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Lecture 8

EC207 Lecture 8: Ch 8

Course Code
Shadab Qaiser

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Ch 8
8.1 The Central Roles of Edu and Health Final Exam
- mention Sen’s capability approach!!!
- human capital (H): investment in human being on job training. It does not depreciate or diminish.
Enhance production and investment capital (K). Increase H, increase K. Ultimate internal growth.
Learning by doing. Enhance productivity by endogenous growth model.
- e.g. Hong Kong does not have N but have K and H. Access to technology.
- two ways relationship between edu and health. Both enforce each other. How? Healthy in school,
productivity will be higher. Better life will lead to better life expectancy or fertility (L). Invest in women,
started more income. Family median income increase. Children are normal goods income increase,
you’d like to invest edu and health of children.
- create more employment opportunities: skilled specific that is needed by the econ
- create entrepreneur, pursue profit, perpetual machine of investing. Land-labour-capital, risk taker,
profit is the reward, renovate, new job-old will die, perpetual machine for profit opp and better s.o.l
- e.g. India: immunization in school, basic health service in school for school attendance and
performance. Gov subsidized and the World Bank program. Creating incentives
- positive externalities if somebody educate me: increase my future opp, future prospect of getting a
job. Literacy-writing and reading vs edu-formal.
- edu will create awareness, don’t want people to know social, political, econ right
- positive externalities of individual investment health:
- Education and Health as joint investments for development: productivity will increase. Hygiene
programme thought in school. School is framework where it’s a place to educate
- Improving health and education: why increasing incomes is not sufficient
- better educated mothers, healthier mother e.g. sanitation, basic health
- require policy action
- Tangible and intangible benefit: massive immunization, population control these are costly project
that involved intangible and tangible benefit. Controversial to provide this program
8.2 Investing in education and health: the human capital approach
- high cost involve in public health care program may lead to failure, need constant intervention
- at least primary edu: increase earning profile
- direct cost school fee, uniform, tuition, books and indirect cost children in developing countries
- if not subsidized then they won’t go to school. Policy dilemma.
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