Education Policy

Rate of Return of Education in Bangladesh: An investigation

2. Literature review

2.1. Key Findings from Existing Literature

A comprehensive study with a comparative analysis is yet to be conducted to calculate the contribution made by different levels of education (i.e. primary, secondary and tertiary). Adherents of primary school provision argue that the overall ROR of primary provision is higher than secondary and higher education provision. On the other hand, some scholars argue that ROR is always higher for the provision of higher education. Data from virtually every society shows that post-secondary education ensures a higher income and greater opportunities for graduates. Comparison between those who have attended college or university and those who have not attended shows consistent benefit to the degree holder. Even those who attended college or university but without earning a degree are better placed. There are variations between countries, but the pattern holds globally. Alam (2008b) also finds that ROR of higher education is not significant always because of low quality education offered and the nature of the course. Moreover, he also says that currently students are procuring education is for obtaining certificates rather than to know how to do the job. This attitude confirms a lower ROR from higher education provision.

Alam (2008b), using the data of industrialised country context, advocates that investing in child education provides more ROR. However, even though Bangladesh has increased a significant proportion of budgets for early childhood development with an especial focus on pre-primary provision, the ROR is a declining feature (Shahjamal and Nath, 2008; Alam, 2008b). Colin (1999) and World Bank (2002) explore that ROR of Vocational Education and Training (VET) is significant and which is higher than other types of education. Lewin (1993) finds the investment towards VET education is higher than others, but the ROR is comparatively lower.

The above argument generates some interesting questions to consider: does education really provide a significant ROR to the investment made, if not what is the problem(s) within the education. Even in case if it is proved that primary and secondary education contribute less than higher education, there is no way, we can stop operating primary and secondary education as these levels are the basis for higher education. Nevertheless, even if it is found that education in general does not provide a substantial ROR, stopping operation is not a solution, rather we need to discover how, the country can widely be benefited from the education. This research will inform some present status and scenario using following methods. We aim that this will help us in formulating our education policy and its implementation.

2.2. Currently Used Methods of Calculating ROR

According to Colin (1999), the calculation of ROR to education is not possible with the indicators currently used. Many researchers (Harmon and Walker, 1999; Murphy and Welch 1992; Card, 2001; Rouse, 1999; Hartog, et. al,. 1999 and Appleton, 2000), working on ‘Return to Investment in Education’ aim to discover the ratio and equation of total earnings of graduates, and the total investment required to produce [1] graduates. This way of calculating the ROR has been criticized by Psacharopulos and Patrions (2002) and Pritchet (1996). Alam (2008a) says that high salary received by the graduates does not necessarily neither mean that these graduates are comprehensively using their gained knowledge through school in doing the job, nor their works fundamentally contribute towards the development. The calculation of ROR by calculating the difference of earnings of graduates and investment made to make the graduates may work better in the developed countries. These process works because of the relevance of education system with existing work pattern and future action plan and proper taxation provision from earning of the graduates. Alam (2008a) also argues that sometime contrasts of the philosophical aspects of knowledge and different ways of interpreting knowledge between different providers or institutions (Schools, different types of schools, media, and informal institution) also restrict the proper calculation of ROR. An alternative calculation model is yet to be provided by them; however some researchers argue that calculation of ROR must be based on the productivity of workers/graduates once they are in employment. Colin (1999) says that, even though in many cases in-service training does not increase worker income, Bennell (1996) finds that it (in-service training) makes them more productive and therefore it has a significant effect on development. Fagerlind and Saha (1989) argues that in the case of education and training programme, there is a need for a new policy to ensure that employees use gained knowledge in their daily practice. Failure to call on knowledge gained means they lose it and later investment in training will provide a reverse ROR.

Issues related to education pattern of many developing countries and employment patterns give grave concern, which need to be addressing. It is evident that profession-based jobs must be occupied by professional staff trained specifically for them. For example, a ‘medical cadre’ must be occupied exclusively by doctors, but graduates in medicine can work for other cadres [2] (i.e. in administration, policing, foreign affairs, taxation). In addition, obtaining high scores in scientific subjects is easier when compared to the areas of Social Science and the Arts. Thus science graduates, especially doctors and engineers, take advantage of public service examinations. Moreover, every sector, enterprise and organisation (i.e. the army, banking and industry) needs its medical and engineering professionals, and therefore the Public Service Commission in developed countries creates an artificially larger job market for science graduates, specifically for medical and engineering graduates. In addition, the most profitable opportunity for science graduates, especially for doctors, is to enter private practice, either full or part-time. However, we argue that, if science graduates are employed within the public sectors and also busy in working in the private sector, who are to provide the essential support for the enormous number of poor people, dependent on the public services?

The public service examination is a place for competition among Science, Social Science and Arts graduates. Graduates in the same subject do not generally compete against each other to acquire the professional job for which they have been trained. A graduate who has studied Arts or Social Science does not essentially compete with other graduates who have studied the same subject in the public service examination. Is the HE of developing countries able to produce an expert capable of doing the specialized job – or is it producing a graduate with a basic education? A further question arises: do jobs in Arts and Social Science of the public service examination require a person to have a basic education, or to be a specialist?

To have doctors and engineers working in different career areas (those of policing, administration and foreign affairs, for instance) proves that investing in the production of these graduates is ill-advised. We further argue that the earning of a graduate employed in an area for which they are not trained and not proficient, does not constitute an actual ‘return to investment in education’. It also forces the nation to have a society of unemployed trained graduates. It can be seen that investing large amounts of money in the production of science graduates does not make sense if they work in the field of social science or the arts in professional life.  Finally, we need to consider whether education creates jobs, or if education should be provided according to the needs of the job market?

About the author

Goutam Roy

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