EDUCATION: The New Economic Capital!

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Long back when a child was born, people worry used to be food, clothing and shelter. But these days, the basics for living starts with education. Without education one doesn’t have a self identity in a society. This identity crisis of an individual has turned into a large scale business. We don’t share our knowledge, we sell them, we buy them and moreover we make business out of education.

Education is known to be one of the most economically stable business to invest in. Let’s be honest with ourselves here, if you are lucky enough to have the money, or willing to take on the loans, you can get a degree. According to the liberal approach, the dominant model of the demand for education is based on  human capital theory. The central idea is that undertaking education is investment in the acquisition of skills and knowledge which will increase earnings, or provide long-term benefits such as an appreciation of literature. An increase in human capital can follow technological progress as knowledgeable employees are in demand due to the need for their skills, whether it be in understanding the production process or in operating machines. Studies from 1958 attempted to calculate the returns from additional schooling and statistics have shown that countries with high enrollment/graduation rates have grown faster than countries without.

Now to learn more about the educational business we need to study “Economics of Education” which according to dictionary is the study of economic issues relating to education, including the demand for education, the financing and provision of education, and the comparative efficiency of various educational programs and policies. When looking at correlations in the data, education seems to generate economic growth; however, it could be that we have this causality relationship backwards. For example, if education is seen as a luxury good, it may be that richer households are seeking out educational attainment as a symbol of status, rather than the relationship of education leading to wealth.

In the darkness of despair rises the ray of hope and that still keeps optimism in our hearts. Same goes with the story of a grocery store owner in Delhi’s Shakarpur area who teaches hundreds of poor children in his open-air free school under a Delhi Metro bridge. Soon like every other good work, his work was recognized by international organization. Now, his school is getting funded by the well-wishers. It is known as “FREE SCHOOOL: Under the Bridge” by Rajesh Kumar Sharma.

So educational advance is not the only variable for economic growth, though, as it only explains about 14% of the average annual increase in labor productivity over the period 1915-2005. From lack of a more significant correlation between formal educational achievement and productivity growth, some economists see reason to believe that in today’s world many skills and capabilities come by way of learning outside of traditional education, or outside of schooling altogether. Among all the theory of economists available, the classical Marxian paradigm sees education as serving the interest of capital and is seeking alternative modes of education that would prepare students and citizens for more progressive socialist mode of social organizations.

Thus, looking at the status of the education in any country we see most of the long term investment is being done on education and in return not only an individual gains the benefit, infact it is a social development returns. Though the education inflation increases almost every year but investment pays off if wisely invested.

SOURCES:educationnext.org/education-and-economic-growth, https://en.wikipedia.org/wiki/Education_economics, http://www.hindustantimes.com/delhi/a-school-under-metro-bridge-teaches-these-delhi-slum-children/story-Qr3EV279SarAME4K6N8orL.html