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Education Inequality and Economic Growth: Framework for the Evaluation of Pakistan’s Education Policy

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  • Hassan, Rubina
  • Mirza, M. Shahzad

Abstract

This paper attempts to substantiate the Education-Growth relationship with a view to evaluate Pakistan’s Education Policy over the last two decades. With a view to the inadequacy of the generally used measures of education, we first estimate the no enrollment ratios, the average schooling years, the standard deviation of education and educational gini for Pakistan and its four provinces across gender domains as measures of the level and spread of schooling for 1973-1998. Then using these measures we estimate some standard econometric relations to understand the evolution of the distribution of education, its impact on economic growth and the role of government policy therein. The paper confirms the existence of a negative relationship between average schooling years and inequality in educational opportunities, along with a strong support for the existence of the Education Kuznets Curve both as a time series and as a cross sectional phenomenon for Pakistan and its four provinces across gender domains. The paper also corroborates the education-growth hypothesis through panel estimation of a modified Macro-Mincerian function. We find that the commitment of the public sector to education provision has a very strong impact both on educational inequality and on the rate of economic growth. Our estimates establish the failure of Pakistan’s education policy on account of the inefficiency of current education expenditure and shows that if the declining commitment to education does not reverse and the public sector does not take care of its inefficiency, then Pakistan will suffer in terms of reduced economic growth and high educational inequality for future generations. The paper recommends that Pakistan’s education reforms should focus on primary education provision for all rather than on higher education for a limited segment of the population

Suggested Citation

  • Hassan, Rubina & Mirza, M. Shahzad, 2005. "Education Inequality and Economic Growth: Framework for the Evaluation of Pakistan’s Education Policy," MPRA Paper 26351, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:26351
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    File URL: https://mpra.ub.uni-muenchen.de/26351/1/MPRA_paper_26351.pdf
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    References listed on IDEAS

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    1. Mikael Lindahl & Alan B. Krueger, 2001. "Education for Growth: Why and for Whom?," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1101-1136, December.
    2. Barro, Robert J. & Lee, Jong-Wha, 1993. "International comparisons of educational attainment," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 363-394, December.
    3. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 407-443.
    4. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    5. Eric A. Hanushek & Dongwook Kim, 1995. "Schooling, Labor Force Quality, and Economic Growth," NBER Working Papers 5399, National Bureau of Economic Research, Inc.
    6. Ram, Rati, 1990. "Educational Expansion and Schooling Inequality: International Evidence and Some Implications," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 266-274, May.
    7. Roland Bénabou, 1996. "Inequality and Growth," NBER Chapters,in: NBER Macroeconomics Annual 1996, Volume 11, pages 11-92 National Bureau of Economic Research, Inc.
    8. Lam, David & Levison, Deborah, 1991. "Declining inequality in schooling in Brazil and its effects on inequality in earnings," Journal of Development Economics, Elsevier, vol. 37(1-2), pages 199-225, November.
    9. Thomas, Vinod & Wang, Yan & Fan, Xibo, 2001. "Measuring education inequality - Gini coefficients of education," Policy Research Working Paper Series 2525, The World Bank.
    10. Glomm, Gerhard & Ravikumar, B, 1992. "Public versus Private Investment in Human Capital Endogenous Growth and Income Inequality," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 818-834, August.
    11. Behrman, Jere R & Birdsall, Nancy, 1983. "The Quality of Schooling: Quantity Alone is Misleading," American Economic Review, American Economic Association, vol. 73(5), pages 928-946, December.
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    Cited by:

    1. Yu, Nannan & Yu, Bo & de Jong, Martin & Storm, Servaas, 2015. "Does inequality in educational attainment matter for China's economic growth?," International Journal of Educational Development, Elsevier, vol. 41(C), pages 164-173.
    2. repec:cbu:jrnlec:y:2017:v:4:p:59-65 is not listed on IDEAS

    More about this item

    Keywords

    Economic Growth; Education Inequality; Education Policy; Panel Estimation;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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