Developments and challenges in economics and finance of education: Evidence from LMICs and high-income countries

Group Submission Type: Formal Panel Session

Proposal

The field of economics and finance of education has grown tremendously since the introduction of the human capital theory (Schultz, 1961). Currently, there are many important questions being discussed, investigated and debated in the field. Examples include: Does education affect economic outcomes, and if so, how? Does education finance interact with public policy? And how does education finance policy contribute to the development of a new strategic planning for the next generation, if at all?

The field has come a long way, and it is still developing and changing to align with the rapid changes that characterize the contemporary era of globalization and knowledge-based economy. We have learned a lot in the last few decades, and we still are looking for answers on many pressing issues in the field. Education has both private and social benefits and is an important determinant of individual’s income, health and capacity to interact and communicate with others. However, one of the major challenges that we are facing is the persistence of these inequalities, mostly arising due to educational inequalities, particularly in developing countries.

The other challenge of the field relates to estimation methods. For example, while one measures for the returns to education, there are many variables that one cannot observe. Similarly, in the estimation of costs or benefits of education, due to the nature of the field, there are many aspects one cannot measure. Measurement of real cost or opportunity costs of education and externalities associated with education are though contributing to a greater extent to total costs and benefits, yet they are kept outside measurement in most instances. Although we have come up with many clever strategies to tackle these measurement issues, the challenge is ongoing. Likewise, the lack of good data and lack of robust monitoring and evaluation systems has posed a good degree of challenge, particularly in developing countries. With many international organizations like UNESCO Institute of Statistics working towards developing accountability mechanisms for the sustainable development goals in the global scale, we are hoping to get better in data collection and accountability areas.

Changes in the world pose new challenges to the field of education finance as well. Recent influencing trends in the field include globalization, internationalization, massive immigration waves, the interest of many countries in knowledge-based economy, and insights gained in the field regarding the casual positive impact of resources allocation on EAD. As a result, international agencies such as the World Bank and the UN have become more dominant in the pursuit of global education finance policy. The LMICs are most affected with such changes as these countries have not developed the base on which these policies would be beneficial. They struggle with major issues such as lack of quality schools and higher education institutions, student dropouts, learning outcomes and teacher absenteeism at the school level, poor infrastructure, issues of curriculum, and outdated technologies, among many other issues and concerns yet to be addressed. Likewise, even in high income countries, the increasing need to sustain competitiveness and, at the same time, maintain social cohesiveness challenges the method by which the nation-state finances its educational system.

In this panel, we make an attempt to visit some selected topics that have growing interest among researchers around the world. This panel reviews recent conceptual and methodological developments in the field of economics and finance of education, particularly in the context of low-and middle-income countries. There are cases and examples from high-income countries as well. The panel hopes to bring to light the issues, challenges, opportunities and future directions of the field.

This panel is comprised of five presenters from different countries and States, including Nepal, India, and Israel. The first paper examines the role of education in economic development in the case of Nepal. The second paper discusses reforms in higher education financing in India, particularly focusing on the concerns of affordability. The fourth and fifth paper highlight discussion relating to the education finance and equity in the case of Israel’s education. Finally, the fifth paper brings the dimensions of poverty into discussion taking the case of Côte d'Ivoire.

All the presenters are experts in the field of economics and finance of education in and are either serving as faculties in higher educational institutions in their respective countries or are doctoral candidates in school of education. Prof. Esther E. Gottlieb, Professor of Comparative and International Education at the Ohio State University will chair the panel. Dr. Radhika Iyengar, who is also an expert in the field and has rich knowledge and direct field experiences on the topic from Africa and South Asian countries will be the discussant of the panel. Given the topics, the panel contributes to creating meaningful, relevant and healthy platforms for discussion of ideas and insights in the field of comparative and international education.

Sub Unit

• Economics and Finance of Education SIG

Organizer

• Amrit Thapa, University of Pennsylvania

Chair

• Esther E. Gottlieb, The Ohio State University

Individual Presentations

• Examining the role of education in economic development in Nepal. - Amrit Thapa, University of Pennsylvania

• Reforms in Higher Education Financing in India: Unravelling the Concerns of Affordability - Jinusha Panigrahi, Manav Rachna International Institute of Research and Studies, Delhi-NCR, India

• Household Poverty in Rural Côte d'Ivoire - Anahita Kumar, GSE, University of Pennsylvania; Sharon Wolf, University of Pennsylvania

• Local Authorities Private Funding in Public Schools: What Values Drive the Decision-Making Process? - Ruth Meoded, Bar Ilan University; Iris BenDavid-Hadar, Bar Ilan University

• Bridging the Divided: School Finance Policy Reform in Israel - Iris BenDavid-Hadar, Bar Ilan University

Discussant

• Radhika Iyengar, Columbia University, climate School