RESEARCH ECONOMICS OF EDUCATION: A THEMATIC TREND … · Research in Economics of Education: a Thematic Overview 3 aspects of education if they have some reference to the socio- economic

Research in Economics of Education: a Thematic Overview 1

CMDR Monograph Series No. - 14

RESEARCH ECONOMICS OF EDUCATION:

A THEMATIC TREND REPORT

Dr. P.R. Panchamukhi.

CENTRE FOR MULTI-DISCIPLINARY DEVELOPMENT RESEARCHJubilee Circle, DHARWAD-580001, Karnataka, India

Ph : 091-0836-447639, Fax : 447627E-mail : [email protected]


RESEARCH IN ECONOMICS OF EDUCATION:A THEMATIC OVERVIEW

Dr. P.R. PANCHAMUKHI.

Economics of Education whichdeveloped as an offshoot of the interestof the economists and policy makers inthe problems of economic development,appears to have got an unshakable placenow in social sciences as an importantcomponent deserving the attention of theresearchers and policy makers. A numberof issues relating to the economic aspectsof education have emerged in the courseof the research studies. These issues havegone beyond the initial themes ofeconomics of education which related tothe problems of costs, financing andreturns to education. The new issueswhich have attracted the attention of theresearchers in social sciences relate to thediverse themes such as wastage andstagnation, economics of studies by theforeign students in India, brain drain,problems of educated unemployment,economic dimensions of differentmethodologies of transmitting knowledgeto students, distributional issuesconcerning the questions of access to andutilisation of the educational opportunitieseducation and economic reforms, etc.Inter sectoral perspectives abouteducation and other sectors of the

economy have further enriched the socialscience perspectives on education.

At this stage of the developmentof the interest of the social scientists ineducation one feels extremely encouragedfrom the fact that education has no longera restricted scope now, as the concern ofpedagogy and pure educationists per se.On the other hand, the recentdevelopments in the researches oneducation have also made the terms ofsuch sub-disciplines as economics ofeducation, sociology of education, Politicsof education etc., as misnomers. This isbecause no research study on educationcan be put under a water tightcompartment of these sub disciplines. Inother words, one cannot visualize a studyin economics of education per se withoutsocilogical and political perspectives.Similarly, a good study in sociology ofeducation cannot be divested of theconsideration of the economic and politicaldimensions involved. With suchconfessions we have to consider thestudies on economics of education. In thepresent trend report on economics ofeducation, we wish to consider some ofthe recently completed studies, on various


aspects of education if they have somereference to the socio- economicdimensions of education or which havesome focus on economic aspects. Ourapproach would be relatively more liberalin including the studies under this trendreport rather than excluding them inrecognition of the interdependencies ofdifferent aspects of education. Such anapproach, it is believed, is likely to bemore rewarding even for a student of thenarrow concerns of ‘pure’ economics ofeducation’ itself.

From a quick look at the studiesundertaken in India on social scienceperspectives, particularly ‘economics ofeducation’, one finds that most of thestudies are largely empirical in nature. Theconceptual and rigorous theoreticalstudies in economics of education aremissing. It is in this sense that we feelthat the discipline of economics ofeducation as developed so far through thereviewed studies in India has a long wayto go in terms of strengthening of therigorous conceptual foundations of thediscipline.

A qualification needs to be addedhere. The thematic review below is basedupon only the studies completed mostlyin the University system by the studentsfor their degrees. The above observationswould therefore be applicable only tothose studies. Only occassionally, fewother studies have been reviewed under

different themes. The plan of the overviewwould be,

a) raise the conceptual issues relating tothe theme,

b) present critical thematic review of theavilable studies in brief in this generalbackground, and.

c) suggest researchable areas for futurework in the background of the existingstate of knowledge.

The themes considered are:

1) Inter linkages between education andsocio-economic variables.

2) Problems of Inequality in Education:The Economic Dimensions.

3) Issues in Educational planning

4) Problems in Educational finance.

I. INTER LINKAGES BETWEENEDUCATION AND SOCIO-ECONOMIC VARIABLES

That education has severaleconomic dimensions was recognized bythe thinkers in India since long , Forexample the eminent sanskrit poetBhartrahari (of 10-11th century AD ?)termed education as indestructible wealthhaving significant use value and exchangevalue. It is only during the period after1930’s, or more specifically, after 1960’sthat economics of education as a


discipline was ‘born’. Series of studies onestimating the economic value ofeducation strengthened the foundations ofthis new discipline. The reciprocallinkages between economic variables andeducation also widened the scope of thediscipline. Still later, the simultaneousinteractions between the effects of socio-economic variables and educationalvariables came to be considered in someof the technical studies (Simultaneousequations model developed by Wheeler inthe World Bank papers can be cited as anexample). In India, in recent years, suchdirect and reciprocal linkages betweensocio-economic and educational variableshave been examined in a number ofempirical studies. The studies are rich intheir perspectives, covering several subtleaspects of these linkages. We propose toattempt a thematic review of the recentstudies highlighting the effects of educationon socio-economic variables first, as, thatis how the literature in economics ofeducation seems to have developed. Aftersuch a thematic view, we propose toreview the recent studies focusing on theeffects of socio-economic variables oneducation. Overlaps cannot be avoidedfor obvious reasons. The studies focusingon the socio-economic aspects of wastageand stagnation have been chosen for aspecial review in view of the crucialsignificance of wastage and stagnation inachieving the goals of UEE and Educationfor all.

I.A: EFFECTS OF EDUCATION ONSOCIO-ECNOMIC ANDDEMOGRAPHIC VARIABLES:

That education has significantinfluences on economic status of theindividual and the family and theproductivity of the entire economy hasbeen the subject matter of a number ofrate of return studies which were part ofthe first generation contributions ineconomics of education. A number ofquestions are faced by the researchers inthis connection. Some of the majorquestions are outlined below.

Major Issues:

1) What is the mechanism throughwhich education influences theeconomic variables ? Doeseducation directly influence theproductivity of the individual and theproductivity of the economy as awhole ? What type and level ofeducation would have the favourableeffects on the economic wel-being ofthe individual and of the country as awhole ? In other words, is it possibleto identify the critical minimum effortof education for realising theeconomic gains ?

2) Are the benefits from education forthe individual consistent with thebenefits for the economy as a whole,or if they are not consistent what are


the factors responsible for thisinconsistency ?

3) How does education interveve as animportant determinant of thedemographic variables ? Is it possibleto manoaver education to relise thegoals with respect to thedemographic variables ?

The Studies:

The studies under review do nottouch upon all the above problems.Unfortunately, very few, rigorous studiesare undertaken by the researchers ineconomics in different universities andinstitutions on some of the above issues.

The rates of returns studies whichare still popular with students ofeconomics of education have their ownlimitations. (P.R. Panchamukhi, NIEPAJournal) The empirical testing of the rateof return approach to allocation ofresources in education and also a numberof conceptual problems in consideringeducation as an agent for capital formationin human beings have been succinctlyoutlined in a number of studies broughtout in a volume edited by Dr. V.N.Kothari1991). Such studies were attempted fordifferent communities, gender groups,states etc., Some of the studies alsoexamined the relevance of education forimprovement in agriculatural sector.

A study of education of women ina developing state of Orissa (Sailabala

Debi 1992) showed that the rates ofreturn to women’s education are lowerthan those of mens’ education. In somecases, in view of the high wastage andstagnation for women, the rates of returnto education for them were even negative.In the context of a backword socio-economic environment any improvementin family income is found to lead to,preference for education of male membersin the family to that of the female members.This is a some what strange and interestingresult. If resources are not adequatelyallocated for women’s education then therates of returns for women’s educationshould be even higher than those for men’seducation, implying that there is underinvestment in women’s education. Thelow rates of return for womens’ educationas obtained in the case of Orissa,however, have to be interpretted in termsof the overall low rates of return foreducation for both men and women. Thisalso may suggest that the rates of returnfor education cannot be considered as adependable guideline for policy making inresource allocation !

More than the rates of return toeducation women’s education dependsvery much upon educational level of theparents themselves.

Which type of education is likelyto be crucial for socio-economicupliftment?

Does education influence theattitudes towards family planning and small


family norm ? This question in a limitedway was examined in the context of adulteducation programmes in Punjab. (H.Sodhi 1992). On the basis of 628 ruraladult families of Punjab from 32 adulteducation centres it was found thatparticipation in adult educationprogramme positively influences theattitude towards small family norm. It isinteresting that neither the size of the familynor the socio-economic status of themembers had significant effects on theattitudes towards small family norm,except through an interaction effect onsuch an attitude. The adult education ofrural women in the age group of 15 - 35was found to have positive effect on suchan attitude. In another study for Punjab(T.S. Sodhi and M.N.Singh 1990) it wasfound that education does intervene in asignificant way to alter the responses ofthe scheduled caste members in rural andurban areas so far as their attitude towardsthe population problems are concerned.Thus, education is found to be moreeffective in an urban environment than ina rural environment. Can we in otherwords, say that it is the success whichsucceeds so far as the effect of educationon demographic variables is concerned ?

A clearer evidences of the role ofeducation for improvement in income waspresented in a study for Andhra Pradesh(C.Chandra Reddy 1988) using the datafor 1150 farmers drawn from variouseducational and cultural backgrounds

from the two districts of Mehboobnagarand Medhok of Andhra Pradesh. It wasfound that education of the farmers andtheir agricultural income are highlypositively co-rrelated. The modusoperandi of the influence of education onfarmers ‘income is through the farmers’exposure to mass media programmes,which educate them about differentaspects of the agricultural activities. Inan earlier study for Punjab & Haryanawheat belt,(D.P. Choudari 1968) it wasshown that stipulated number of years offormal schooling for the farmers is alwaysadvantageous. The present study(Chandra Reddy) also showed that thereis a positive relationship between thedegree of exposure of the farmers to massmedia - extension education, and theiragricultural income. From these resultsthe study suggests that suitable extensionprogrammes for the farmers need to beorganised, so that the agricultural incomeimproves further. Though the study usessome of the simple statistical techniques(the co-rrelation co-efficient) it appearsthat the vast data for 1150 farmerscollected by the researcher has not beenfully used for developing a more rigorousstudy of the linkages between educationand agricultural income.

Such sectoral studies of estimatingthe effects of education on economicvariables are not many though there areseveral studies using the earnings data ofgeneral population and linking them with


education data. One such sectoral stagesfor few firms in electrical and electronicindustry in a city concluded that the socialrates of return to education are fairly highin this industry (V.N.Hebbare-1989)

A SOURCE OF MISPLACEDPRIORITIES ?

From the above brief review weare back in the question raising mode.Have researchers overacted inemphasizing the economic value ofeducation neglecting the primary functionsthat education is expected to perform ?It is time now that researchers have toattempt such a self introspection. Someof the rigorous studies in the literature(V.N.Kothari-Ed. 1991) have raised suchquestions showing that income and therates of return are a function of severalvariables like labour market conditions,social background, native intelligence,occupation, industry etc and not justeducation. Many more such multi- variatleanalytical studies are needed to preventover stress of only the economicdimensions of education.

I-B: EFFECTS OF SOCIO-ECONOMIC FACTORS ONEDUCATION:

The studies in Economics ofEducation have focused on the importanceof education for socio-economic status.The reciprocal linkage between the socio-economic status and education is also

equally important. Some of the firstgeneration studies in this field tried to showhow in the low income countrieseducational development is likely to beneglected. In a micro level setting theless advanced social status was also foundto be related with lower educational statusof the individual. Educationalbackwardness of the scheduled caste andscheduled tribe population brought out bya number of studies is illustrative of sucha linkage. In the same way, the educationalbackwardness of the blacks in the Unitedstates, of the economically less developedcountries in the African sub continent aretaken as the cases of evidence of such acorrelation between the socio- economicstatus on the one hand and educationaldevelopment on the other.

Major Questions:

A number of questions can beraised in this context. In what way thesocio-economic factors influence thedifferent aspects of the process ofeducational attainment? In other words,do they influence the choice of thecourses in education ? Do they affect theoccupational preferences of the studentswhile they are still in the process ofeducation ? Does SES affect theachievement motivation of the students ?In what way are the socio-economicstatus and scholastic achievements related? What do we mean by the socio-economic status which intervenes in


different aspects of education ? Is itpossible to identify the variables underSES which can be considered as policyvariables i.e. manoverable, in order toinfluence different aspects of education ?What percentage of the variables underSES can be so considered asmanouverable and what percentage arebeyond the control of the policy making ?How strong are the former group ofvariables as compared to the latter group? Thus, there are several conceptual andempirical questions which need to beanalysed while examining a flow ofcausation from the socio-economic statusto education.

Materialistic Interpretation ofEducation ?

Unfortunately, the studies that areavailable in this field are mostly empiricalin nature without giving a semblance oftrying to develop a body of theory orconceptual insights into the effects ofsocio-economic variables on education.The studies also appear to be somewhatmechanical in terms of methodology andthe direction in which the generalizationsare drawn.

Most of the studies which try toexamine this type of linkages are mostlybased upon the data for different levels ofeducation (standards) derived from adhocfield investigations. The studies on socio-economic and familial correlates ofachievements (P.Usha 1991, Vinita

Trivedi-1988, N.Sahay-1991,R.Ramaswamy-1988, R.Muthumanicam-1992, Indra -1991, Harikrishnan- 1992,Garg-1992, M.Ganguli-1989, P.PaulDevaneshan-1990) show that the socio-economic conditions of the family are fairlyclosely associated with the academicachievements of the children whichever bethe level of education that we consider. Forgirls this correlation is found to be closer. Thatis why the poor families are discouraged fromsending their girl children to schools and highereducation. While there are many factors likepersonality, achievement motivation, selfconcept, study habits, etc., which contributeto the scholastic achievements, the role ofsocio-economic status cannot be consideredto be insignificant. In fact, all these otheraspects are also likely to be dependent uponthe socio economic status itself.

Such a meterialistic interpretationof educational achievements may befrowned upon in the conventional contextof achievement being considereddependenat upon only native intelligenceand ‘pure’ education. Even thecommitment of the students to thescholastic pursuits was found to be closelyassociated with the economic status. Oneof the studies (C.M. Yeole -1990)concluded on the basis of a study of 500adolescent students from highersecondary institutions in Kolhapur city thateve teasing, gangstering, bunking of theclass etc. were more prevelent amongstudents which came from richer families!


It was less prevelent among the childrencoming from poorer families. There ishowever, a sense of purposelessness inthe pursuit of their education for manychildren from the poor families inparticular. Under-achievement was foundto be prevelent more among boys ratherthan girls, among rural students, amongbackward caste students and among upperage group students as compared to theothers (D Seethamoni- 1988). This showsthat the socio-economic status which isrelevant for educational achievements isa highly complex phenomenon. Severaltypes of permutations and combinationsamong different socio-economic variablesare possible, each permutation andcombination indicating one type of socio-economic status. One can understand inthis context why some of the studies inthis field have even questioned therelevance of socio-economic status foreducational achievements. The variousscales of socio-economic status constructby scholars in this field so far can beconsidered as different possibilitiesimplying that there is much scope forfurther refinement of the concept itself.A study for Aligarh district for example(Anil Saraswat 1988) concludes that it isthe school environmental factors which aremore important than the socio-economicbackground factors for the students so faras the academic achievements ofadolescents in different types of schoolclimate are concerned. The achievement

motivation is found to be a major factorin determining the scholastic achievementof the students even without the influenceof the socio-economic status according toanother study (P.Paul Devanesan 1990).

Whereever the socio economicstatus factors are found to be playing asignificant role in determining scholasticachievements, efforts may have to bemade to alter them to facilitate betterscholastic achievements.

The socio-economic status,educational aspirations, scholasticachievements, value formation, etc.,function under a mutually reinforcingmechanism. For example, the vocationalchoices of higher secondary studentswere found to be independent of theirsocio-economic status according to onestudy (Robert and Pankajam 1988).According to another study (LaxmiSrivatsva 1988) vocational developmentis related to academic achievements andsocio-economic status but not to genderand different levels of education.

Education is found to alienate thestudents from their moorings and developdifferent sets of values. For example,irrespective of the socio-economic status,the students are found to be having negativeattitude towards manual job(P.Subramanyan 1990). Education itselfhas a tendency to take away the childrenfrom thier familial backgrounds,


(B.P.Varma and R.L.Nayak -1990 ).Socio-economic status was also not foundto be significant in its effect on the learningstyles of the students (B.P.Varma, AshaTiku 1990). Though there are not manystudies on the mechanism of how thesocio-economic factors influenceeducational achievements, general insightscan be derived from some of the studiesabout this issue. For example, socio-economic status could influence mother’sreactions towards children’s behaviour. Ifthis reaction is positive then children maydevelop achievement motivation.However, in the families with lower socio-economic status, the mother’s reaction tothe behaviour of children of pre-school agewas not very much positive (G.Srilatha1988). The socio-economic status mayalso determine preferences of the parentsfor different catagories of schools. Forexample, parents with better socio-economic backgrounds are found to preferun aided pre-primary schools to aided pre-primary schools, not only because theformer provide better physical facilities inthe place of learning but also because theun-aided pre- primary schools are used agood as screening device at entry points(R.Sharma 1992).

Never to be conclusive ?

The upshot of these variousstudies under this broad theme of flow ofcausation from socio-economic status toeducation is that the studies are not

conclusive. The materialistic interpritationof educational development has yet totake firm roots as a bases for policymaking in a country like India. The studiesdone for the Coleman Commitee in theUnited States on the question of socio-economic background and education hadmethodologically stronger foundationsand hence they could have a higher degreeof acceptability. So far as the studies inIndia are concerned, it may be observedthat they have a wider coverage in termsof considerations of different aspects ofthe problem, but have lesser depths interms of their methodological strengths. Insuch a background, the results cannot beconsidered to be conclusive. This isevident from the precisely contradictorysets of conclusions from the variousempirical studies undertaken with differentregional data.

I. C ECONOMIC ASPECTS OFWASTAGE AND STAGNATION INEDUCATION

A number of studies on wastageand stagnation at different levels anddifferent types of education attempt tobring out the importance of socio-economic factors in determining thewastage and stagnation.

The problem of wastage andstagnation obviously would have verysignificant socio-economic implications.In that, the social costs from wastage and


stagnation would be unbearable in thebackground of scarcity of the physical ,financial manpower resources available foreducation in a developing country likeIndia. The studies range from the analysisof the problem of the wastage andstagnation in the context of a given city tothe state and groups of states in thecountry. A study (D.S. Chavare 1991)showed that even in an educationallyadvanced environment the drop out ratesare fairly high. The drop out rates werehigh for those living in slums, and thosewho live below poverty line in which thedaily wage workers are found. Wastageand stagnation is a major problem ineducationally backward states, whichalso incidentally are economicallybackward, like Andhra Pradesh, Assam,Bihar, M.P., Orissa, Rajasthan, U.P.,West Bengal, and Jammu & Kashmir.These rates are high for ScheduledCastes and Scheduled Tribes, for childrenfrom the families with low economicstatus, and for girls. (studies by J.K.Gupta , P.K. Rastogi and M.K.Gupta1989, J.K. Gupta & A.B.L. Shrivastav1989). About whether the ruralenvironment is associated with higherwastage rate there is no agreement amongthe researchers. Eventhough majority ofthe studies reviewed here showed that inthe rural areas the wastage rates are higherthan in the urban areas (JnaneshwarSingh 1992) a separate study forRajasthan ( J.C. Vyas and others 1992)

shows that the drop out rate in urban areasis more than in the schools of rural areas.Some of those studies also show that thereis no significant relationship betweenphysical facilities in the schools and thedrop out rate contrary to a common belief.This is a startling conclusion (J.C. Vyas1992) questioning even the basic premiseof the operation blackboard measure.The parental perceptions, the studentperceptions and teachers’ perceptionsabout the causal factors for drop outamong the school children by and largeconverge though the teachers havehighlighted the specific factors of frequenttransfers of teachers and large family sizeilliteracy of parents etc as the basic causes(B.S. Yadav 1991) it has been also shownthat even absenteism and regularity inattendance of the children, which mayultimately influence the academicachievement. are closely associated withthe socio-economic background of thechildren. A study for U.P. (G.S. Rawat1987) shows that the drop out rate forchildren coming from the higher socio-economic status is relatively higher thanfor children coming from lower economicstatus: This indicates the negative effectof better economic conditions onattendance of the children. Normally,wherever the economic compulsions aregreat children drop out to make good theeconomic deficiencies. Another study forsecondary school students showed thatfor the girls drop out rate is higher than


for boys as the girls are required forhousehold work as per prevailingpractices. That the economic compulsionsare the causes for dropping out may alsobe indicated by the occupationalreferences of the dropped out children(M.K. Pathy 1990). Such preferenceswere quite different from those of others.The dropped out children preferred theclerical jobs in the employment market.In the urban areas occupational aspirationof the dropped out children weresomewhat better than in rural areas. Thestudies also showed that the dropped outchildren from the urban areas were foundto be less intelligent than those whocontinued in their education. In the ruralareas the dropped out children werefound to be more outgoing though lessintelligent. (G.S. Nayal, S.Nayal 1989).While several socio-economic factorsmay be responsible for the problem ofwastage and stagnation in education thepure educational factors also have somerole to play in this. For example thedetention system and dropp out rate arefound to be much more closely associatedthan the socio-economic backgroundfactors and the drop out rate(Venkatrama Reddy 1989).

What do the droppedout childrendo ? What are their economic aspirations? Do they wish to continue their educationunder the non formal system ? Theseare some of the issues which may bother

the policy makers. It is found that thereis no smooth sail over from formal to thenon formal system for the dropped outchildren mainly because of the lack ofproper facilities, absence of womenteachers, distance of the non formaleducation centre from the place of the stayof children etc. (H.K. Gurao 1989)

From all these studies it seemsclear that the socio- economic factors doplay a role in determining whether thechildren continue their education or dropout. If it is possible to classify thesesocio-economic factors as those whichare manouverable and those which are notthen the studies would have a significantinput for the policy makers. Whiledrawing inferences about such matterscare has to be taken not to disturb theother policy thrusts, Thus for achieving theobjective of lower wastage and stagnationin education, improvement in theeducational level of the parents orimprovement in the appreciation of thevalue of education by the parents,improvement in their economicconditions, weakening of the taboo againstgirls education, provision of adequatefacilities in the school system for boys andgirls etc. may be suggested as thedirections in which the intervension maybe helpful. However, if the wastage ratesare found to be high for rural areas ascompared to urban areas the policyconclusion should not be in terms of


shifting of children from rural areas to theurban areas. The policy conclusion oughtto be the provision of adequate facilitiesin rural areas which are comparable tothose obtaining in urban areas.

II THE PROBLEMS OFINEQUALITY IN EDUCATION:

While we may appreciate thateducation intervenes in a significant wayto improve the socio-economic status ofthe indivudual and of the society as awhole, in order that education performsthis function effectively there ought to beequality in education. In actual practicewe find that there are serious inequalitiesin the field of education. The problem ofinequality can be considered under thefollowing heads.

a) Inequality in the distribution of theeducational facilities.

b) Inequalities in access to educationalfacilities.

c) Inequalities in utilisation of thesefacilities.

All these three facets ofinequalities which may be expressed interms of inter regional inequalities or intercommunity group inequalities., intergender inequalities, inter personalinequalities etc., would be a function ofthe socio economic factors. It has beenfound that a relatively less developedregion in the country suffers frominadequacy of educational facilities as well.

Since the people in such less developedregions consider education as an item oflow priority, the access to the educationalfacilities is not equal; for the same reasonthe educational opportunities are notequally and fully utilized by the people.In this sense, the role of education as anagent for economic improvement will notbe realised at all in such regions. In theIndian context, the educationalopportunities in the rural areas are foundto be inadequate at all levels of education.The special educational reforms aimed atequality in the distribution of educationalopportunities have not succeded to theextent expected. (P.R. Panchamukhi(Ed) 1989) We are not reviewing all thestudies pertaining to inequalities ineducation. Such a review is presentedelsewhere in this volume on Researchsurveys. We would, however, consideronly studies which emphasize economicaspects and also some of the measures totackle educational inequalities. Two suchmeasures are considered for a specialreview of their economic aspects,

a) Non formal system and

b) Measures based upon intere-sectorallinkages.

II. A. INEQUALITIES INEDUCATION: UndisputedConclusion.

Inter regional inequalities, intercommunity, inter-caste group, inter-personal inequalities etc., in education


would have significant implications forsocio-economic status of the individual.India presents a polar case modelconsisting of high degree of access to andutilization of educational opportunities andalso high level of internal and externalefficiency of educational system at one endand very low degrees of access to andutilization of educational opportunities andalso low levels of internal and externalefficiency, on the other. While there is astate of Kerala with high levels ofachievements; there are also theeducationally backward states likeRajasthan, Bihar and Orissa.

Even in a less developed state theextreme intra-regional inequalities areobserved. In the case of Orissa forexample (R.Mahapatra 1988) the interdistrict inequalities are fairly high. In thetribal districts of the state the educationalfacilities are not satisfactory at all. Evenover a period of time the improvementsin the facilities in such districts is not stillquite up to the mark. Several factorscontribute to such inter-regional and intra-regional inequalities in education. Thedeprivation of different communities andregions and sub- regions are multi-dimensional; the pace of development isuneven, the resources are scarce andeducational planning exercise is almostnon existent and it is also ineffective inactual practice. That educationalbackwardness of Orissa is also due toless allocation of resources to education

is brought out in another study ( C.Sahoo-1990) Per-capita expenditure oneducation in the state of Orissa waslowest in the country on the eve of thefirst plan. The per-capita expenditurecontinues to be low even there after. Thisalso shows that there is no concertedeffort to develop education in a plannedway in the state.

While it is true that educationalinstitution is a replica of the societyreflecting all types of stratifications that arewitnessed in the Indian society, eachindividual educational institution seems tobe designed to cater to different socio-economic groups of the society. Schoolscatering to children from different socio-economic strata are found to offer facilitiesthat are different and disperate. Hence,they in turn create further inequalities inthe society. For example IITs and themanagement institute normally cater to thestudents from the upper echelons of thesociety. There are innumerable arts andsciences colleges in the country cateringto the needs of the children from lowersocio-economic strata. The public schoolvs the non-public differentiation is too wellknown which would perpetuate andstrengthen the prevailing elitism in thesociety. A study of three schoolsbelonging tp three socio-economic strataof the society from Bombay (R.S.Britto1988) clearly brought out the positiverelationship between the class to which aschool caters on the one hand, and the


academic performance of the students,physical facilities available, home supportto education etc., on the other. Sincesocial backwardness and economicbackwardness seem to be converging inthe society, the improvements in theeconomic status realised through differentpolicy interventions might be the suggestedpolicy implications of such studies forover-coming the educational inequalities.Educational inequalities are found not onlyas between different communities, they arefound also within a specific community.In fact, the intra-caste and communityinequalities are found to be more severethan the inter-caste and communityinequalities. (G.Chinnappan 1987).Problems of income distribution can betackled by providing equal educationalopportunities, other things remaining thesame. In the case of the muslims forexample, the educational inequalities arefound to be grave. Particularly with regardto the girls among the Muslims theeducational inequalities have been quitelarge in view of the social customs, lackof adequate facilities (say theneighbourhood schools), low economicstatus etc. (S.K.Awasthi 1992). Certainsocio-economic measures have beensuggested by some researchers toimprove the situation. A study of 960students from Kumaun University(A.R.Bisht - 1990) showed that the socio-economic status and the vocational stressare negatively related and hence thereservation policy in employment should

be based on the socio-economic statusof the individual. Even in the process ofeducation different aspects depend verymuch upon the economic conditions of thestudents. The policy measures forovercoming the educational inequalitiesmay consist of those aimed at socio-economic improvement. Since incomeand language ability are found to bepositively related (C.B.Devi 1991) itfollows that measures to improve theparental income would lead toimprovements in the language ability to thedeprived children. Interventions can alsobe thought of from the side of educationitself. For example special schoolingfacilities for the deprived children,employed children (as the study byA.J.Yadav outlining educational measureswith regard to the Hotel workers inKolhapur district shows) muslim girls ingeneral and girls from the socio-economically backward communities inparticular, tribals etc. The AshramaSchool Reform and the neighbourhoodschool reform suggested by the EducationCommission, (1964-66) supplementaryteaching aides for the deprived childrenetc., can be considered as usefulinterventions from within education toovercome the educational inequalities. Inother words, issues of social deprivationand poverty issues can be integrated ineducational policy so that the socio-economic hindrances for educationaldevelopment are suitably handled.(P.R.Panchamukhi 1990)


II. B. SELECTED MEASURES TOTACKLE INEQUALITIES

When different types of inequalitiesexist, it implies the principles of equaltreatment of equals leading to horizontalequality and of unequal treatment ofunequals leading to vertical equality areflouted in actual practice. In a country withmany levels of socio-economic straficationthe principle of unequal treatment ofunequals would be extremely necessary. Inthis sense, the educational opportunities fordifferent categories of population will haveto be necessarily different. The non formaleducation, distance education, or openlearning system would be one such reformfor tackling problems of socio- economicinequality and the problem of educationalinequalities.

II.C. NON FORMAL EDUCATIONAS AN EQUALITY REFORM :ECONOMIC ASPECTS

Most of the studies in Economicsof Education focus primarily on formaleducation. However the educationalactivities take place through differentmethodologies. We may classify theeducational activities in the followingchannels out of which some methods maybe useful for tackling the problems ofinequalities.

(a) Informal Education at home through theparents and the members of the family.

(b) Informal Education through the peer

group in teractions. and

(c) Informal Education through interactionsin the society and the work place.

As against the above categories ofinformal education there are followingcategiries of formal education and training.

(a) Formal Education through the schoolsystem

(b) Formal Education through organisedprogrammes on the job. and

(c) Formal Education in armed services.

In addition to the above informaland formal channels of educationusefulness of non formal education channelalso needs to be appreciated. This channelis in a sense, combination of the mainfeatures of informal and formal channelswith characteristic flexibility. The non-formal primary education classes, non-formal adult education programmes, non-formal distance learning schemes whichhave a linkage with the formal system etc.,may be considered under this cetagory.

INFORMAL CHANNELS:

Just as in the case of the formalsystem, the socio-economic methodswould play their role with regard to all theabove aspects. For example, in the non-formal channels of education there is anopportunity cost of time of the trainerwhile he or she is transmitting someknowledge to the children or members of


the relevant group. Where resources forinformal education are available in plenty,there is likely to be a less burden on theformal system and also on the non-formalsystem. The informal channel wasemphasized in Indian indigenous systemof education. Even though the thrust ofthe indigenous system has disappearedthe system still has left its importantcomponents in the educational system asa whole. The institution of the family, theinstitution of the peer group (friends’circle, informal societies, debatingsocieties, Open intellectual competitionsetc.) can all be considered as the vehiclesfor informal education having significant socio-economic implications. With the mass mediabecoming more and more crucial intransmiting information (say, through the quizprogrammes) the informal channel hasbecome obviously a very crucial componentof the educational system. With the termeducation being defined in an eclectic sense,the developments in the job market in termsof, say, introducing its own system ofscreening, and not depending upon the degreecertificates from the formal system, the roleof the informal channel of education hasassumed an added importance. Thus a boyor a girl who is better informed through theinformal channel of education is likely to standa better channel in the job market so far asthe employment opportunities, opportunitiesfor improvement in the rewords and workingconditions etc., are concerned.

Unfortunately these aspects ofeconomics of informal education have notreceived any education by researchers in thestudies covered under the trend report. Thismay suggest an area of tremendous researchpotentials for the researchers in the future.

NON-FORMAL CHANNEL:

So far as non-formal channel ofeducation is concerned some studies havebeen conducted dealing with the economicaspects of open learning system, adulteducation, non-formal education, etc. Thesestudies can be grouped under twocategories:

a) The studies bringing out the role ofthe socio-economic factors in thesuccess of these alternative educationprogramme in general and theperformance of the participants in theeducation programme in particular.

b) The studies outlining the effect ofthese programmes on the socio-economic conditions of theparticipants as well as the region inwhich the participants are living.

II.D Questions about Open learningSystem and Non-formal methods:

There are a number of questionswhich are faced in connection withdistance education or open learningsystem. The questions are :


a) Are open learning system and nonformal methods equally resourceefficient and comparable with theregular system of education , in termsof the educational outputs ?

b) Is open learning system more costeffective as compared to the regularsystem ?

c) What are the problems of financingof open learning system ?

d) How have the different methods ofopen learning system likecorrespondence cources, and the useof mass media (particularly theelectronic media) been effective inrespect of different levels ofeducation and for different types ofeducation (science education,vocational education liberal educationetc.) ?

e) The experiments in different states andregions of the country (rural andurban) fared ? In other words, isdistance education successful only inthe advanced regions and not in theless advanced regions ?

II.E. THE STUDIES:

The studies in this field underreview have covered some of theseaspects. A review of the facilities fordistance education at the higher level hasfound that the facilities are unevenlydistributed in the country (M.M. Anasari

1989). The average per student cost ofdistance education was found to be 15-25 per cent of the cost of the formalsystem. As a result, the universitiesoffering correspondence courses werefound to have revenue surpluses onaccount of the correspondance courseprogramme. It is interesting that despitethe apparent cost effectiveness of distanceeducation the returns from distanceeducation are necessarily spread over aperiod of fewer years as compared to theformal system of higher education. Thisis because, the students taking to distanceeducation courses are relatively older inage as compared to the students in theregular system. Considering such adifference in the student composition fortwo systems of education the costeffectiveness of distance educationappears to be doubtful. In any case thelow economic cost of educational deliverysystem alone should not be the solecriterion for promoting alternative systemof education. In a study of distancelearning system for B.Ed., level (RenuGoutam 1990). It was found that theinstitutional variables contribute positivelyto the success of distance learning. It wasalso found that distance learning wasequally effective compared to regularsystem. Similar questions were raised withregard to the financing of INGOU(Mrudula 1991) it was noticed that thereare such a system is more equitable. Thespecific regional studies do not alter the


thrust of the above conclusions. The studyfor Rajasthan, for example (M.L. Gupta1988) shows that per capita costs ofcorrespondance education are about lessthan 1/3 of the regular system of education.The per capita costs at the under graduatelevel are, however, double the costs atcolleges, though at the post graduate levelthe costs are almost 1/10 of the costs atthe University Departments.

Some studies have revealed thatthe correspondance courses are notmanaged quite efficiently , because theincome from correspondance courses atleast for Rajasthan was found rising lessfast as compared to the expenditures. Theoverall expenditures have risen five timesin just 12 years. The Parkinsons lawseems to be applying quite vigorously inthe case of the correspondence coursesas the administrative expenditures(expenditures on establishment)constituted a major percentage of the totalexpenditure and they are also found to berising faster than the expenditures on thetypical educational heads like teachers’salaries, expenditures on books andjournals etc. It was intriguing that the lattertype of expenditures were found to bedeclining over the period of time. On thewhole, though the correspondanceeducation in particular and distanceeducation in general are taking firm rootsin the Indian educational system theirreceptivity does not seem to be very high.Students still have a differential valuation

of open learning system as comparedto the regular system. Further, therehave been no significant experiments ofopen learning system at the school level.There are a number of aspects of openlearning system which have not receivedthe attention of the researchers in thefield. Obviously, this area shouldprovide interesting opportunities foreconomists to probe further into thesocio economic aspects of thisalternative system to the formal system.

The non formal educationprogrammes through electronic mediahas been found to be effective so far asworking children are concerned. Froma study of 60 working children inAndhar Pradesh (J.P. Basker and S.Thangasamy 1990) it was noticed thatthe economically deprived children whowere working, could improve theireconomic conditions and also couldtake good advantages of the socialawareness programmes through thevideo lessons.

The other alternative methodtried for formulations of improving theaccess to stills and knowledge forthose who were deprived of theparticipation in the regular system arepolyvalent education for industrialworkers. Based upon a study of 400workers, 30 functionaries, and anumber of policy makers, resourcespersons, boards of management etc. (


R.Bagria 1991) in Delhi and Chandigarhit was found that workers do getsignificant advantages from Shramikvidyapeeths which were disseminatingspecific aspects of education. It was alsofound that while all methods of educationhave been essentially spending activitiesShramik Vidyapeethas have been able tomobilize additional resources through theirown efforts.

Thus, the non formal education hasbeen rightly suggested as an alternativesystem for the regular system in a countrywith extreme socio economic inequalities.More rigorous efforts, however need tobe made, to make this alternative systemmore effective. It has been found from thestudies that there have been a number ofdrop outs (Janardhan Reddy 1991) fromthe system and also the job satisfactionfor the trainers is also not uniformly high.(Subba Reddy 1991). Many factors areresponsible for the varying levels of jobsatisfaction.

From the survey of the studies inthe field of open learning system we maynotice that the socio-economic factors arequite significant in determining the degreeof effectiveness of these methods ofeducation.

II. F. ADULT EDUCATIONPROGRAMME AS AN EQUITYMEASURE:

A study for A.P. (M.C. ReddappaReddy - 1988) showed that out of the 41

predictor variables used in explaining thevariations in literacy rates 29 variableswere found to be quite significant inexplaining the variations in the literacylevels. The multiple regression modelsused here, were also found to bedependable in estimating the quantitativesignificance of different variables. Someof the socio-economic and demographicvariables therein were also considered tobe quite important. An earlier study byMaya Shah (Baroda University) alsohighlights the importance of the socio-economic conditions of the region and thelearners in explaining the literacy levels.Such studies would obviously provideinsights about how the adult educationprogramme can be made more effectiveby operating on the various socio-economic determinants of the literacylevels.

A micro perspective about theimportance of the socio- economicvariables would be further useful in makingthe adult education programme successful.A study for Kerala (V.Pushpakumar-1992) based upon a sample of 600women consisting of 300 urban and 300rural women learners from 20 out of 60centres of adult education, surprisinglyshows that income generating activitiesprovided at the Centre as such do not playa decisive role in motivating the womenlearners of the adult education centres inKerala. It is true that the psychologicaland sociological factors have a role in


motivating women learners in adulteducation. However, such conclusionshave to be taken with care, because,motivation may depend upon the type ofincome generating activities, the amountof income from these activities, locationof these activities, distance of theactivities from residence etc. Theconclusion seems to be somewhat similarto that of the studies on the rate of returnfrom different levels of formal education.Despite higher rate of return fromprimary education (calculated on thebasis of the life time earnings of thecompleters of education) primaryeducation has not become a veryattractive proposition !

How far has adult education itselfcontributed to improvement in the socio-economic conditions of the individual andof the society. Some studies in this fieldhave brought out mixed results. Findingsfrom a study for Azamgarh district (U.P.)(S.N.Pathak-1991) showed that inspiteof the implementation of the adulteducation programmes in the district thepeople could not find the programme tobe socio-economially very advantageous.Another study for U.P. itself (for ruralareas of Allahabad district) (B.Sharma-1990) showed that adult educationbenefited the adult learners in theirmarketing activity, aroused them againstthe social problems like dowry systemetc. A study on social uplift of womensin rural areas of Madhya Pradesh

(Gopirao 1992) showed that adulteducation did bring about a significantimprovement in the social, economic,heyigenic aspects in the life of adultwomen learners.

The studies on adult educationprogramme seem to emphasize a commonpoint namely that the programme has notbeen seriously implemented A study ofthe cost effectiveness of national adulteducation programme during the 7th fiveyear plan (NPS Chandel- 1992) showedthat the cost of SAEP and RFLP wasRs.168.36 and Rs.166.87 respectively.The wastage rates in these programmeswas around 8.4 and 9.7 percentrespectively. Cost effectiveness was foundto be higher for the male learners ascompared to the female learners.Similarly, for the rural areas also thefunctional literacy programme was notfound to be highly cost effective. A studyfor Assam (Manoranjan Das- 1990)showed that besides poverty there aremany social and other obstacles like socialcustoms, religious finaticism, naturalcalamnities etc., in the expansion of adulteducation. The study emphasized a needbased adult education programme for thesocially and economically deprivedsections of the society.

On the whole, it appears that theresearch literature on economics of non-formal education has not developedsignificantly in the literature on Economicsof Education. A Few studies on distance


education showed that there are manyresearch opportunities for social scientistsin this area with a number of distanceeducation exercises being implemented indifferent parts of the country. Studies oncosting, financing, returns and planning ofdistance education programmes need tobe undertaken. It is also necessary to lookinto what may be the cross linkagesbetween distance education and theregular formal system of education. Suchstudies would help proper coordinationand integration of the two channels ofeducation.

II G. INTER SECTORALLINKAGES :

A saying-healthy mind in a healthybody summarizes the importance of theinter-sectoral linkages, which are relevantfor education. Economic-factors play arole of intervening variables betweeneducation on the one hand sectoralvariables on the other. If less resourcesare allocated to the development of theother sectors then achievements on theeducational front would also be less. It isin this sense that the inter sectoral linkagesneed to be considered in any studypertaining to planning of educationaldevelopment.

That health and education aresymbiotically related has been effectivelybrought out in some of the studiesundertaken recently. Some of the healthpractices would therefore be related with

education in a significant way. Aninteresting conclusion has been reachedin a study (Sister Amanda 1991) thatthe children who were breast fed for morethan four months were found possessingbetter mental abilities than those who wereeither artificially fed or breast fed for lessthan four months. It is of course,necessary to have longitudinal studies inorder to follow up the performance ofdifferent categories of children in theireducational career in the future in orderto evaluate objectively any particular typeof health practice. Another study basedupon the data from a random sample of30 schools from among the 100 projectschools identified in seven selected states(Bihar, Karnataka, Maharashtra,Misoram, Orissa, Rajasthan and U.P),found that the scholastic achievementswere different for the children whobenefitted from the nutritional project inthese states. In a background of severenutritional deficiencies obtaining amongchildren in India this conclusion should bevery meaningful, for both educationalpolicy making and the policy making inthe health sector. Unfortunately eventhough the funds were quite adequatelysupplied for nutrition programmes theutilization rates were not very satisfactory(S. Bhattacharrya 1991). It should beadded however that the evaluation studiesof mid day meals programmes for schoolchildren are not unanimous in theirconclusion with regard to the nature ofassociation between the nutritional input


and the scholastic achievement. In thebackground of the fact that more than50 percent of children are undernourished(M.Verghese 1991) the school nutritionprogramme should be useful in itself. It isalso noticed that enrollment andattendance (at least at the time whenbread and milk under the nutrition schemeare distributed to children) improves.

While health inputs contribute toeducation, the educational programmesalso do contribute to the achievement ofhealth goals. Different aspects ofmobilizing education to reinforce primaryhealth care through school children hasbeen highlighted in another study (R.S.Potdar 1989). In this sense, school canbe considered as a change agent tofacilitate reaching goals of health for allby 2000 A.D.

These insights about the nature ofthe linkages between socio-economicfactors on the one hand and education onthe other and also other inter sectorallinkages reinforce the belief that educationis only a subset in the overall socialcontext. There is a need to have morerigorous studies highlighting such asymbiotic relationship between variousother forces and education in the contextof different levels of socio-economicdevelopment of the region and of thepeople. It appears that symbioaticrelationship is stronger in the early stagesof development and lower levels of

regional development. The degree ofcomplementarity between the two is likelyto be low, at higher stages of socio-economic development. Such stage-theoretic perspective about the nature ofthe linkages would be extremely helpfulin both understanding the educationalprocess and also the relevance of variouspolicy instruments. Such unexploredareas offer many useful researchopportunities in the future for both thesocial scientists and educationists.

III. ISSUES IN EDUCATIONALPLANNING:

In the above backgroud ofusefulness of education for the economyand the society and the significance of thesocio- economic forces for educationaldevelopment, meaningful interventions canbe visualised for the purpose of achievingthe stipulated objectives. Care has to betaken to ensure that there is noinconsistency or conflict in theinterventions in different sectors, differentregions and in relation to differentpopulation groups. We may suggest insuch a context an approach of developinga ‘policy metrix’ reinforcing the co-ordination and integration of differentsectoral policies.

If only the problems of planningof education have to be focused upon thenthe conventional approaches of using rateof return techniques, manpower planningtechniques or social demands estimation


techniques may have to be considered.We have already reviewed some of thestudies estimating the rates of return.Unfortunately exhaustive studies ofestimating social demands foreducation (estimating the requirementsof educational facilities based upon thedemographic development) have notbeen attempted by research scholars.While formulating the 8th five year planfor education a number of workinggroups appointed by the Governmentof India looked into such questions.One of the sub-groups examined thequestions relating to estimating thefinancial requirements of educationalfacilities in the background of increasein population in different age groupsand the transition probabilities andpresented the estimated of resourceneeds.(P.R.Panchamukhi, Chairmanestimations of the committee 1989).A number of sectoral studies broughtout by the Institute of AppliedManpower Research can beconsidered to be useful inputs so far asmanpower requirements estimation asa basis for educational planning isconcerned. In another study theimportance of Rural Manpowerassessment was emphasised for thepurpose of planning of education.(R.Srivastav 1990) A critical observerof the literature in this field howeverfeels that there is much scope forundertaking rigorous technical studies

for different sectors of the economyestimating the manpower requirements ofthese sectors and integrating these estimatesin the future educational planning.

One gets an impression that whilethere are a number of attempts to generateuseful data of manpower requirements indifferent sectors they are hardly integratedwith the planning exercise of educationaldevelopment in the country. Obviously thestudies will have to be developed with abottom up methodology, with sub sectoraland regional exercise conducted initiallywhich will then be coordinated to present amacro picture of the educational plan for thecountry as a whole. Obviously this exercieof estimation of the manpower requirementsfor different sectors and regions would beextremely complex, particularly, in thebackground of fast technological changesthat are being witnessed in different sectorsand different regions. With the rapid entryof foreign investments and foreign technologyinto the country the problems become all themore acute and complex, Suchdevelopments would also throw greatchallenges before the reseachers indeveloping comprehensive educational plansbased upon technically developed estimatesof manpower requirements.

INSTITUTIONAL PLANNING :

In the above background ofdifficulties about macro level planning oneneeds to emphasize the importance of


planning at the institutional level. Suchmicro excersises would be quitemeaningful from the point of view ofefficient and economical use of the scarcefinancial, physical and manpowerresources in the educational sector. Thisis the subject of internal efficiency ofresource allocation. While wastage andstagnation indicate one aspect of internalefficiency of the educational system theinstitutional planning would refer toanother aspect.

The main questions here are of thefollowing type: How are the mainquestions here are of the following type:How are the available resources in theeducational institutions actually utilised? Isthere a problem about the building spacein the educational institutions? Is thelibrary properly located? What is theexpenditure on reference collections incomparison with the expenditure on thetext books ? What percentage of theresources should be allocated to theacademic activities and what percentagefor administration? Such question wouldtouch upon the ground realities of actualfunctioning of the units in the educationalsector.

A number of studies have beenattempted to examine some of the abovequestions. Studies relating to the planningof the library facilities . ( M.M. Raju 1990, C.L. Kaul and J.K. Gupta 1990) showthat the library facilities are not quite

adequate in educational institutions atdifferent levels. Neither the libraryaccommodation is adequate nor thepublications holdings is satisfactory. It hasalso been noticed that the libraryresources are also not fully utilized.

With regard to the school buildingalso the conditions are far fromsatisfactory. The NCERT surveys havecertainly brought out the facts about theconditions of the facilities within theschool. Four state study covering 19districts (S.C. Mittal and P.Kumar1990) revealed that majority of schoolsrun by the government do possess enoughland but the per capita land covered areais very less 52 percent of the schoolsfunction in thatched and Kuchhaaccommodation . Such a state of affairswould go only to show that there is noproper planning of the building resourcesby the educational institutions

Ideally the exercises of planningat the institutional level have to be thebasis for planning of education at the stateand the national level. As one of thestudies reveales (J.C. Vyas 1992) not allthe educational institutions had preparedtheir educational plans and sent to theDistrict Education Officers, and even atthe level of the District Education officer,these plans were not properly integratedwith the educational plan for the Districtas a whole. The same anomaly is seenwith regard to the financial planning at the


institutional level and planning of theeducational sector as a whole, for the stateor the country. Thus, even thoughagriculture receives priority in theeconomic development of the state andthe country, the same priority is notreflected in the actual decision making forthe relase of the resources to the differentcomponents of agricultural development.For example, the agricultural universitiesin Maharashtra could not get the requiredfinancial resources from the government(P.M. Mohitkar 1991) only 40 to 60 percent of what the agricultural universitiesasked was received by way of grants inthis state. The degree of utilization of thegrants, by the universities however, wasquite high-(around 99 per cent) ! A numerof studies on Universities Finances whichwere attempted during the 80s clearlybring home the same point that thefinancial conditions of higher educationalinstitutions are not sound and they are alsodeteriorating over time. Unfortunately, theresearchers have not paid much attentionto the analysis of the finances at the schoollevel. It would be interesting if the financesof the private and government run primaryschools, are analysed and the financialplanning exercise at the institutional levelis extended to the school sector ofeducation. While there is so much of noisecreated about more allocation of funds toprimary education, it is always useful andnecessary to examine what is the financialstrength of primary schools in order thatthey function efficiently.

Thus, very few studies on physicaland financial planning of education, at themacro and micro levels show that thereare many questions of planning which haveremained un addressed by the researchersin economics of education. Despite therecent trends of state withdrawall fromvarious economic sectors of the country,the state initiative in planning of educationfor the purpose of allocative efficiency anddistributive equity cannot be overlooked,The research base for such initiativesneeds to be strengthened in the future.

IV.PROBLEMS OF EDUCATIONALFINANCE:

Educational finance has been oneof the areas in which economists havetaken keen interest for a long time. Oneof the earlier studies on history ofeducational finances (by AtmanandaMisra) provided pioneering initiatives inthe field. Studies on history of education(for example by Narulla and Naik)referred to the problems of educationalfinances as one of the crucial componentsof historical analysis of education. Thesubsequent studies with a focus onfinancing of education at different levels ,funding of education, pricing of educationetc. raised some of the crucial issues inthis connection.

The question of educationalfinances has to be considered in a broaderframework of the availability of theresources physical, financial and


manpower, for education. The resourceflow for education can be shown in thefollowing chart.

The main issues in connection withresources and finances for educationwould be the following.

1) Are the resource flows into educationadequate so that growth anddevelopment of education is ensuredwithout any hindrance ?

2) Is there “automatic stability” in theflow of resources within the given timeperiod ? e.g. within a year do the

resource flow automatically wheneverthere is a greater need for them ?

3) Are the flows of resources having anystrings, or any conditionalities ?

4) What is the role of public and theprivate resources for education ? Arethere complementarities or

RESOURCE FLOW

Domestic Foreign

Private Public Government Private International

agencies.

Physical, Physical Physical Physical

Manpower Financial Financial Financial Physical

Financial Manpower Manpower Financial

Manpower

The flow of resources can also be seen from a different angle.

FLOW OF RESOURCES

Resource flow with Quid Pro Quo Resource flow without Quid prp quo

Different types of fees & charges Grant in aid .

Pricing of education.. Private munificience,

Donations,

Charities.


substitutional effects in these flows ?Is it possible to determine anoptimum combination of public andprivate flows of resources for differentlevels of education ?

5) Are the resource flows to differentlevels and types of education inaccordance with the overall plans ofsectoral developments withineducation ? In other wards, does firstlevel education, which is a prioritysector within education, receiveadequate resources ? If the resourcesflow is not adequate then what arethe socio-economic and politicalfactors for the same and how toovercome these forces ?

6) Is the resource flow consistent withthe goals of inter regional, intercommunity, inter gender, and intercaste group equity and equality ?Obviously, if the resources are notflowing in accordance with theseobjectives then even best plans wouldnot succeed.

The studies received for the trendreport consider some of the abovequestions.

The flow of resouces to educationwould obviously depend upon underwhich management the educationalinstitution functions. The private costsconsisting of expenditures on booksstationary, clothing transportation etc., are

also reported to be different for institutionsunder different managements (Gupta S.C.1990). For teacher training institutions theprivate costs for hosteliers weresubstantialy more than for the regularstudents. Studies of private expenditureson primary education in different districtsof developed, medium developed and lessdeveloped states would be quitemeaningful for policy making. However,many such comprehensive studies are notavailable. (Rajaiah B. 1989). Under thesponsorship of the Planning Commission,a multi-state study of private expenditureson education was conducted, whichshowed that private expenditures, by theparents and the students and also theprivate managements are too large to beoverlooked, though they have not receivedthe attention they deserve by the policymakers. (P.R.Panchamukhi 1990)

As against such micro studies forspecific districts and the states Tilak brieflypresents South Asian perspectives aboutalternative policies for the finance, controland delivery of basic education. (Tilak1994). The study primarily focuses onsome of the states in India. He rightlypoints out that even in the schoolsmanaged by the private sectorgovernment funding is substantial. In UttarPradesh for example, 92 per cent of totalgovernment expenditure on primaryeducation was made on private aidedprimary schools in the form of grants. In1970 this percentage was as high as 99.4


in comparison with what was obtaining in1950 with nearly 60 percent ofgovernment expenditure then being madeon private aided schools. The latestposition for 1980-81 shows that there hasbeen a substantial increase in governmentassistance to the private managededucational development. The questionwhether public and private expendituresare mutually substitutive or complementaryis a crucial issue. However, no conclusivestudies are available on this issue in theIndian context.

How does the local governmentmobilise funds for financing education ?Historically educational cess has beenconsidered as a useful source of raisingfunds for education by the municipalbodies. The picture does not seem to bevery encouraging now. For example,education cess in Baroda city contributedto the extent of 16 per cent of totalrevenue. Even though the educationalcess makes such a significant contributionit was found that very little is spent on thedevelopment of the pupils particularly thefuller development of the personality of thechild. This shows that the resourcemobilisation by the local bodies foreducation is not in consonance with theobjective of educational development(Bhat M.A. 1989).

While private costs indicate thecosts to be incurred by the beneficiarythe institutional costs indicate the costs to

be incurred by the suppliers of education.Institutional costs of university education(S.K. Behara 1991) have been risingcontinuously over the past few years. Thecase study for Utkal University bringshome this point. It also shows that theexamination costs are outstripping theother costs of higher education. Thoughthese observations are made in the caseof a University in a less developed state,the picture is not quite different in the caseof other states. In the same way, what isobserved in the case of the educationallymost developed state of Kerala is releventfor the other states as well (Mathew E.T.1988). The object wise analysis ofeducational expenditure for selectedcolleges in the state of Kerala over theperiod of time shows that ‘salaries’ is themost important head. In view of thispredominance of salary very littleflexibility is available for the colleges tointroduce any innovative measures inhigher education.

In the above background, itwould be clear that the picture about thefinancial position of the institutions ofhigher education is extremelydisappointing with the government almostgiving up its initiative in view of its ownfinancial crisis. It is in this backgroundthat the measure for rational restructuringof tuition and other fees with adequatesafeguards to protect the interests of thestudents from the weaker sections,appears to be the only way out. Similar


is the conclusion for Maharashtra as well(Roop M.R. and L.R. Thatte 1991). Withthe help of unit cost calculations for highereducation for different parts ofMaharashtra, it was found that almost athree time hike in the tuition fees is theonly way out for tackling the problem ofresource crunch faced by the institutionsof higher education. Even though, thisorder of fee hike may be politicallyproblematic, the gravity of the financialcrisis of higher education cannot be understated. The financial problems are notpeculiar only to the un aided institutionsof education. There is no significantdifference in the number of financialproblems faced by the aided and un aidedinstitutions. The paucity of funds for unaided institutions may even lead tomalpractices and unhealthy andundemocratic relationship among teachersand students, as a study in the context ofBombay has shown (S.U.D’Leema1988).

In the background of such apicture about financial resources the studiesalso suggest that there is a need to haveinnovative approaches with regard toidentification of areas of cost saving andalso newer sources of funds for education.Use of the low cost material like plasticbags, plastic disposable syringes andassorted materials such as news papers,plastic and glass jars and bottles andstoppers etc., to teach plant physiologyand micro biology in the rural schools is

one way of making best use of theavailable local resources for education(Bhattacharya S. 1991).

The utilization of the facilities withinthe educational institutions is also far frombeing optimum. A statewise study of theutilisation of the laboratory facilities inselected states (K.N.Rao, M.K. Gupta1990) shows that the costly laboratoriesare used for a very short period of one tothree hours per week by the majority ofurban schools in Maharashtra ! .In therural areas the position is still worse. In aless developed stste of Rajasthan wherelarger percentage of the rural schoolshad the laboratory facilities ascompared to the urban schools, theutilisation of the available facilities is notvery satisfactory either. While thus on theone hand there is a problem of inadequacyof physical facilities, on the other hand,there is a problem of less efficient utilisationof the available facilities. A study forTamil Nadu (Packkiamm 1990) showedthat even for an educationally developedstate of Tamil Nadu as many as 83 percent of primary schools did not haveadequate facilities. The operationblackboard in such a context would bequite a meaningful reform measure. Theimplementation of the operationblackboard showed that theimplementation is very satisfactory in thecase of private primary schools ascompared to government primary schools.This is a highly anomolous position. Not


all the components of the operationblackboard have been religiouslyimplemented in the context of differentstates. A departmental study (B.K. Guptaand D. Gupta 1992) showed thatuniversalisation of elementary educationwould be better facilitated if addedattention is given to drinking water, toiletfacilities, provision of women teachers inprimary schools, replacement of theconsumables at quick intervals, authorityand freedom for the teachers and otherfunctionaries, shift from teacher centredmode of teaching to child centred modeof teaching etc,. The study also showedthat both the education officers and theteachers were confident that the operationblackboard facilities would certainly resultin increased enrolment, improvedretention and achievement levels ofstudents. Thus, for UEE adequate supplyof physical resources was considered asequally important like the supply offinancial resources. However, thequestion of internal efficiency in the useof resources is equally important like thesupply of financial resources.

The problems of wastage andstagnation add to the inefficiencies arisingout of wrong management of physical andfinancial resources.

The problems of financing ofeducation assume a different significancein a federal framework. The apex bodiesresponsible for resource flows in this

framework have not been able to payspecial attention to the problems of thesocial sector in general and of educationin particular. (P.R.Panchamukhi 1989Economics of Educational FinancesHimalaya Publication)

The other issues which deserveattention in this connection are thecommunity resources for educationparticularly for primary education, theextent of under utilization of resources,size cost relationships at different levelsof education, etc. Foreign funding ofeducation may also be one of the crucialthemes in the years to come in view of therecent developments of economic reformsand opening up. A study for Sambalpurdistrict of Orissa, for example, (PadhanA. 1990) showed that an average 31 percent of resources were wasted due todropout and stagnation of children. Thishighlights the importance of controllingwastage and stagnation in education fromthe point of view of reducing the costs ofeducation.

V.CONCLUDING OBSERVATIONS:

Economics of Education hasemerged as an important sub- disciplinein social sciences (-of education oreconomics ?). While few economists havepaid attention to the economic aspects ofeducation, several non-economistresearchers have tried to highlight theimportance of economic variables in theireducational studies. It is necessary that


larger number of technical economists inparticular and social scientists, in general,have to take interest in the problems ofeducational development in order tostrengthen the foundations of the newdiscipline.

The researchers in economics ofeducation face a number of problems intheir research pursuits: (a) In view of lessvigorous research efforts in this field youngresearchers do not get opportunities forpeer group interactions or guidance fromthe senior researchers. This is observedin the case of a number of universities. Asa result, economics of education hascontinued to remain low in the priorityfor researchers (b) The data base forresearches in economics of education isvery weak. The recent official data onsay, sectoral use of educated manpower,region-wise distribution of educatedpersonnel, (e.g. data on medical doctor,in districts and states), latest expendituredata, level-wise, object wise and regionwise, source-wise data about funds, etcare not available at all. While this is theunsatisfactory position about the macrolevel data, the vast data collected bydifferent researchers at the microlevel, arenot at all compiled systematically in one

place. The national and/or regional dataarchives for education, may be suggestedas an urgent initiative to help researchesin economics of education in particular.(c) There does not seem to be a forumfor economists of education who canshare their research experiences. In fact,the economists of education of theuniversities especially in social sciencedepartments, research institutions,colleges of education, specializedinstitutions like NIEPA, NCER & T,IAMR, etc. need to have a closerinteraction, which at present, is missing.In the interest of development of thediscipline of economics of education andalso in the interest of making the researchoutput as an input in policy making, suchinteractions are extremely necessary. Thepresent trend report based mainly on theresearch abstracts got done, reflects theabsence of such a coordination of theresearch efforts in economics of educationin the country.

In sum, we may conclude thateconomics of education may be a goodarea for researches in future, if freshinitiatives and technical expertise areencouraged in both the fields of educationand economics.


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RESEARCH ECONOMICS OF EDUCATION: A THEMATIC TREND … · Research in Economics of Education: a Thematic Overview 3 aspects of education if they have some reference to the socio- economic