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Môn: Statistics for Business (BAO8OIU)
Trường: Trường Đại học Quốc tế, Đại học Quốc gia Thành phố Hồ Chí Minh
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Môn:
Statistics for Business (BAO8OIU)
Trường:
Trường Đại học Quốc tế, Đại học Quốc gia Thành phố Hồ Chí Minh
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INTRODUCTION TO MICROECONOMICS ASSIGNMENT 2 THE ROLES OF EDUCATION IN ECONOMIC DEVELOPMENT
School of Economics, Finance and
Accounting International University
Vietnam National University Ho Chi Minh City January 2024 NAME STUDENTID CONTRIBUTION 1 2 3 4 5 NGUYỄNNGỌCANH BABAIU23007 X ĐẶNGDUYTHOẠI FAACIU23063 X TRẦNQUỐCHƯNG FAECIU23039 X HOÀNGNGỌCGIAHÂN BABAIU23072 X TRƯƠNGÁNHDƯƠNG BABAIU23059 X TRẦNNGỌCPHƯƠNG FAACIU23005 X NGUYỄNQUỐCBẢO BABAIU23034 X NGUYỄNHỒANHĐÀO BABAIU23047 X Mục lục 1 INTRODUCTION 3
1.1 EDUCATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.1 Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1.1.2
Importance of education . . . . . . . . . . . . . . . . . . . . . . . . . . 4 1.1.3
Effects of Technology on education . . . . . . . . . . . . . . . . . . . . 7 1.1.4
How investing in Education improves the Quality of life? . . . . . . . . 10 1.1.5
Why investing in Education should be a priority? . . . . . . . . . . . . 12
1.2 ECONOMIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 1.2.1
Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 1.2.2
Economic development . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 1.2.3
Three stages of Economic development . . . . . . . . . . . . . . . . . . 15 1.2.4
Roles of researching markets on Economic development . . . . . . . . 17 1.2.5
Determinants of Economic development . . . . . . . . . . . . . . . . . 18
2 EDUCATIONANDECONOMICDEVELOPMENT 21
2.1 THE CONNECTION BETWEEN EDUCATION AND ECONOMIC DE-
VELOPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.2 HUMAN CAPITAL THEORY . . . . . . . . . . . . . . . . . . . . . . . . . . 22 2.2.1
Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 2.2.2
Advantages and Disadvantages . . . . . . . . . . . . . . . . . . . . . . 24 3 POLICIES 24 4 CONCLUSION 26 5 PERSONALOPINION 27 2 1 INTRODUCTION
Educationisakeytodevelopmentineverysociety.Thetwenty-first-century
paradigm is shifting towards the enhancement of knowledge as a priority, as
statesconnecttheirhighereducationalsystemsmuchmorecloselytotheirvari-
ouseconomicdevelopmentstrategies.Anexpansionofeducationalopportunities
andaccessisbelievedtopromoteeconomicgrowth.
Thisreportaimstoillustratethevitalroleofeducationinfosteringeconomic
development and its impact on various aspects, such as labour productivity,
poverty, trade, technology, health, income distribution, and family structure.
Education serves as the cornerstone for progress, laying the foundation upon
whichmuchofoureconomicandsocialwell-beingisconstructed.Itplaysacru-
cialroleinenhancingeconomicefficiencyandpromotingsocialcohesion,serving
asakeyfactorinelevatingindividualsoutofpoverty.Byenhancingthevalue
andeffectivenessoflabour,educationcontributesto povertyalleviation,elevat-
ingoverallproductivityandintellectualadaptabilitywithintheworkforce.Ad-
ditionally,itensuresacountry’scompetitivenessinglobalmarketsbyadapting
toevolvingtechnologiesandproductionmethods.Furthermore,earlyexposure
todiversesocialandethnicgroupsthrougheducationsignificantlycontributes
tonation-buildingandfostersinterpersonaltolerance.
Intoday’sworld,themaingoalofeachcountryistoimprovetheireconomic
well-being.Overall,thegrossdomesticproductisanecessarytooltomeasure
theeconomicdevelopmentofacountry;however,itisnottheonlymeasurethat
givesusthewell-beingofthepopulation.Indeed,thereareothermeasurements
such as income equality, health care, environment, income, and education. In
today’sessay,wearegoing todiscussoneoftheseindexes,whichiseducation.
In fact, we will learn about the reason why workers with a high degree, like
engineeringormedicine,tendtobepaidhigherwagesbecauseofthelowlevel
of labour supply due to the required education. Therefore, how is education
relatedtoacountry’seconomicperformance?Inotherwords,whatistherole
of education in economic growth? In order to answer these questions, we will
firstdefineeducationandeconomics,thentheirrelationship.Next,wewilllearn
aboutthepolicies,andlastly,wewillfinishwithaconclusionandouropinions. 1.1 EDUCATION 1.1.1 Definition
Firstofall,educationistheprocessoflearning,teaching,developingskills,
andgainingknowledge.Itcanbedividedintoformalandinformaltypes.Formal
education can be done in institutions such as schools, colleges, and universi-
ties,whileinformaleducationcanbeacquiredthroughdailyexperiences,online
learning,orself-learning.Inaddition,thereisalsospecializationeducationlike
scienceeducation,languageeducation,andphysicaleducation.Furthermore,ed-
ucationcanbeseparatedintolevelsfromearlychildhoodtotertiaryeducation.
These types have many objectives that individuals can develop during their
lives. For example, people can gain knowledge in various fields of education, 3
such as science, economics, mathematics, literature, etc. They can also learn
skills that are helpful for their personal, social, and professional lives, such as
communication,problem-solvingskills,andcreativity. 1.1.2 Importanceofeducation
Educationisthemostimportanttypeofhumancapitalthatreinforcesproductivityand
increases wages. Furthermore, people with a high education level can be more innovative,
whichisalsoadrivingfactorofeconomicgrowth,suchasthedevelopmentofnewtechnolo-
gies and products, and an educated workforce can be trained to understand and process
newinformation.Forinstance,educationcanhelpaworkerworkwithartificialintelligence.
Fromthepointofviewofmicroeconomics,wecantaketheproductionpossibilitiesfron-
tiertoillustratetheproductivityofacountry.Productionpossibilities(PPF)isagraphthat
shows us the combination of output that the economy of a country can produce with the
available resources and technology. In consequence, technological innovation and advance-
ment can shift the PPF outward, which is a sign of economic growth because more goods
can be produced. To illustrate the shift of the PPF, we take evidence of a country that
producescarsandcomputers.Secondly,capitalisoneofthemostimportantfactors
ofproduction.Whilephysicalcapitallikemachines,tools,andbuildingsisused
toproduceaproduct,humancapitalisalsoacrucialfactor.Thishumancapital
refers to the accumulation of knowledge, skills, and abilities humans develop
througheducation,training,andexperience.Unliketoolsandmaterials,human
capitalremainsanindividualenginehelpingeconomicgrowth.Education allows
individualstoanalyzeinformation,solveproblems,andadapttotheworken- vironment.
Educationisthemostimportanttypeofhumancapitalthatreinforcespro-
ductivityandincreaseswages.Furthermore,peoplewithahigheducationlevel
canbemoreinnovative,whichisalsoadrivingfactorofeconomicgrowth,such
as the development of new technologies and products, and an educated work-
forcecanbetrainedtounderstandandprocessnewinformation.Forinstance,
educationcanhelpaworkerworkwithartificialintelligence.
Fromthepointofviewofmicroeconomics,wecantaketheproductionpossi-
bilitiesfrontiertoillustratetheproductivityofacountry.Productionpossibili-
ties(PPF)isagraphthatshowsusthecombinationofoutputthattheeconomy
ofacountrycanproducewiththeavailableresourcesandtechnology.Inconse-
quence,technologicalinnovationandadvancementcanshiftthePPFoutward,
which is a sign of economic growth because more goods can be produced. To
illustratetheshiftofthePPF,wetakeevidenceofacountrythatproducescars andcomputers. 4 []
Numerous studies demonstrate the correlation between productivity and
workers with different levels of education such as workers with a master’s de-
gree or a PhD degree are more productive because their personal skills are
higherthanthosewithabachelor’sdegreeorhighschoolgraduation.Addition-
ally,theytendtohavehigheremploymentrates,broaderjobopportunitiesand
higherincomeovertime.Thefigureshowsusthatanadvanceintechnologyin
thecomputerindustryofacountryenablestheeconomytoproducemorecom-
puters. As a result, the production possibilities frontier shifts outward. Point
Gisoutsidethefrontierisnotfeasiblegiventheeconomy’sresourcesbutwith
theinnovationoftechnologythecountryisnowableto movefrompointAto
pointG,thereforetheproductionofbothcarsandcomputersincreases.
Numerous studies demonstrate the correlation between productivity and
workerswithdifferentlevelsofeducationsuchasworkerswithamaster’sdegree
or a PhD degree are more productive because their personal skills are higher
thanthosewithabachelor’sdegreeorhighschoolgraduation.Additionally,they
tendtohavehigheremploymentrates,broaderjobopportunitiesandhigherin- comeovertime. 5
Theprovideddatainthetableshowustheincreaseinemploymentrateas
education gets higher. By observation, we can see that the employment rate
washigherforthosewithhigherlevelsofeducationfromLessthanhighschool
completiontoBachelor’sorhigherdegree.Forexample,theoverallemployment
ratewas87percentforthosewithabachelor’sorhigherdegreeandforthose
whohadnotcompletedhighschoolwas61percentToillustratethecorrelation
between employment rates and educational attainment, we will use the data
from the US Department of Commerce. The data in Figure 1 clearly demon-
stratethis,themorepeopleattainhigherlevelsofeducationthelesstheywill
beunemployedamong25-34-year-oldsin2022.
Theprovideddatainthetableshowustheincreaseinemploymentrateas
education gets higher. By observation, we can see that the employment rate
washigherforthosewithhigherlevelsofeducationfromLessthanhighschool
completiontoBachelor’sorhigherdegree.Forexample,theoverallemployment
ratewas87percentforthosewithabachelor’sorhigherdegreeandforthose
whohadnotcompletedhighschoolwas61percent
Aswementionedbefore,educationcanbeafactorinanindividual’searn-
ings.IntheUnitedStatesnowadays,aphysicianearnsmorethanapoliceofficer
andafarmworker.Somepeopleliveinmansionsandridefancycarswhileothers
liveinsmallapartmentsandusepublictransportationtogotowork. 6
Figure3presentsdataontheaverageearningsofworkersfrom25to34years
oldbyeducationalattainmentfrom2010to2021.Thesedatashowtheincrease
in income from education. In 2010, a worker who has a bachelor’s degree on
average earned 50 per cent more than those who did not; by 2021, this extra
earnings has risen to 55 per cent. This suggests that the demand for skilled
labour has risen over time relative to the demand for unskilled labour which
hasledtoachangeinwages.Forexample,fordataanalysisjobs,thedemand
forworkerswhomastertheuseofExcelorSQLishigherthanforworkerswho onlyknowhowtouseit. 1.1.3 EffectsofTechnologyoneducation
Educationintoday’ssocietyduetothenewinnovationoftechnology.Firstly,
technologyfacilitatesaccesstoinformation.Infact,studentsandteacherscan
findresourcesandinformationontheinternet.Forexample,studentsdon’tneed
tobuyaphysicallearningtextbookbecausetheycaneasilyfinditonlinewhich
cansavethemanamountofmoney.Secondly,withtheinnovationoftechnology
online learning is more used today than in the past. There are a lot of online
learning platforms such as Massive Open Online Course and edX, these plat-
formsprovidecoursesthatcanbeaccessedbyallstudentsfromtheworldand
thesecoursesarefromanyleveloflearningfromlowtohighwithacertificate
afterfinishingtheprogram.Forexample,astudentcantakealanguagecourse,
abachelor’sdegreecourseorevenagraduatedegreetotallyonline.Additionally,
a wide range of majors is taught on the platform such as business, computer
scienceorhealthcareandnursing.Thus,onlinelearningplatformsprovideop-
portunities for individuals who don’t have access to traditional institutions or
havefinancialconstraintsbutallowthemtoacquirethesameskillsandknowl-
edge,therefore,increasingtheirproductivityandenhancinghumancapital.
Advancesintechnologyarereshapingeveryaspectoflife,includingeduca- 7
tion. With the internet becoming a vital learning tool, teachers hold the key
to using it effectively to ensure everyone benefits from a meaningful learning experience.
AstudybyLinandYang(2011)investigatedtheeffectivenessofWikitech-
nologyinenhancingthewritingskillsofcollegestudentsenrolledinEnglishasa
foreignlanguagewritingcourse.Thestudyinvolvedstudentswritingandpost-
ingpassagesonaWikipage,followedbypeerreviewandinstructorfeedback.
ThefindingsindicatedthatWikitechnologyhadapositiveimpactonstudents’
writingskills,withparticipantsreportingbenefitssuchasimprovedvocabulary,
spelling, and sentence structure, as well as the value of receiving immediate feedback.
SomeTechnologyTools ResourcesForStudentsWithDisabilities:
BackgroundOnAssistiveNeeds SupportingTechnology:Technologicalad-
vancements can unlock new avenues for learning and personal growth for all
students,regardlessofindividuallearningdifferencesorspecificneeds.There-
fore,numerousadvancedtoolshelpstudentswithdisabilitiestostudy.
SomeTechnologyTools ResourcesForStudentsWithDisabilities:
BackgroundOnAssistiveNeeds SupportingTechnology: Text-To-SpeechAssistiveTools
Text-to-speech (TTS) software is designed to help children who have difficul-
ties reading standard print. Common print disabilities can include blindness,
dyslexia,oranytypeofvisualimpairment,learningdisabilityorotherphysical
conditionthatimpedestheabilitytoread. AssistiveListeningSystems:
FMSystemsworksusingradiobroadcasttechnology.Withatransmittermicro-
phoneandareceiver,theteacherandstudentcanmaintainaconsistentsound
level regardless of distance and background noise. Additionally, ASHA notes
thatthehearingaidmicrophonecanbeturnedoff,sothestudentcanconcen- trateontheteacheralone.
OverviewofresearchonAssistiveTechnologyforstudentswithdisabilities
MathTalk:isaspeechrecognitionsoftwareprogramformaththatcanhelpstu- dentswitharangeofdisabilities.
OverviewofresearchonAssistiveTechnologyforstudentswithdisabilities 8
This systematic review of the literature has examined 31 articles gathered
from various databases. The review specifically focused on scientific articles
publishedbetween2009and2020,intendingtoassesshowtheuseofassistive
technologyimpactstheeducationofstudentswithdisabilities.Thefigurebelow
illustrates the distribution of relevant studies during this period, revealing a
noticeableupwardtrendinresearchwithinthisfield.Analyzingthepublication
yearsofthesestudiesindicatesthatthepublicationtrendbeganin2017andhas
continuedtothepresent.Intheyears2009–2016,onlyasmallnumberofarticles
were published, but from 2017 onwards, there has been a notable increase in
thenumberofpublicationsaddressingthisparticulartopic.
Basedonthearticlesunderreview,itisapparentthatthesetoolsareprimar-
ily utilized with visually impaired students (25 per cent), followed by hearing
impairedstudents(21.43percent),andphysicallyimpairedstudents(14.29per
cent). Students with autism (10.71 per cent), intellectual disability (7.14 per
cent), or behavioural disorder (3.57 per cent) are used to a lesser extent. In
17.86percentofthepublications,thetypeofdisabilityisnotspecified. 9 1.1.4
HowinvestinginEducationimprovestheQualityoflife?
Available evidence suggests that the returns on investment in fundamen-
taleducationconsistentlyoutweighthoseinlater-stageeducationandtraining
(Heckman,2006).Despitethis,manycountriesstillinadequatelyinvestinbasic
education, often due to a lack of awareness regarding the significant benefits,
fiscal constraints, and the difficulty of implementing comprehensive improve-
ments. This report seeks to address these challenges by synthesizing a vast
bodyofliteratureontheindividualandsocietalreturnsassociatedwithinvest-
ing in basic education. The ultimate goal is to encourage both the public and
privatesectorstoprioritizeinvestingintheyoungerpopulationasafundamen-
talaspectoffuturestrategies.Inourlifetime,wehaveobservedtheswiftglobal
shift toward a connected and knowledge-driven network. This integration of
globaleconomics,socialstructures,andinformationhassignificantimplications
for the evolving landscape of development. The emphasis is now on investing
inpeople,drivenbytheforcesofglobalizationandautomation.Thequalityof
humancapitalandtheinnovationitbringsforthwillplayacrucialroleinglobal
growth,particularlyinthenextdecade.Rapideconomic,demographic,social,
andpoliticalchangesareunfolding,accentuatingtheimportanceofthisprocess.
Asthefourthtechnologicalrevolutionprogressesatunprecedentedspeeds,the
world faces heightened uncertainty regarding future development and growth
prospects. At this critical juncture, it is essential to reassess the significance
of investing in people and creating supportive learning environments, aiming
to yield meaningful benefits for individuals and foster collective prosperity in communitiesworldwide.
Available evidence suggests that the returns on investment in fundamen-
taleducationconsistentlyoutweighthoseinlater-stageeducationandtraining
(Heckman,2006).Despitethis,manycountriesstillinadequatelyinvestinbasic
education,oftenduetoalackofawarenessregardingthesignificantbenefits,fis-
calconstraints,andthedifficultyofimplementingcomprehensiveimprovements.
Thisreportseekstoaddressthesechallengesbysynthesizingavastbodyoflit-
eratureontheindividualandsocietalreturnsassociatedwithinvestinginbasic
education. The ultimate goal is to encourage both the public and private sec-
torstoprioritizeinvestingintheyoungerpopulationasafundamentalaspect offuturestrategies. 10
InBecker’sseminalworkoninvestinginhuman capital(1964),hepresents
acompellingeconomicargumentforsupportingeducation,emphasizingsignif-
icantinternalratesofreturn.Heunderscoresthatthecomprehensivebenefits
of schooling are extensive, encompassing both monetary advantages and non-
monetaryperks,alongwithsocietalexternalities.AccordingtoBecker’sframe-
work,thereturnsoneducationcanbecategorizedintofourmaingroups:private
monetary,privatenon-monetary,societalmonetary,andsocietalnon-monetary.
Globally, a comprehensive analysis across regions indicates that education
yields positive and substantial returns. On average, each additional year of
education boosts individual earnings by 8 to 10 per cent, with women expe-
riencing larger impacts, reaching close to 15 per cent in North America and
Sub-SaharanAfrica(MontenegroandPatrinos,2014).Completingsixyearsof
primaryschoolingresultsinwageincreasesof60to80percent,while12years
ofbasiceducationleadstoovera300percentriseinearnings.Somecountries,
including Rwanda, South Africa, Ethiopia, Namibia, and Burundi, exhibit ex- 11
ceptionally high returns. Among 26 SDC priority countries, returns for basic
educationsurpassthosefortertiaryeducationin16ofthem.
Theextensiveevidenceinthisreportemphasizestheconsiderablebenefitsof
investinginbasiceducationforindividuals,communities,andnations.Prioritiz-
ingqualityimprovementsinprimaryandsecondaryeducationnotonlyenhances
lives and societal progress but also presents substantial unrealized economic
growth.OECD(2010)estimatesthattheopportunitycostsofnotboostingba-
sic education quality could amount to around US 260 trillion dollars, posing
a significant obstacle to achieving inclusive and sustainable growth.Moreover,
theinfluenceofeducationextendsbeyonditsdirecteffectsonoverallworkforce
productivity, with notable externalities. According to Moretti (2004), for ev-
ery percentage point rise in the supply of college-educated workers, wages for
high-school-educatedworkersincreaseby1.6percent,andforworkerswithout
a high-school education, the increase is 1.9 per cent. This suggests significant
productivitygainsresultingfromtheconcentrationofhigh-qualitylabour,pro-
vidingspilloverbenefitsevenforindividualswithlowerlevelsofeducationand skills.
The extensive evidence in this report emphasizes the considerable benefits
of investing in basic education for individuals, communities, and nations. Pri-
oritizing quality improvements in primary and secondary education not only
enhances lives and societal progress but also presents substantial unrealized
economic growth. OECD (2010) estimates that the opportunity costs of not
boosting basic education quality could amount to around US 260 trillion dol-
lars,posingasignificantobstacletoachievinginclusiveandsustainablegrowth. 1.1.5
WhyinvestinginEducationshouldbeapriority?
1.EducationBringsAboutEmpowerment
Educationbringsabouttheempowermentofpeopleandthetransformationof
lives.Itisasourceofconfidence,hopeanddignity.Inaddition,Educationbrings 12
aboutasteadygrowthintheeconomy.Educationmightseemexpensive.How-
ever,anyamountthatisspentbyanationineducatingitspopulacebringsabout
lotsofpositivegainsfortheeconomyofthatnation,aswellasthatoftheworld.
2.EducationisImportantforChildren
Childrenarethefutureofeverypopulationandasaresultofthis,theyshould
beeducated.Thefutureandthedevelopmentofa countrydependonhowedu-
cationallydevelopedthechildreninacountryare.Moreover,througheducation,
thevaluesoftheoldergenerationcanbepassedontothechildren.Also,edu-
cationisavehiclethroughwhichtheyoungpopulationofanationcandevelop physicallyandmentally.
3.EducationImprovesthestandardofliving
Withtherightinvestmentineducationbythegovernment,therecouldbere-
ductions in the importation rate of basic amenities and things that make life
mucheasier.Andanincreaseintherateofproductionofthesedevices.This,
will,therefore,resultincheaperpricetagsattachedtotheseproducts.Thisul-
timatelymakesthemavailableandleadstoanincreaseinthestandardofliving. 4.EducationReducesInsecurity
Issuesofinsecurityaremorerampantinanenvironmentthatisdominatedby
joblessanduneducatedpeople.Moreoftenthannot,thesepeopleareyoungand
havebeenunabletogetanyformofeducationortherighteducationbecause theyarelessprivileged.
Forourenvironmenttobemadesafe,thevalueofeducationhastoberec-
ognized by the government and adequate funds invested in making education
better.Withanincreaseineducationwillcomeadecreaseininsecurity.
5.EducationPromotesNationalInterest
Thepromotionofnationalinterestisperhapsoneofthemostimportantben-
efits of education to the government of any nation. Individuals who are very
educatedaregenerallymoreintelligentthanindividualswhoarenotveryedu-
catedornoteducatedatall.Theycancometoreasonableconclusionsbyputting
facts together. When the government invests in education, more people from
thatcountryhavewhatisrequiredtoworkforthebettermentofthecountry. 6.Educationleadstodevelopment
Alotofdevelopingcountrieshaveeducationastheirbackbone.Forthegrowth
of the economy of any developing nation to be sustained, the government of
eachcountryhastoinvestalotintotheeducationoftheyoungineachcountry. 7.EducationPreventsDependence
Beingeducatedgiveseverycitizenofacountrytheabilitytoearnadecentliv-
ing.Whenthegovernmentofanationinvestsineducation,itpreventsdepen-
denceonthegovernmentaswellasonfellowcitizens.Thecitizensofacountry
become innovative when properly educated. This not only helps them earn a
verydecentliving,butitalsoleadstoanincreaseinthenumberofavailablejobs. 13
Overall, education plays a crucial role in forming individuals and nations.
Individualsacquiretheknowledgeandskillsnecessary toimprovetheirproduc-
tivityandhumancapital.Therefore,investingineducationcanfostereconomic
growth,reducepovertyandinequalityandimprovethequalityoflife.Indeed,
asmentionedbeforehumancapitalcanbeenhancedthroughqualityeducation
whichfostersaskilledworkforce,increasesproductivityandcreatesnewinno-
vationsleadingtoeconomicsuccess.High-skilledworkerscanthereforeescape
poverty with a higher paid job. Finally, by ensuring the quality of education,
investingshouldbeconsideredbythegovernment.Infact,infrastructureshould
bemoredeveloped,teachersmustbetrainedwiththebestprogram,andpro-
videaccesstoeducationforlowfinancialresources. 1.2 ECONOMIC 1.2.1 Definition
Economicsisasocialsciencethatfocusesontheproduction,distribution,and
consumption of goods and services and analyzes the choices that individuals,
businesses,governments,andnationsmaketoallocateresources.Italsocanbe
dividedintotwotypes:microeconomicsandmacroeconomics.Microeconomicsis
thestudyofdecisionsmadebypeopleandbusinessesregardingtheallocationof
resources,andpricesatwhichtheytradegoodsandservices.Itconsiderstaxes,
regulations,andgovernmentlegislation.Microeconomicsfocusesonsupplyand
demand and other forces that determine price levels in the economy. It takes
abottom-upapproachtoanalyzingtheeconomy.Incontrast,macroeconomics
studiesthebehaviourofacountryandhowitspoliciesimpacttheeconomyas
awhole.Itanalyzesentireindustriesandeconomies,ratherthanindividualsor
specificcompanies,soit’satop-downapproach. 1.2.2 Economicdevelopment
Ariseintheproductionofproductsandserviceswithinagivenperiodrela-
tivetoapriorperiodisknownaseconomicgrowth.Itcanbecalculatedinreal
terms(adjustedtoaccountforinflation)ornominal terms.Althoughalternative
metricsareoccasionallyemployed,grossnationalproduct(GNP)orgrossdo-
mesticproduct(GDP)isthetraditionalmeasureofaggregateeconomicgrowth.
Therearesixkeytakeawaysfromeconomicgrowth,suchas:economicgrowth
canbeattributedtocapitalgoods,laborforce,technology,andhumancapital
increases,aneconomyexperiencesgrowthasitproducesmorecommoditiesand
services, using estimates like GDP, economic growth is typically calculated as
theriseinthetotalmarketvalueofnewlycreatedproductsandservices,eco-
nomicgrowthoccursinfourstages:expansion,peak,contraction,andtrough,
increasesingovernmentspendinghaveagreatereffectonstimulatingeconomic
growththantaxcutsdo,itisdoubtfulthateconomicgrowthwouldbesustained
ifitsbenefitsarerestrictedtoaselectfew.Simplysaid,economicgrowthisthe
riseinaneconomy’stotalproduction,whichtypicallyshowsupasanincrease
innationalrevenue.Ariseinaveragemarginalproductivityisfrequently,but 14
notalways,correlatedwithoveralloutputimprovements.Whenincomesriseas
aresult,customersareencouragedtospendmoremoney,raisingtheirlevelof
livingandmaterialqualityoflife.Growthisfrequentlymodelledineconomics
asafunctionoflabourforce,technology,humancapital,andphysicalcapital.To
putitplainly,morepeopleofworkingage,eitherintermsofnumberorqual-
ity, together with better tools and recipes for combining labour, capital, and
rawmaterials,willresultinhighereconomicoutput.Theeconomyhasseveral
phasesofactivity.Theterm"businesscycle"referstothismovement.Thereare
fourphasestoit:Expansion-Duringthisstage,realGDPisgrowingalongwith
increasesinemployment,income,industrialproduction,andsales.Contraction
-Thecomponentsofanexpansionallstarttodiminishduringthisstage.When
aconsiderabledropineconomicactivityoccursthroughouttheeconomy,itis
referredtoasarecession.Peak-aneconomicexpansionreachesitslimitatthis
point.Itisatippingpoint.Trough-Thisisthelowestpointofaneconomicde-
cline.Governmentsfrequentlyattempttoboosteconomicgrowthbydecreasing
interestrates,whichlowersthecostofborrowingmoney.Butthat’snotgoing
to last forever. Rates must eventually be raised, as they did in 2022, to fight
priceinflationandpreventtheeconomyfromblowingapart.RealGDPisthe
most often used indicator of economic growth. This is the entire worth of all
theproductsandservicesgeneratedinaneconomy,adjustedfortheimpactof
inflation. Real GDP can be seen in three different ways: Quarterly growth at
anannualrate-ThisexamineshowtheGDPchangesfromquartertoquarter
andthencompoundsthatchangetogetanannualrate.Forinstance,theyearly
ratewouldbeestimatedtobe1.2percentifthechangeinonequarterwas0.3
per cent. Four-quarter or year-over-year growth rate - this examines how the
GDPchangesfromquartertoquarterandthencompoundsthatchangetoget
anannualrate.Forinstance,theyearlyratewouldbeestimatedtobe1.2per
centifthechangeinonequarterwas0.3percent.Annualaveragegrowthrate
-Thisrepresentsthemeanofthevariationsthroughoutthefourquarters.For
instance,theyearlyaveragegrowthratefor2022wouldbe7.5percent÷ 4=
1.875percentifthefour-quarterrateswere2percent,3percent, 1.5percent, and1percent.
Economic progress: A common definition of economic growth is the rise
in the value of all the components of an economy. Standard of living, health
care accessibility, and minimum pay are a few common indicators of financial
stability. But how should we now define progress given the pervasiveness of
technology, the effects of AI on the workforce, the emergence of new trade
restrictions,andthemountingneedtoaddressclimatechange?Whogainsand
wholosesfromgrowth?Howcanwebalancederegulation,theenvironment,and awideningwealthdisparity? 1.2.3
ThreestagesofEconomicdevelopment 3stagesofeconomicdevelopment:
-Astructuraltransformationoftheeconomy *Ademographictransition
Thetransitioncanbesummarizedinthefollowingfourstages,whichareillus- 15 tratedinFigurebelow:
Stage1—Highbirthanddeathratesleadtoslowpopulationgrowth.
Stage2—Thedeathratefallsbutthebirthrateremainshigh,leadingtofaster populationgrowth.
Stage3—Thebirthratestartstofall,sopopulationgrowthstartstoslow.
Stage4—Thebirthratereachesthesamelowlevelasthedeathrate,sopopu- lationgrowthslowstozero.
*Graphofthestagesofdemographictransition -Aprocessofurbanization
Urbanizationistheprocessbywhichanincreasingproportionofapopulation
lives in urban areas, leading to the growth and expansion of cities. This phe-
nomenonisoftenassociatedwitheconomicdevelopment,industrialization,and
socialchanges.Theprocessofurbanizationtypicallyinvolvesseveralkeystages:
Rural-to-Urban Migration: One of the primary drivers of urbanization is the
migration of people from rural areas to urban centres in search of better eco-
nomicopportunities,improvedlivingstandards,andaccesstoamenities.This
migration can be motivated by factors such as job opportunities, education,
and healthcare facilities. Industrialization: Economic development and indus-
trial growth are closely linked to urbanization. As industries and businesses
expand, they attract a workforce, leading to the establishment and growth of
urbancentres.Thisprocessisoftencharacterizedbytheconcentrationofeco-
nomicactivitiesinurbanareas.InfrastructureDevelopment:Urbanizationne-
cessitatesthedevelopmentofinfrastructuretosupportthegrowingpopulation
andeconomicactivities.Thisincludestheconstructionofroads,bridges,pub-
lic transportation systems, water supply networks, sewage systems, and other
essentialservices.UrbanSprawl:Asurbanizationprogresses,citiestendtoex-
pand outward, resulting in urban sprawl. This involves the spread of urban 16
areas into surrounding rural or undeveloped land, leading to the formation of
suburbsandperi-urbanareas.ChangesinLandUse:Theprocessofurbaniza-
tion involves a transformation in land use patterns. Agricultural land may be
converted into residential, commercial, or industrial areas. This shift in land
useisoftendrivenbythedemandforhousingandspaceforvariouseconomic
activities.PopulationDensity:Urbanizationismarkedbyanincreaseinpopu-
lationdensitywithinurbanareas.Higherpopulationdensityis acharacteristic
feature of cities, with people living in close proximity to one another. Social
and Cultural Changes: Urbanization brings about social and cultural changes
as people from diverse backgrounds come together in urban centres. This can
leadtotheexchangeofideas,culturaldiversity,andtheformationofnewsocial
norms and behaviours. Economic Opportunities: Urban areas typically offer a
widerrangeofeconomicopportunities,includingemploymentinvarioussectors
suchasmanufacturing,services,andtechnology.Thiscancontributetohigher
incomelevelsandanimprovedstandardoflivingformanyresidents.Challenges
and Issues: While urbanization brings about positive changes, it also presents
challengessuchasincreasedtrafficcongestion,pollution,housingshortages,and
thestrainonsocialservices.Managingthesechallengesiscrucialforsustainable
urban development. Urbanization is a complex and multifaceted process that
varies across regions and countries. It plays a significant role in shaping the
economic,social,andenvironmentallandscapeofasociety.Policymakersoften
focus on sustainable urban development to ensure that the benefits of urban-
izationaremaximizedwhileaddressingassociatedchallenges. 1.2.4
RolesofresearchingmarketsonEconomicdevelopment
Researchingmarketsplayacrucialroleineconomicdevelopmentbyprovid-
ing valuable insights and information that can inform decision-making, policy
formulation, and business strategies. Here are some key roles of researching
marketsineconomicdevelopment:IdentifyingOpportunitiesandTrends:Mar-
ketresearchhelpsinidentifyingemergingopportunitiesandtrendsinvarious
industries. This information allows businesses and policymakers to capitalize
on new economic prospects, fostering growth and development. Understand-
ingConsumerBehavior:Researchingmarketshelpsinunderstandingconsumer
preferences, buying patterns, and behaviours. This knowledge is essential for
businessestotailortheirproductsandservicestomeettheneedsanddemandsof
themarket,therebydrivingeconomicactivity.MarketEntryandExpansion:For
businesses,marketresearchaidsinmakinginformeddecisionsregardingmarket
entryorexpansion.Understandingthecompetitivelandscape,consumerneeds,
and regulatory environment enables companies to plan and execute strategies
thatcontributetoeconomicdevelopment.RiskMitigation:Throughmarketre-
search,potentialrisksandchallengescanbeidentified.Thisproactiveapproach
allowsbusinessesandpolicymakerstodevelopstrategiestomitigaterisks,en-
suringmorestableandsustainableeconomicdevelopment.PolicyFormulation:
Governmentsusemarketresearchtoformulateeffectiveeconomicpolicies.By
understandingmarketdynamics,policymakerscancreateregulationsthatpro- 17
motefaircompetition,consumerprotection,andoverallmarketefficiency.Re-
source Allocation: Efficient allocation of resources is vital for economic devel-
opment. Market research helps in identifying sectors with high growth poten-
tial, allowing governments and businesses to allocate resources effectively to
drivedevelopmentinthoseareas.PromotingInnovation:Researchingmarkets
provides insights into technological advancements and innovation trends. This
information is crucial for businesses and policymakers to foster a culture of
innovation,whichisakeydriverofeconomicdevelopment.EnhancingCompet-
itiveness:Marketresearchhelpsbusinessesstaycompetitivebyunderstanding
theirstrengthsandweaknessesrelativetothemarket.Thisinformationallows
forstrategicadjustmentstoimprovecompetitivenessandcontributetooverall
economic growth. Globalization Strategies: In an increasingly interconnected
world,marketresearchassistsbusinessesandgovernmentsindevelopingeffec-
tiveglobalizationstrategies.Understandinginternationalmarketsandconsumer
preferenceshelpsinexpandingeconomicactivitiesbeyondnationalborders.Job
Creation:Researchingmarketscanhelpidentifysectorswiththepotentialfor
jobcreation.Bysupportingthegrowthofindustrieswithhighemploymentpo-
tential,marketresearchcontributestoreducingunemploymentandimproving
overalleconomicwell-being.Insummary,researchingmarketsisafoundational
activitythatprovidestheinformationnecessaryforinformeddecision-making,
effective resource allocation, and strategic planning, all of which are essential
forsustainableeconomicdevelopment. 1.2.5
DeterminantsofEconomicdevelopment
Inthemodernera,theearliestanswertothequestionofwhatdetermined
growthwasfromthemasterhimself,AdamSmith,inTheWealthofNations.For
example,theeconomicsofinstitutionswasfullyanticipatedbyLewis(1955)—
TheTheoryofEconomicGrowthhadasectionentitled“EconomicInstitutions.”
Inadditiontoemphasizingtheimportanceofinstitutions,Lewis(1955)outlined
fourprinciplesofgrowth:factoraccumulation,humancapital,institutions,and
policy.Healsoofferedthreeproximatecausesofgrowth:“efforttoeconomize(ef-
ficiency);increaseofknowledgeanditsapplication;andincreasingtheamountof
capitalorotherresourcesperhead” (Lewis1955,11).Inshort,growthisabout
increasing the application of factors, particularly human and physical factors,
andobtaininganextrayield(productivity)fromthesefactors,aconcepttoday
knownastotalfactorproductivitygrowth. FOREXAMPLE:
-FactorAccumulation:Capital,Labor,andHumanCapital
The simple idea behind the factor accumulation theory is that higher inputs
canmeanhigheroutputs.Capitalistheoldestknowndeterminantofeconomic
growth:accumulatemorecapitalandgrowfaster.Today,itisastylizedfactand
conventionalwisdomthatprivatereturnstoeducationarehigh,oftenveryhigh.
Inthemid-1980s,therewasincreasedattentiontotheindirectandincreasing
social returns to education, inspired in part by Paul Romer (1986). However, 18
eventhoughvariousproductionfunctionmodelsfindthateducationgenerates
positivereturnsonaneconomy-wide. -ReallocationofLabor
Cheapandunlimitedsuppliesoflabourareavailableinmosteconomiesbefore
theonsetofrapideconomicgrowth.Atthispoint,theecosystemisinequilib-
rium;thereislittleproductivitygrowthinagriculture;andmostpeopleare,and
remain,onthefarm.Technologicalgrowth,eitherwithinoroutsideagriculture,
releaseslabour.Ifthisgrowthisoutsidetheeconomy,thenoutwardmigration
causesthesupplyofdomesticagriculturallabourtodecline.Alternatively,tech-
nologicalgrowthinthedomesticindustryinduceslabourtoleavethefarm.In
both cases, growth is accompanied by a decline in the share of agriculture in
the economy’s GDP.The level of income in an economy at any point in time
representstheaccumulatedgrowthinincomesovertime,soinvestigatingwhat
produces higher incomes is really investigating the determinants of economic
growth.Numerouspotentialgrowthdeterminantshavebeenidentifiedoverthe
years, but mapping reliable channels of growth has been a major problem for
analysis.Whatfurtherconfoundsthesearchforchannelsofgrowthisthatwhat
mattersforgrowthdiffersovertime.Butthatisallconjecture.Intheend,the
questionremainsthesame:Isthereonebasicsetofcauses,orleversthatcan bepulled,toenhancegrowth?
Inthemodernera,theearliestanswertothequestionofwhatdetermined
growthwasfromthemasterhimself,AdamSmith,inTheWealthofNations.For
example,theeconomicsofinstitutionswasfullyanticipatedbyLewis(1955)—
TheTheoryofEconomicGrowthhadasectionentitled“EconomicInstitutions.”
Inadditiontoemphasizingtheimportanceofinstitutions,Lewis(1955)outlined
fourprinciplesofgrowth:factoraccumulation,humancapital,institutions,and
policy.Healsoofferedthreeproximatecausesofgrowth:“efforttoeconomize(ef-
ficiency);increaseofknowledgeanditsapplication;andincreasingtheamountof
capitalorotherresourcesperhead” (Lewis1955,11).Inshort,growthisabout
increasing the application of factors, particularly human and physical factors,
andobtaininganextrayield(productivity)fromthesefactors,aconcepttoday
knownastotalfactorproductivitygrowth. FOREXAMPLE:
-FactorAccumulation:Capital,Labor,andHumanCapital
The simple idea behind the factor accumulation theory is that higher inputs
canmeanhigheroutputs.Capitalistheoldestknowndeterminantofeconomic
growth:accumulatemorecapitalandgrowfaster.Today,itisastylizedfactand
conventionalwisdomthatprivatereturnstoeducationarehigh,oftenveryhigh.
Inthemid-1980s,therewasincreasedattentiontotheindirectandincreasing
social returns to education, inspired in part by Paul Romer (1986). However,
eventhoughvariousproductionfunctionmodelsfindthateducationgenerates
positivereturnsonaneconomy-wide. -ReallocationofLabor
Cheapandunlimitedsuppliesoflabourareavailableinmosteconomiesbefore 19
theonsetofrapideconomicgrowth.Atthispoint,theecosystemisinequilib-
rium;thereislittleproductivitygrowthinagriculture;andmostpeopleare,and
remain,onthefarm.Technologicalgrowth,eitherwithinoroutsideagriculture,
releaseslabour.Ifthisgrowthisoutsidetheeconomy,thenoutwardmigration
causesthesupplyofdomesticagriculturallabourtodecline.Alternatively,tech-
nologicalgrowthinthedomesticindustryinduceslabourtoleavethefarm.In
both cases, growth is accompanied by a decline in the share of agriculture in theeconomy’sGDP. Education:
Itisalmostatautologythateducationbringsabouthigherincomesforindivid-
ualsandsocieties.Educationhelpsmakeinvestmentmoreproductiveandleads
tohighergrowth.Microdataacrosstheworldyieldveryrobustresultsforthe
positive effects of education: Each extra year of education adds about 12 per
cent to a person’s lifetime income, although in macro data (five-year periods)
there is no significant coefficient for education. This effect is magnified if the
countryisopen,ormoreaccurately,hasanundervaluedexchangerate,because
thisallowsfortheimportationoftechnologythatworkerswithahigherlevelof
education can use to improve their productivity and that allows the economy tocatchupwiththefrontier. 20 2
EDUCATION AND ECONOMIC DEVELOPMENT
2.1 THE CONNECTION BETWEEN EDUCATION AND ECO- NOMIC DEVELOPMENT
First,whatiseconomicdevelopment?Intheory,economicdevelopmentisa
processinwhichaneconomygrowsorchangesinanefficientwayandbecomes
moreadvanced.Moreover,whenacountryexperiencesanincreaseineconomic,
GDP, technological advancements, quality of life and more importantly, the
quality of education also changes in a good way. To explain this pattern, why
economicgrowthleadstootherthingsrising,especiallyeducation.Workerswho
can read and write very well are more productive than workers who cannot.
Teacherswhohaveamaster’sdegreeorPhDdegreeinteachingare alsomore
productive. Furthermore, these people may be more innovative and invention
is one of the major drivers of economic growth. Many of the most important
benefits of education are frequently invisible. For instance, education seems
to develop a greater sense of conscientiousness both in the school, but also
ultimately,later,intheworkplaceandalsoinindividuals’rolesascitizens.So,
a well-educated society may become a less corrupt society and thus a society
betterabletoenjoythefruitsofeconomicgrowth.Educationmayalsomakefor
bettervoters,better-informedvoters,andamoreinvolvedcitizenry.Thework
byeconomistBryanCaplanin“TheMythoftheRationalVoter” hasshownthat
ifindividualsareeducated,theyaremorelikelytounderstandtheperspectives
ofeconomistsoneconomicgrowthandmoreappreciatewhentheyreceivethe
benefitsoffreemarketsandactaccordinglytogetinvolvedinpolitics.
Thisfigureshowsseveraldataeveryfiveyearsfrom2009Bangladeshexpe-
riences a huge rise in economic which is in GDP per capita and GDP growth
andrightafterthatfollowedbyliteracyrateinadultsandyoung 21
ThisstatisticshowsthatinVietNaminthesameamountoftime,Vietnamese
peoplewitnessedadramaticincreaseineconomy,GDPgrewalmostdoublethe
figure from 1,225.85 to 3,491.09 and also noticed on the number, government
in VietNam has paid more attention to school, which show by the rise in the
number of school enrollment from 97.42 in 2009 to 117.42 in 2019, the same
patternappearsinliteracyrateinyouth,adultandproportionofgovernment expenditureineducationalso. 2.2 HUMAN CAPITAL THEORY 2.2.1 Definition
Humancapitalisdefinedasskills,assets,andexperiencesthatanindividual
haswhichaddvaluetoacompany.Itexplainsthateveryemployeehasthesame
value,itdependsontheirknowledge,skillsandassets.Humancapitalisaway
todetermineeconomicperformanceinaworkplaceandthisideaofhumancapi-
talitselfgaverisetohumancapitaltheory.Thistheoryhasdevelopedovertime
buthascontinuedtobeatheorythatshapesgovernmentpoliciesandbusiness
decisions.Inessence,humancapitaltheoryassertsthathumancapitalisakey
determinantofeconomicsuccessinallindustries. 22
*Understandinghumancapitaltheory
Inthe1950sand1960s,TheodoreSchultzandGaryBeckerintroducedthecon-
ceptofhumancapitaltodemonstratehowindividuals’investmentinthemselves
wasanalogoustofirms’investmentsinphysicalcapital.Inotherwords,justas
firms decide to invest in new machinery to increase their production, individ-
ualscaninvestintheirowneducationtogainfuturebenefits.Assuch,human
capital can be seen as a means of production – into which investment yields additionaloutputs.
Human Capital Theory (HCT) concludes that investment in human capi-
talwillleadtogreatereconomicoutputshoweverthevalidityofthetheoryis
sometimeshardtoproveandcontradictory.Inthepast,economicstrengthwas
largelydependentontangiblephysicalassetssuchasland,factoriesandequip-
ment. Labour was a necessary component, but increases in the value of the
businesscamefrominvestmentincapitalequipment.Moderneconomistsseem
toconcurthateducationandhealthcarearethekeystoimprovinghumancap-
italandultimatelyincreasingtheeconomicoutputsofthenation(Becker1993).
The x-axis is time/age, and the y-axis is earnings. This graph depicts the
go/no-godecisionregardingpost-secondarydecisionsforatypical18-year-old.
Thelowerofthetwocurvesrepresentsalifetimeincomepathforsomeonewith
ahighschooleducation,whiletheuppercurvedescribesitforsomeonewitha
bachelor’sdegree.Area3isthereforethenotional“benefit” ofhighereducation.
Buttherearecosts,namely,theincomeforegonefromtimespentstudying(area
2)andtheactualfeespaidtoattendtheinstitution(area1).Ifarea3islarger
than area 1+2 (all figures suitably adjusted into net present values) then the
educationis“worthit” andastudentshouldinvest.
*CharacteristicsofHumanCapitalTheory
Everyemployeebringsadifferentvalueofhumancapitaltotheworkplace.Hu-
man capital is characterized by factors such as education, qualifications, work 23
experience, social skills, and communication skills. An increase in any of the
above characteristics will increase the productivity of an employed worker or
willhelpanunemployedmemberofthelabourforcebecomehired.Forexample:
the average wage premium for someone with a four-year degree, according to
a 2021 study by Georgetown University. The researchers found that someone
with a bachelor’s degree can earn an average salary 75 per cent higher than
the same person with only a high school diploma. However, An individual’s
human capital may depreciate if they can’t or won’t adopt new technology or
techniques.Conversely,thehumancapitalofsomeonewhodoesadoptthemwill. *UseofHumanCapital
1.TheBeckerview:humancapitalisdirectlyusefulintheproductionprocess.
More explicitly, human capital increases a worker’s productivity in all tasks,
thoughpossiblydifferentialindifferenttasks,organizations,andsituations.
2.TheGardenerview:Asimpleversionof thisapproachwouldemphasizemen-
talvs.physicalabilitiesasdifferentskills.
3.TheSchultz/Nelson-Phelpsview:HumanCapitalisespeciallyusefulin deal-
ingwith“disequilibrium” situations,ormoregenerally,withsituationsinwhich
thereisachangingenvironment,andworkershavetoadapttothis.
4.TheBowles-Gintisview:“humancapital” isthecapacitytoworkinorganiza-
tions,obeyorders,inshort,adapttolifeinahierarchical/capitalistsociety.
5.TheSpenceview:observablemeasuresofhumancapitalaremoreasignalof
abilitythancharacteristicsindependentlyusefulintheproductionprocess. 2.2.2 AdvantagesandDisadvantages
Humancapitalshowsclearadvantages:itenablesustothinkofnotonly the
yearsofschoolingbutalsoofavarietyofothercharacteristicsaspartofhuman
capital investments. These include school quality, training, attitudes towards
work, etc. Using this type of reasoning, we can make some progress towards
understanding some of the differences in earnings across workers that are not
accounted for by schooling differences alone. However, The disadvantages are
also related. At some level, we can push this notion of human capital too far,
and think of every difference in remuneration that we observe in the labour marketasduetohumancapital. 3 POLICIES
NelsonMandelaoncesaid:"Destroyinganynationdoesnotrequiretheuse
of atomic bombs or the use of long-range missiles. It only requires lowering
thequalityofeducationandallowingcheatingintheexaminationsbythestu-
dents.";“Thecollapseofeducationisthecollapseofanation”.
Educationisconsideredafundamentalhumanrightandakeydriverforeco-
nomicgrowthanddevelopment.Therefore,educationpolicyplaysacrucialrole 24
indevelopinganation’seconomy. Definition:
Educationpolicyreferstothesetofrules,regulations,andguidelinesthatgov-
erntheprovisionofeducationinacountry.Theaimofitistoguaranteethatall
citizenshavefairaccesstoqualityeducationandthattheeducationsystemis
effectiveandefficient.Concernslikecurriculumdevelopment,teacher training,
and the provision of educational resources are also included in the domain of educationpolicy.
Relationshipbetweeneducationpolicyanddevelopmenteconomics:
Educationpolicyanddevelopmenteconomicsare2relativelyclosedfields.Ed-
ucationisakeyfactorindevelopingacountry’seconomy,andeducationpolicy
ensures that every citizen gains access to education. Furthermore, education
policyalsohelpstomaintainthesustainabledevelopmentofacountryandre- ducepoverty.
For example, the provision of free primary education in many developing
countries such as Cuba, Mali, and DRC shows the close relationship between
developingeconomicsandeducationpolicy.Thispolicyaimstoincreaseaccess
toeducationandreducepovertybyguaranteeingallstudentshavetheoppor- tunitytoattendschool. Policyoptions
Inordertoimproveeducationalquality,therearenumerouspolicyoptions.Here
aresomeofthebesteducationpoliciestoimprovedevelopmenteconomics: 1.InvestmentinEducation
This is a well-known and effective policy. Many countries have spent a lot of
moneyoneducationinvestment,suchasNorway(6.6 percentofthecountry’s
GDP),Chile(6.5percent),theUS(6percent),etcandVietnam,2022,edu-
cation and training sector accounted for a GDP value of approximately 355.9
trillionVietnamesedongs(3.74percent).Therearetwowaystoinvestinedu- cation:
Increasing Funding: there should be adequate and sustainable funds raised
by governments at all levels of education. This should include investment in
infrastructure,teachingtraining,learningprogramsandresources.Thegovern-
mentshouldalsoencouragetheprivatesectortoinvestineducationbygiving
themtaxincentivesorreducingsomeregulatorybarriers.
Scholarship and Bonuses: individuals from disadvantaged backgrounds al-
ways have difficulty attending school, especially higher education. Therefore,
the government should provide financial assistance for low-income families, to
encourage their children to go to school and serve the country. For instance,
therearescholarshipsandstudyincentivesinInternationalUniversitiestoin-
centivizestudentstolearn,especiallystudentswhohavedifficulties. 25
2. Modifying curriculum In recent years, demand for high-skilled workers
has been rocketing. This challenges governments to take action in modifying
required skill sets to maintain competitiveness in the market. To materialize
that,thereshouldbesomemodificationsinthecurriculumprogram:
‘STEMEducation:Intheworldwheretechnologyplaysanirreplaceablerole,
STEM(Science-Technology-Engineering-Mathematics)subjectsshouldbecon-
sidered to be core and compulsory subjects to provide based knowledge for
studentsforjobsthatrequirehighhumancapital.
Languages:Nowadays,foreignorganizationstendtoflocktoothercountries
foreconomicexpenditureandseekingforskilledworkers.Therefore,languages
should be considered as subjects to prepare for students who might work for foreigncompaniesinthefuture.
Critical thinking and problem solving: having the based knowledge of sub-
jectsisnotenough.Studentsmusthavetheabilitytouseknowledge,anddata
toeffectivelysolveproblems.Furthermore,dataisconstantlychangingdueto
dailyvariables.Therefore,studentsmustalsobeflexibleandadaptive.Forthose
reasons,criticalthinkingskillsmustbebroughtintothecurriculumprogram.
EntrepreneurshipandInnovation:Asfutureworkersincompanies,especially
companies related to the economy and market, students must start to think
abouthowtheycanmakevaluefortheircompaniestogetdevelopmentorpro-
motionintheiroccupation.Onthataccount,EntrepreneurshipandInnovation
shouldbeinthestudyingprogram.Promotingentrepreneurshipskillscanen-
hancestudents’mindsetofinnovation,andcreativity.
3. Vocational Education and Training: One of the ways to reduce income
inequalityisbyprovidingpracticalskillsthroughvocationalandtechnicaledu-
cation.Individualswhodon’thaveacademicbackgroundsmayhavemoredis-
advantagesthanoneswhohavefullyaccessededucation.Therefore, vocational
education will be beneficial for those students and help them succeed In the
future. Ultimately, it can grow economic productivity when more individuals havethenecessaryskills. 4 CONCLUSION
According to all facts and data that have been illustrated throughout this
essay,thereisnodoubtthateducationhasstrongtieswitheconomicdevelop-
ment.Educationservesasacoreforprogress,havingimpactsonsuchimportant
anglesofbotheconomyandsocietyaslabourproductivity,health,familystruc-
ture,etc.Withallthenumbersandtablesthathavebeenprovided,anation’s
literacy rates and education can decide whether the country’s GDP is rising
ordecreasing.Moreover,socialoutcomesforinvestingineducation,suchasre- 26
ducinginequalityandcorruptionorbetteringlife,haveprovenitssignificance.
Developingeducationindevelopingcountries,suchasVietnam,isconsidereda
top-nationpolicy.Therearemanywaystoinvestineducation:applyingtechnol-
ogy to teaching and studying, developing infrastructure, providing incentives, etc. 5 PERSONAL OPINION
Although education is crucial, the economy is not changed or stabilized by
educationalone.Duetotheavailabilityofalternatives,onlybasicandsecondary
educationarerequiredinthemajorityofdevelopednations;attendanceatcol-
legesandhighschoolsisoptional.Simplysaid,havinganeducationmakesyoua
littlemorecomfortablewithyourstanding,particularlyintermsofsocialstan-
dards.Itisnotthebasisuponwhichonemayenjoylife’sfundamentalluxuries.
Orassomeoneoncestated,"Achievementmaybeattainedthroughavarietyof
paths,notonlyeducation”.Asgenderandageroleswerepreviouslymentioned,
I assume that the more educated a nation’s population is, the better off its governmentis.
Although education is crucial, the economy is not changed or stabilized by
educationalone.Duetotheavailabilityofalternatives,onlybasicandsecondary
educationarerequiredinthemajorityofdevelopednations;attendanceatcol-
legesandhighschoolsisoptional.Simplysaid,havinganeducationmakesyoua
littlemorecomfortablewithyourstanding,particularlyintermsofsocialstan-
dards.Itisnotthebasisuponwhichonemayenjoylife’sfundamentalluxuries.
Orassomeoneoncestated,"Achievementmaybeattainedthroughavarietyof paths,notonlyeducation”. Reference:
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ratesfbclid=IwAR2M 4jkprnDRwwlybjbkEP EaaeikSGvKOdlvOxMo6CtNwF hpY Y p− aL3U
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