Role Of Education In Economic Development Ppt – 1- The role of fiscal policy in economic growth Fiscal policy has traditionally been attributed three roles: the redistribution of resources in the economy with the provision of public goods in the hope of correcting market failures. Redistribution of income and wealth through the tax and benefit system, as well as public education and other services. Stabilization of the macroeconomics in the short and long term. Countercyclical fiscal policy, if implemented appropriately, can help offset short-term fluctuations in the business cycle. Fiscal policy can contribute to stable, long-term output growth with low inflation by maintaining sound fiscal conditions and limiting the growth of public debt.
2- BUDGET BALANCE Fiscal consolidation in the early 1980s restored the budget balance on a sustainable path. The recent economic crisis had a serious but short-term impact on the balance sheet. Budget surplus/deficit Korea OECD Note: consolidated central government Note: general government. Source: Ministry of Finance and Economy Source: OECD.
Role Of Education In Economic Development Ppt
4 -3- Expenditure growth Fiscal consolidation in the 1980s took the form of expenditure restrictions rather than income growth. Real expenditure and income growth Note: Real values were obtained by reducing nominal values using the GDP deflator. Source: Ministry of Finance and Economy.
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6- Government liabilities The debt-to-GDP ratio has been steadily falling since the early 1980s, but rose sharply after the crisis. After accounting for government guarantees, this share was at the level of 33% at the end of 2003. Government Commitments Korea OECD Note: Central Govt. Source: Ministry of Finance and Economy Note: Public administration, end of 2003. Source: OECD.
7. Government Liabilities In the early days of government-led economic development, foreign loans played an important role in providing funds for public and private investment. Debt-to-GDP ratio Source: Korea Development Institute; , Ministry of Planning and Budget.
7 -8 – The size of spending and net borrowing as a % of GDP decreased in the 1980s and then increased in the 1990s. It peaked in 1998 as a result of expansionary fiscal policy during the crisis. Expenditure and net debt and income Source: Ministry of Finance and Economy.
8 -9- The amount of expenditure is equal to 23.0% of total government expenditure of GDP, which is much less compared to other countries. However, this difference is mainly due to less social benefits in Korea. Public administration expenditures Source: OECD
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10- Tax burden and social security burden The tax burden and social security burden have increased with the increase in spending. Tax Burden and Social Security Burden Korea OECD
11- Sectoral allocation of expenditure Economic affairs have the largest share of total expenditure. Social security spending is rising after the recent crisis. Development of expenditure and net borrowing (% of total expenditure and net borrowing) 1970 1980 1990 2000 2003 General public service Defense Public order and security Education Health Social security Housing and civic facilities Recreation, culture and religion Economy Other expenditure 23.1 22.7 – 16 , 7 1,3 4.9 0.3 1.4 27.4 2.2 4.0 30.6 4.6 14.6 1.0 1.0 5.7 2.5 0.7 26.0 10.4 4.2 20.0 4.3 17.0 1.7 8.1 10.1 0.5 20.4 13.4 13.4 13.4 5.2 5.3 0.7 0.3 0.8 25.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 6.2 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5 ,3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 0.3 0.3 5, 3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 0.3 5.3 5.3 0.3 0.3 0.3 0.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5, 3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5 .3 5.3 5.3 5.3
12- Spending on the economy Spending on the economy reaches up to 6% of GDP, which is much more than in developed countries. Economic Affairs Expenditure Note: Central Government for Korea and General Government for others. Source: IMF. 1 2 3 4 5 6 7 USA Germany France UK Canada Korea (% of GDP) Other economic matters Transport and communications Mining, manufacturing and construction Agriculture and fisheries Fuel and energy
13 Government Borrowing Expenditure on economic affairs often takes the form of borrowing. State of outstanding loans borrowed by the government Note: Net loans = new loans – repayment. Source: Ministry of Finance and Economy.
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14- During the resolution of the crisis in 1997, the government provided loans to the Korea Deposit Insurance Corporation (KDIC) and the Korea Asset Management Corporation (KAMCO) in the amount of interest payments on the restructuring bonds issued by these companies. The government also provided guarantees for these bonds. In 2002, the government announced plans to take over some of the bonds (49 trillion won) and convert them into government bonds. The rest will be paid by KDIC and Kamco. In 2003, 13 trillion won was spent on the transformation. This number is 12 trillion won every year. In addition, the government greatly expanded social programs to help the poor and unemployed.
14 -15- Evaluation Overall, fiscal policy in Korea has successfully played its role in: Resource allocation: Emphasis has been placed on promoting economic growth with heavy spending on education, infrastructure and other public goods. Income distribution: Social security spending has grown rapidly since the crisis and is expected to grow further in the coming years. Stabilization: Prudent fiscal policy management has contributed to a strong fiscal position and a low debt-to-GDP ratio. However, short-term stabilization is limited by the small size of tax revenues and social security expenditures.
15 -16- Evaluation The Korean economy recorded an average growth rate of approximately 8%. Inflation fell sharply in the early 1980s and continued to decline after the 1997 crisis. Production growth and inflation Source: Bank of Korea.
16 -17- Evaluation Korea is also known as a country with a relatively equal distribution of income, although inequality has increased significantly after the crisis. Gini coefficient Source: Hyun (2003) and Yu (2004).
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18- Challenges Since the mid-1990s, there has been an upward trend in government spending and the share of “compulsory spending” has been growing, requiring a conscious effort to limit spending growth. Expenditure growth Source: Ministry of Finance and Economy.
18 -19- CHALLENGES The extensive government lending activity seems to play a substitute rather than a complementary role for commercial banks. Direct support to private entities, including government debt, should be reduced to increase complementarity. Loans of financial assets from commercial banks / GDP
20- Challenges On the other hand, the government should increase its efforts in providing basic public services such as public safety, judicial services, support of competitive business practices, statistical services, etc. employment in the public sector
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In order for this website to function, we record user data and share it with processors. In order to use this website, you must agree to our Privacy Policy, including our Cookie Policy. Educational Implications in the Capacity Approach for the Evaluation of Educational Projects as Human Capital Educational Indicators Implicit in the Capacity Approach in Educational Indicators Educational Policy Francesco Burchi Master HDFS
The Role Of Education In Economic Development
The Harrod-Domar Model (1948): The Solow Model (1957): An extension of the Harrod-Domar model with labor inputs and technology. General Features: Growth depends on the accumulation of physical capital Disadvantages: What are residual factors? francesco barchi master hdfs
Every company embodies, in addition to material economic resources, also an intangible resource, human capital, which manifests itself mainly in work. The first proponents of this concept were: Theodore W. Schultz (1960) and Gary S. Baker (1961). Schulz: Growth rate > physical capital accumulation rate. Reason: Accumulation of human capital. Later, human capital was also included in the development model: for example, Lucas and Romer. francesco barchi master hdfs
5 What is human capital? Human capital is a capital commodity that depends on investing in the elements of a human being: – health, which includes nutrition – on-the-job training that ensures the use of specific skills in the company where the individual works – adult study programs, such as extension services in agriculture to acquire practical competences needed in the field of work. – Formal education, years of schooling. francesco barchi master hdfs
Micro unit of analysis: worker Macro unit of analysis: economic system Micro goal: increase individual productivity Macro goal: economic growth = economic growth = poverty reduction human capital = factor of production to be added to the production function: Y = f (C ) But; h …), where h = human capital francesco barchi master hdfs
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7 Empirical analysis (1) Although the concept of human capital includes many dimensions, most empirical studies based on this theory focus on a single dimension: education. Education is usually measured by the “years of schooling” variable. francesco barchi master hdfs
8 Empirical analysis (2) Psacharopoulos (1971) applies the HC theory with the following hypotheses: 1. HC is measured only by education 2. Educational capital is measured only in labor force. francesco barchi master hdfs
9 Empirical analysis (3) Psacharopoulos estimates two different growth models. Schultz’s model: capital = physical capital + human capital. The investment in HC is further divided into 3 levels of education: elementary, secondary, university. Denison’s model: Human capital is not another factor of production, but part of the work. The workforce is more or less qualified according to the level of education. francesco barchi master hdfs
Based on data for this period from many parts of the world, Tsacharopoulos (1971, 116-9) obtained the following results: The contribution of education to development is relevant everywhere, but much greater in developing countries. The two models yield different results: Schultz’s model underlines the significant benefits of education for the few
