Page 12
as well as the timing of educational investment in relation to other, social objectives. Examples are:should a country establish universal primary education first, as a sine qua non of its development, programme, even if the effort to do this would reduce the over-all level of living and delay over-all development? Or should it concentrate first on measures which raise national income in order to provide for universal primary education at a later period when it oan be established with less sacrifice? Different political philosophies and practices exijt on this issue and the develop ment planners will have to work at different times and places on different
hypotheses.
19. Most of the other areas of choice of a social nature relate to tfre implementation of educational plans rather than to. questions of its part in over-all national investment. Many educational systems contain in their curricula, teaching methods, and school structure, elements designed to preserve traditional attitudes rather than favour their adaptation to modern conditions. Choices' have to be made as to how far the content and distribution of education should serve the purposes of social conserva tion or social change. Many of the developing countries face major pro blems of social change caused by the movement of large numbers of people from the countryside to the town, the transition from subsistence to cash economies, and the impact of industrialization and technological change
on social structure and individual psychology. In respect of these .problems the countries concerned have either to make rapid social adjustments, to which education can contribute, or face the danger of social disintegra
tion,
V. MEANS OF INCORPORATING EDUCATIONAL PLANNING
INTO DEVELOPMENT PLANNING20. No planning and programming, since it involves evaluating the effects
of alternative types of action, can be effective .unless the aims to be
achieved are clear. Unfortunately, educational objectives are not always
as well as defined as some of the other objectives of development policy,
and governments and civic leaders, assisted by sociologists as well as
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Page 13 '
development economists, need in many countries to make.a more precise formu
lation of educational aims,
21, The word "planning" is losing today some of xhe undertones it had earlier of infringement with individual liberties and is becoming increas ingly accepted by all as part of the vocabulary of development,, each country having its own type of planning within its own political system.
In what follows, planning refers to the system a country adopts of fore- oasting its needs and setting up a framework of national action to meet them; it deals with matters which are subject to forecast and are ponder able, and can-never cover the whole of policy, A decision to devaluate
the' currency or to-enter a common market may have more important effects oh economic development and social structure than the most detailed ten-
year plan,
22. In order to incorporate educational planning into development planning ideally at least nine stages of analysis are required. These may -be set out as follows: Six of these involve the relation of education to the economic and social environment. These are items (l), (2), (3), (4)> (5)j
(8). Three of them are concerned with factors internal to the educational system, namely, items (6), (7)> (9)*
(l) Projections are required of the future size and demographic composition of the population for a period of 15 to.20 years. If pos sible,, the school and university age groups should be shown on,a year by year basis. The census' returns do not normally separate out the school ..age groupings, and special collection of data of forecasting methods by demographers may be required. Occupational distribution should then be extrapolated, as well as census material on the educational component of the •ccupations, taking into account perspective changes due to altera tions in the structure of the economy. The validity of the educational
data in the census returns will need to be tested and where necessary.replaced by sample surveys. The extrapolations of past trends is. neoded
continually as part of the general framework of data useful for planning.
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(2) ■ The next requirement is the availability of.a long-term plan or long-term projections of the economy by sectors and branches prepared for a period of 15-20 years. Failing detailed projections,some future profile of the economy will have to.be assumed for planning purposes.
Here major problems arise because of the extent of the detailed break
down of the economy required in the projections to serve our purposes, and through difficulties inherent in extrapolation and assumptions over
a period as long as 15 to 20 years,
-: (3) Ve have now to translate the levels of activity implied in the long-term projects into.the manpower requirements and in particular into the stock and flow of occupational skills required. This can be done by using norms obtained from census returns, sample surveys and project reports. He norms should be worked out in consultation with employers and-.trade unions in order to ensure that they are based on industrially accepted and not on hypothetical occupational structures. Allowance has also to be made'for foreseeable changes in the norms brought about through the advance of technology affecting the nature of the skills required, ,: as well as such factors as trends in wages and hours or work.
(4) The occupational data so obtained needs to. be translated into -its educational component. The number of classified occupations in the
ILO list is 1345, and the classification of skills by educational compon
ents canproduce 300 items in advanced economies. Difficulties which .arise at this stage of anaiysis are that there are no fixed relations be
tween occupations and education, except over broad categories and in a ' certain number of professions. For planning in advance up to 1to 15
years it is not necessary to disaggregate into as many as 300 educational facilities, .enrolment flows and cost structure, have
stage to be grouped as broadly as possible. As progression tak%s place
LI the Planning period it is possible to come closer to the more e
f re ^^^
LI the Plag p pecifications required, and plan for trainxng of more ^^
l
pecificati qidd d the long-term plan. Educat on
lies within the facilities provided under the long-term
the core round which specialized training has to be built and thus should
not be planned in too great detail as regards specialization «*"*™T
tions. For perspective planning purges tho educational olasoifx
E/CN.14/SDP/21 Page 15 "
of occupations oan probably be reduced to 10 to 15. Even .smaller group ings are possible, according to the time period .and detail the other
factors in the. planning process permit. , Reccn^ee. -hag. to be made to census returns, sample enquiries, and consultations with employers and trade
unions, as well as with educational planners, administrators and technicians concerned with the different types of education involved. Once again,
estimates should be based on the best practice rather than on theoretical educational needs for different types of work, unless changes in practice can be foreseen and incorporated into the analysis,
(5) The first four stages will have produced figures showing the
occupational demand for education Over the planning period. It is now
necessary to add additional demands for education to cover-(a) education
for social and consumption purposes not otherwise included, i.e. of people who will not enter occupations, as will be the case of many, girls and
married women; (b) provision for 'drop out1, switches made "by students
in' mid-stream, and other forms of "turnover" and-for geographical dis parities -of supply and immobilities of demand. Just as there has to be at any given moment a certain amount of frictional unemployment, even in conditions of full employment so there should always be an educational surplus to the extent necessary to provide for environmental adjustments?
(c) education in excess of demand to the extent that education is a field in which the existence of supply creates demand. Professor Arthur Lewis—/
has stated that educational output should always move somewhat in advance of demand since economic growth inevitably requires a progressive raising of skills. It is clear that the existence of available educated personnel attracts investments, but planning for education to movo in advance of demand needs great care because of the danger of creating groups of edu cated unemployed who cannot be absorbed by the turnover of the economic system and its rate of growth.
1/ LEtfIS Arthur, - The Strategy of Educational development in relation
to the economic growth of underdeveloped countries — OECD Policy
Conference on Economic Growth and Investment in Education, Washington, 16-20 October 1961, pc38. :'0ne ought to produce more educated people than can be absorbed at current prices, because the:alteration in current prices which this forces is a necessary part of the process of economic development".
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Page 16(6) The supply side has now to "be analysed and an inventory esta blished of the existing educational facilities and their output. The
changes, "both quantitative' and qualitative, needed to'produce the estimated demand required to be'forecasted. Those f- ■ -o- j'te, to jo idealistic, have
to take into account such' factors as the degree of efficiency to be expected from the educational system in the prevailing pedagogic and social
environment; whether the content of curricula and selection criteria for
the different educational levels are effective; whether the educational system is so organized as to exploit to their maximum the more indirect economic and social gains from investment in education. Thus an educa tional system with adequate scholarship ladders will tend to promote social mobility and the selection of talent. Similarly; if there is a close rela tionship between the educational system and the business and administra tive world, and with research, the contribution of education to entre- preneurship and innovation will be enhanced. It may therefore be noted
that the way the educational system is organized, both internally and in its external relations, will affect the supply of personnel forthcoming
for development purposes«
(7) The next step is to seek the optimum relation between the dif ferent levels of the educational system (primary, second level, higher and adult education); and between the subjects of study (proportions in the humanities or in engineering and technical institutes) to'produce the required output. This involves an attempt to relate supply and demand at the sectoral or occupational level without"losing sight of the internal requirements of the educational system d& buoh. Increased enrolment at any oen of the levels has repercussions upon the others, both through the need for teacher training (an increase in primary' enrolment means more primary school teachers to be produced in the secondary level). Questions
of quality also of course affect these relationships,
, ;- (8) Given an adequate pattern of development on the supply side the
next-stage is to study the incentives or other measures required to guide
pupils into those particular studies, and school leavers into these occupa
tions, including questions: of tho varjc r.v:-.ivture and r-OEtrge of the
E/CN.14/SDP/21 Page 17 '
different occupations. Students• and parents' preferences have to "be fore seen and. guided. The" existence of a long-term plan may be in itself an important incentive indicating that a :degree ■ of assurance ..can be attached
to employment, in particular occupations. The actual and possible flowsbet-ween the different levels and sectors have also to be- studied having
regard to pedagogical standards and selection criteria at present in operation or desired. . ■ .
(9) Ttie comparative cost and efficiency of alternative' technologies
of teaching and teacher training methods has then to be studied. The
■ technology of teaching chosen and the number of teachers per class will influence the amount of teacher training required and the amount of mechan ical equipment needed. The unit, costs _pf different types' of educational facilities will need to be assessed together with alternative strategies
of developing the eduoational system,23. The following out of these steps requires data .and procedures and forms of Intern-departmental consultations which-do not exist in many coun tries.'- High level political' decisions are required as.to. goals, followed by detailed work hy different sections and departments of governments and
persons trained in different disciplines.. Once the planning is establishedit has to be kept periodically under review so that it can be adjusted as
needs ch'ange.
24, Particularly valuable studies to relate education to manpower needs have been made in Prance, Italy and India. A study by SVIMEZ sought to
relate needs, of the Italian economy, growing at an assumed rate of 4-J- per cent per annum, to the educational system. It foresaw extension ofeducation up to 15 years and a'large increase of intermediate education
(15 to 19) to respond to the technological changes foreseen in the economy,
which were assumed to'be very great. The results were;
■ Eduoational Level of the Labour Force (Millions)
2351 1975
, -* Elementary education . . 9.5 4,4 - . Lo.wer secondary- ' . 1,6 11.0
High secondary 1.2 : 4.5
University graduates 0.5 1.0
E/CIJ.14/SDP/21
Page 18Years --of Education of Labour Foroe-
■ .. Fo.-'of years of education:
Percentage in 1959 . . Percentage in 1975
25. Procedures to relate education to the labour force do not, as we saw above, cover the whole of the demand for education. Professor Arthur Lewis dealing with what he calls "investment education" in his article
"Education and Economic Development" states "One can calculate the per centage of the age cohort who should receive secondary education from the formula: "J
.5- 35
_
8 10
25
10
-
48
13 3 16
16
-
6
19
2
5
n (a ± b 1 o)
m
where:
x = proportion of age cohort to be recruited; ■ ' ' n - ratio of number of secondary-type jobs to adult population;
■ m = ratio of number in age cohort to adult population; ..
a = normal percentage wastage of nationals of the country;■
' b = abnormal wastage due to replacement of expatriates;
o = percentage rate of growth of the number of secondary type jobs.
Of these "c" is the most difficult factor to assess".
26. But if we follow the reasoning indicated in our steps (l) to (6) the demand estimates should be beyond "c":(the number of secondary-type jobs).
We have to add the number of secondary school places necessary to maintain
the flow to higher education, since this flow has to pass through thesecondary level" as well as make provision for. items (a) to (c) of step (5)<
27. A further comment on Professor Lewis' formula is that it does not
take account of the fact that as national income rises the proportion of the labour force to the total population normally becomes less. This is caused by the., raising of the age of entry into the labour force, by the lowering of the age of retirement, and by the reduction of the number of workers marginal to the labour force (e.g. married women). Thus quantita
tive estimates' of educational requirements based on labour force demand 10 to 15 years ahead would seriously under—estimate a country's over-all
educational needs,
E/QM4/SDP-/21 ;
Page 19 - "• ■' :
28. A detailed, set of equations which take into account the legistics of education planning has, been provided by Professor Jan Tinbergen and is contained in-the Appendix, If we ^add to Professor Tinbergen's variables
provision for items 5-(a) to. (c) the full complexity of the model required . can be seen. lie solution of his equations depends on the necessary data
being,available, which is unfortunately not usually the case. The model, however, breaks ne>, ground in setting out a comprehensive system of
variables. and relationships which provi.de a conceptual basis <ior a quantita tive estimation of the .factors necessary for the planning of the size and
quality of the educational.system, «
VI.. OTOBE.iroiCATI.QKS FOR• DECIDING LEVELS OF INVESTMENT nr EDUCATION 2&.Mften detailed forecasting'is not practicable it is desirable to use
^orms and analogies, tod to derive conclusions about W future^ from what
is known regarding present macro-econbmic and macro-educational relation ships in the country concerned and in other similar countries. Patterns of educational -organisation appropriate" to different levels' of development emerge from inter-country comparison. Professor Tinbergen>s chapters which
follow contain a detailed discussion of norms and procedures applied to' "
the key relationship, between educational investment and economic develop ment as well-as within the educational system itself. Among norms which ' can usefully be studied are the following: (l) the proportion of gross national product devoted to education both globally and (if possible) by sectors; (2) the proportion of public revenue so spent; (3) the propor tion of public expenditure on education and its different sectors; (4) "
the proportion'of expenditure on education and its different sectors as compared with over-^.1 investment, (5) the proportions of the population enroled at the difxarent educationa_ levels;- (6) the same proportions corrected in the light of ... information as to attendance; (7):
the proportion of the student population having instruction in different :
levels and types of education.
30. Naturally this information has to be interpreted in the light" of'the-
special oonations of each country. and should always be cross-checked with
E/CIT.14/SDP/21 Page 20 ' .
the results of manpower assessments, and the educational requirements deduced from the economic perspective. Patterns of educational develop ment are visible from the statistical data set' out in Basic Pacts and Figures prepared by the Statistics Division of the Social Sciences Depart ment of IBTESCO. Economic indices against which to set those patterns which
emerge are the statistics of growth of GNP per head (or of per capita
income) corrected as far as possible "by indices of income distribution.
Social indio.es can also be utilized with the help of ranking techniques.
Movement can be incorporated into the patterns revealed by recourse to norms of structural change in the educational system. These must be based on what is known as to possible rates of expansion, e.g. the number of years it takes to produce different levels of attainment, including not only pedagogic factors and demographic factors but also teacher training.
It is known, for instance, that certain of the advanced countries, Prance, USA, USSR Have ir.'-.'-arscd "heir over:-all -se.-iching force by 50 per
cent in ten years, On the. demand side there are similar norms as to rate of expansion knovn from experience9 which can be applied, corrected for
the'state of development of different countries. Professor Harbison-'has
estimated that the ratio of annual increase of higher level manpower to the annual increase of national income should usually be of the order of 3 to 1: that scientific and engineering grades should grow numerically three times as fast as the labour force, that the sub-professional.gradesrequiring secondary education should grow 6 to 9 times as fast, and clerical
grades and craftsmen twice as fast. Obviously this cannot be true forevery type of economy and every sector, and in practice the rate will
depend upon the stage.of development and structure of the economy at the
base year,
31. An example of the rates of increase which actually took place in one
of the largest developing countries between 1950-61 and 1975-76 can be
seen from the following table s
l/ HARBISON, F,H. - The Strategy of Human Resource Development in Modern izing Economies c - C'Z'"D Policy Conference on Economic Growth and
Investment in -Education. - Washington, 16-20 October 196I. - Vol. Ill,
p.16.
Page 21 -
Indices of Growth of Enrolment in Primary and High School-^
Glasses 1950-51 to 1960-61 and Targets 1965-66 to 1973-76
Schooling
Year Primary Class Middle Class High Class All
i-v vi-tii ix-xi
1950-51 1960-61 1965-6:6 1975-76
100.0
. 204.7
258.3
401.0
100 203 316 1161
.2 .1 .3
100 241
383
1041.7 .3 .7
206, 272.
534.
4 3 0
The anticipated growth in enrolment after .the high and higher secondary
stages of education worked out in relation to the needs of the economy is reflected in the figures set out in the following, table: . :Estimated Enrolment in Higher Education,
1961 and 1976 (in thousands)
I96I 1976 Index
I976/I96I. ■■
Higher Degree Course 1,043 3,041
789 2,01-
1,832 5,051 275
Sub-professional
Diploma Courses 789 -2,01 ■ 255 '■■"-
Inter-country comparisons can be dangerous as well as useful, unless
they are studies in terms of relative costs and variation of- economic and administrative structure, as well as demographic analysis of the
l/ An unpublished study of the Perspective Planning Division, Indian
Planning Council* ■ .-..'■■. .,-;..:
Page 22
differences in age structure of different countries. „ The value.;of this approach when conducted with caution is that it delimits the area within which the precise target is to be found by more detailed study or informed
"judgment,'rather'on the principle of bracketing techniques developed in naval gunfire. The UHESCO regional conference for' Africa5 Latin America
"and" Asia, relied heavily up^. ::crmc of tlis iuiiid described -above- in' "sea
ting their targets. The cost of the different levels of education wasestimated on certain standards and projections made over periods varying from 5 to 20 years, in order to see what proportion of Gross National Product was involved. These regional targets were of course national, but provided the impetus and methodology for country toy-country'studies.
For the African region a preliminary country by country analysis has been made by UNESCO and was the subject of a second conference of African Ministers, In Latin America and Asia, studies are proceeding at the na
tional level and with the help of international and bilateral aid, 32. Another approach.which should never :be ignored ;.is- to look for ir reversible trends in the growth.. ar.d structure of the economy leading to inevitable educational needs. Since it is veil established that economic growth brings about changes in the proportions of population and skills devoted to the different sectors of the economy, the simple process of taking given growth rates .and extrapolating the structural tendencies associated with them indicates the minimum change in the levels.and types
of. .eduGation.,which .are
y 0O<?T *wn FTNAKT07TT& OF EDUCATION
33V 'fcexost-of education systems depends'of cornea .grsat.ly upon the, proportion of the-population of school age- Thus in countries with high
birthrates the-burderi-^on the econc-y -is .heavier, than: those, jwith low rates
of birth. For instance, children of 5 to 14 years of age make up 25.per
cent of'the population in La-'iin Ainoric^ but only !?• per,-cent-in Western
Europe, i.e. in Latin America one out of four paople should be in school
while the proportion for Europe ib one o;:t of eix. To the demographic
disparity has to be added the wide variations in national income. The
E/CN 14/SDP/21
Page 23
World Social Report (1957) stated that in Taiwan 1,000 workers were required to provide annually for, 15 additional male children, whereas in the United
Kingdom the ratio was 1,000 to 1, . .
34. The salaries of teachers amount to about three-quarters of the averagu educational budget. At the primary level this may amount to as much as
■90 per cent of current expenditure on education and the proportion diminishes progressively with the second and higher levels of education. The average salary of a teacher in a primary school today in the economically developed countries is between 1-J- and 2 times per capita income. Owing to the pat tern of inoome distribution prevailing in developing countries,teacher salaries are normally a higher multiple of per capita income, and the cost of education is thereby proportionately higher. Professor Arthur Lewis
estimates that the cost of giving primary education to every child is 0.8
per cent of national inoome in the USA and 4 per cent in Nigeria. The
main reason being that while a primary school teacher gets less than 1-jy times per capita national income in the USA, in Uigoria ho gets 7
times. In the Asian countries; the salaries of teachers vary between as
low as C84 to from $480 to $600 a year. Per capita income averaged $83 for the Asian region in 1961, and the lower figures given for teachers' income being the most widely prevalent, a rise in average teachers'
salaries must be expected.
35. Pupil for pupil the technical and scientific training at the highest
level is the most expensive, but the 5 to 14 age group takes the largest
part of current expenditure, which is up to 70 per cent in most European countries, " Seoond level education tends to take in the same countries15 to 25 per cent and the higher level between 10 and 15 per cent -but as an eoonomy develops, the trend is towards a higher percentage of expendi
ture for the second and higher levels of education. Expenditure on educa tion other than for teachers1 salaries is distributed between expensesof administration and maintenance, and capital expenditure on,buildings
and 'equipment,
36. A formula for assessing the cost of education has "been set out by
Professor Svennilson in association with Professor Edding and ProfessorE/CN.14/SDP/21
Page 24
Elvin in the OECD paper, <T cost for each age group as
fcr r
:uv.ion in 1970'.He shows the total
when P is the population in the age group, e is the enrolment ratio, t is the ratio of teacher to students, w is the average annual salary of teacher;
for that age group, and the total cost per pupil to teacher cost per pupil is (1 + k ), the relation of teacher costs to other than-teacher costs per pupil being kr The"total national expenditure is taken as other than the aggregate of the expenditure for all age groups. Different combina tions of ev wx and ^ will be possible within tnW t-tal expenditure al
lotted..
37. The distribution of educational costs between recurrent and non- recurrent^expenditure varies from country to country and depends upon the interpretations given to capital investment and maintenance in different countries. Comparisons of expenditure on education between countries in
therefore difficult, and"an added complication is that there are consider
able variations as to the proportion of educational costs paid in the form of private fees and as to whether the public funds.are raised centrally
or locally. Subject to these difficulties, a glance at the figures of public expenditure on education in relation to national income reveals
the following range:
_i public
on education (1957-1960)^
Country
Per capita nat. ino»
in tTS $
Public expend*
on education per capita in US
Public expend*
as $ of
nat..income
U.S.A.
Prance Turkey Chile
2132 9 60 46O 310
97 0 32 5 10 0 Q 6
.■,3.0.
2.2 2.4
1/ Based on "Basic Facts and Files'' prepared by Statistical Division,
Department of Social Sciences, UNESCO,
E/CH.14/SDP/21
Page 25
National income and public
expenditure on education (1957-1960) (Cont'd.)
Country Per capita nat. inc.
in US $
Public-expend,"
on education
per capita in US
Public expend.
as % of ■
nat, income
Japan Tunisia Guatemala Peru Egypt Thailand Nigeria India
Tanganyika . : Pakistan
Burma
• . . 250,
. 159
15.5 .-.
. 125
114: 102 .. 70 66
: '■ 56
51 42"■14.6 6.7 3-5
.. 4.0
4.9
, 2.9 1,3 1.3
1.7
0.6 11.65.7 3.4 2.4
2,9 5.0
2.7 1-9 1-7
3-0 1.2 3.6
38. For an economic assessment of the demand education makes on a country's
resources it is necessary to add to educational expenditure (public and
private) the opportunity costs of the pup:la and teachers who might other wise have been gainfully employed, in production. These oosts. will, vary to the extent to which the employment market would not be able to absorb the potential labour force lost.. The distinction between money and real costs in educational expenditure is important. Where there exist unutilized supplies of educated labour, the "intellectual and white collar unemployed"
constitute an unused real resource. Measures which bring them into employ ment as teachers do not increase the "real costs" in respect of the educa tional system. The same.applies to building projects which can be under taken with existing unused man hours and material. Foreign exchange costs for the annual import of equipment and skills not available rationally are normally of the order of 5 to 7,per cent, but a number of ex-non-self- governing territories still have many expatriate teachers paid for by
grants from abroad.
Page 26
39* Given decisions as to the level of investment in education and dis tribution among sectors,.the question remains how education is best
**inanced- Although education is becoming increasingly seen as an invest
ment the practice is, of-course, to finance it from current revenue, treating it as a social service. Thus the funds available for education depend
upon the fiscal-possibilities in those countries which'tend to be inelas tic and,operating through inefficient systems. Low income countries raise on the average about 14 per cent of their national income in revenue whichhigh income countries raise about 21 per cent. This is the framework of possibilities (on current assumptions) within which public educational '
expenditure has to be viewed. Within this framework there is the limit set by the other claims on revenue, educational expenditure usually being about a fifth or a quarter of government expenditure. India and Pakistan for instance at present spend some 3 per cent of their GHP on their 'public social sector of which education takes up nearly two-thirds. The share of total government revenues falling to the Central Government is some three-fifths in India and three-quarters in Pakistan according to a measure of "centralisation" of government expenditures produced by ECAFE. The room for expansion of educational expenditure in these countries is clear ly not great without either a rise in revenue or increased foreign aid, or additional efforts to reduce and spread the incidence of the cost. It is interesting to note that three of the economically well developed coun
tries ( USA, UK, USSR ) with very different economic systems relied
heavily in establishing their primary education systems upon breaking down the problem at the central level by drawing heavily upon initiatives.
During the year 1929-30 for instance, only 4.6 per cent of the 53,647 schools in the USSR engaged on the eradication of illiteracy were paid for out of the State budget, whereas 74-4 VeT cent were supported by local municipal, district and rural budgets, and 21 per cent were financed from
extra—budgetary sources (trade unions, co-operatives, etc.). During the
same financial year the number of schools in the USSR with paid teacherswas 50,9^5 > and with unpaid teachers 46,142 (the latter coming from "anti-
illiteracy societies", factories and institutions of various kinds). In
E/CN.14/SDP/21
Page 27
the case of the great expansion of the K'f- in the last century, the building of a school was ons of the first charges on the resources of the newly established communities and voluntary teachers were widely used, 40, The-financing of education is hindered in many countries by^the fact that a large proportion of the population lives, on subsistence production outside the economy.■ Importance must thus be attached to measures of adult education which can: result in hastening the process of transition from the subsistence to- the < a?"i economy, in addition to action to push on with the focal areas likely to yield high.revenue. Educational projects which hasten this transition not only increase- production but bring sec tions of the population into a position where they can contribute to
revenue,
41, External finance to aid education may take different forms: ,(l)
financing of development measures which increase the revenue raising capa city of the countries needing aid, on the assumption that this will result in an increase of revenue, allotted to education - the political demand
for more educational facilities being very strong?. (2) adding to, develop
ment loans or grants additional sums to take care of the educational implications of the increased production and development foreseen, i,e«
treating education as an input; (3) loans or grants for specific educa tional projects such.as.technical colleges, universities, etc»; (4) long-
term loans g,t low rates of interest or grants for the specific purpose of providing.for a country's educational rurfra^tructuref education being regarded as a ba$ic service l-.ke "She system of internal transport.
42, Education ±& at present usually no" considered as an input which must be oosted: in advance and form p?.rt of a lo-?x or grant, let there is much evidence of projects having beer, retarded or rendered unprofitable from the absence of the" educated and' trained manpower to ge-u their properly started;, and the necessary educational fao-ilities to sustain its produc
tion and provide its growth. ?ho- Report of the Commission on National
Education of Pakistan for instance states: "Pakistan has already spent large sums of money on development projects and we are planning to makeE/CN.14/SDP/21
Page 28even greater expenditure in the future. The budgets for these projects provide for the cost of raw materials, labour and equipment, and also for foreign consultants and technicians. Yet no provision is made for the education and the training of those who will be required to maintain and operate the project once it has been completed or to staff a similar project elsewhere. The lack of trained manpower to create and support an industrialized economy has been a constant source of discouragement in our development effort, and it is high time we realized that to have skilled workers we must train them and that to train them we must have educational programmes that cost money. We do not build factories- in the hope that once they are completed we will be able somehow-to find the machinery necessary to operate them. Indeed the machinery is planned with
the building. It is difficult to understand why we do not also plan for the personnel required to operate and maintain such projects".
43. If this practice were adopted by financial authorities the first step would be to determine the educational implications of a project, and then
to cost these like other inputs. When a loan is being made to a country for a development project the cost of taking the educational implications
into account as an input would have to be included in the amount of the loan. The procedure would be to construct out of the manpower demands for particular projects a series of educational pyramids which reflect
the additional demand on the educational system. The additional cost of production would be included in the price of the commodities produced.
This approach is criticised on the ground that the arguments used apply to other types of social overheads and tt-t it is not feasible to atomize social infrastructure in this way: it is argued that projects closest to education in their economic implications are items like highways. The value of a highway accrues to the community as a whole over time and its
cost-benefit ratio is not wholly measurable in terms of production. The public uses the highway for many purposes, productive and non-productive, and it becomes part of the level of living of the community.
1/ Report of the Commission on National Education in Pakistan, Ministry
of Public Education (i960) p0 334.
Page 29
44. International loans and grants for specific projects such as technical colleges, schools and universities are already.a reality, but the tendency is still to" finance the "bricks and mertar" or equipment aspects;, only.
■ "This leaves the economy to bear the recurrent charges involved (maintenance,
■ teachers' salaries, etc.) and great care is obviously required to achieve the right balance between the"capital and recurrent expenditure. The
country's economic future and'fiscal potentiality has to be assessed for
the purpose of external borrowing as well as for gearing the educational system to development needs. This constitutes in effect a tenth step ad ditional to those set out in section V above, Iattnwtional loans And grants for the educational systems as a whole have not yet.been.made, but
■-some of the bilateral aid given, particularly"grants from.metropolitan or-ex-metropolitan powers, has in fact this'effect.
45. Education tends to be a smaller consumer of foreign exchange, compared with many other types of projects. But in oases involving "high.degrees of skill and laboratories, foreign expenditure may plan an; important ;part in providing equipment, machinery and the salaries of foreign instructors.
It should be noted that a country's foreign exchange priorities are not necessarily the same as those for projects requiring local currency. In such cases the right course would seem to be to obligate the foreign ex change component of the educational cost of the project at the same prior ity that the project has itself. The rest of the foreign exchange should be distributed according to the prevailing priorities for foreign exchange on the condition that the government makes compensatory local currency available. Broadly, since education depends predominantly on resources
(teachers, buildings) which are not transferable internationally except
to a limited degree, foreign aid for educational purposes has to be directed
at filling "the gap between the physically possible and .the fiscally pos
sible" plus foreign exchange requirements resulting from'the programmes
and expert guidance from abroad. This amounts to a very large sum'on a
world basis and a substantial stepping up is_, required an^the^ funds avail
able for the external financing of education, as has.been shown, by the
results ■ of ;the UNESCO Regional Conference referred.-to. above. . '
E/CN.14/SDP/21 Sage-30 .:
VIII. ASSESSING THE RETURNS ON EDUCATION
46. . This-question has been left purposely to- the end. ''One'reason'is the difficulty-of measuring the benefits of- education;' another is that, as ..ye suggested above, if .everything has "been done t'd'vrelate education to
development through its influence on manpower"and-on infrastructure there is little to "be gained, for practical purposes in trying; to forecast returns.
These will vary according, to.-the way.;:the ^educational factor is- combined
with the other factors in production in each specific case,' To the extent that .education is indispensable j--because-of its manpower and infrastructure ..jejrfac/fesr, rt&*arrQ.qu&t?&' s .economic development, its returns are the same
as.those of economic development i":Gclf,--. detailed'forecasting of returns only being relevant when there, are real'substitution possibilities,
47. Nonetheless i*t would be wrong to conclude without discussing the .extremely, interesting research undertaken in recent years to show retro
actively. ;the -contribution .-education. h&&> "in&Elfe to economic growth in: parti
cular countries. These-studies indicate that the major part of the growth in production in developed countries/over-the -last half century cannot be accounted for hy.- the inputs of physical capital, man hours,- and natural resources. ; The.;, major: part must be ascribed'to technical progress and human factors among which education plays a-prominent1role. "Professor Solow estimated that only 10 per cent 6f the growth cbuld;-be accounted for by population growth and physical'resources, leaving the remaining 90 per cent due to residual factors falling under the general heading of technological progress-v Dr.- -Massel has'published an-independent estimate for United States manufacturing-industry taken!alone, which-came to the same conclusion-^. In Europe,-^Professor Aukrust made calculations for Norway
■for the whole of national production between1900 and 1955 and his conclu
sions were similar^ In the ' UK ' Professors Reddaway and Smith-have shown
l/ SOLOW, R. - "Technical Change and -the"Aggregate'Production Function",
Review of Economics and Statistics, Vol. XXIX, No. .3? August 1957.2/ MASSEL, B, - "Capital Formation's Technological Change in U.S. Manu
facturing", Review of Economics and Statistics, ../Vol. XLII, No. 2, August' i960.3/ AUKRUST, 0. - European Productivity Review, No. 16, February 1959*
E/CN. 14/SDP/S-l
Page 31
that capital.and labour inputs accounted for only a quarter cf the increased
output per head in manufacturing industries between 1948 and 1954^/ This
type of approach is based on national accounts procedures and the statistics are used within the theoretical framework in the Cobb-Douglas production function. This form of analysis has been criticized on the ground that actual production functions, unlike the Cobb-Douglas function, are not homogeneous and that the marginal productivity of capital is more relevant to assessing returns than the average product of capital. The criticisms of the approach are not directed at the importance of the role.of educa tion, but at the measurement procedures involved and the assumptions made as to the basis on which the factors of production are actually distributed in the economies concerned.
48* ..However this may be, the residual factor approach is widely upheld as an important method, utilizing standard national accounting statistics, of estimating the contribution of increased units of labour and capital to economic growth that this factor is likely to have varying importance at different stages of development and in different types of economies, and that, the existing statistics studies mainly apply to the well-developed countries where data is available. Certain of the developing countries,
however, have been analyzed by Professor Schultz^/ and he gives the follow
ing figures in respect of^ their agricultural production: I*n the United
States (between I9IO-I914 and 1945-1949) only 17 per cent of additional
output was accounted for by increased inputs, leaving 83 per cent attribut able to the "residual" factor. For Argentina (1912-1914 to 1945-1949) the equivalent percentage attributable to the 'residual factor * >;as 62,
for Brazii (1925-1929 to 1945-1949) it was 45, and for Mexico.(1925-19:9
to 1945-1949) the percentage was 50.
49' Interesting historical cases are those of Japan and Denmark which were lacking in natural resources but obtained an earlier -nd higher rate
1/ REDMWAY W.B. and SMITH'A.D. - "Progress in British Manufacturing
Industries in the period 1949-1954", Economic Journal. March i960.
2/ SCHULTZ T.S. - "Economic Prospects of Primary Products" in "i^conoidc
Development for Latin America", MacMillan, p.317.
/ Page 32
of ^owth than their nei6hbour countries which were richly ^
p^ylal resources. In each of these oases educational develops,
2 ^^^;r
r:r::: r
,eon t.ose of the German PederaX Republic in the post
and Switzerland.
50 The case of Den.ar^ is particular^ interesting. ^ opening of^he far, lands of the ne, world too, place in the last centur, tn,
up of the farm iancu, reoeived very serious blows.
r r
minated illiy p
and China, rich in natural resources where Japan high illiteracy and large scale under-de.elcp.ont.
.51. . ^idence as to the return, fro. education
L aggreSate production function and historiC;a ^
,ut difficult to use as an Mediate guxde -n.
f0Mer, e.en if it is ^>™ "J^L^ J
with
and s.i
