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ECONOMICS OF 21ST CENTURY EDUCATION SYSTEM

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By Atef Ahsan

A CONSUMER PERSPECTIVE

Knowledge is power; a phrase that seems to pop up in varying contexts, various forms of direct and indirect expressions; to the extent of it being deemed an overused cliché. Yet, the question remains. Why should one pursue the attainment of knowledge and does it really pay off? A difficult question that the fiscal budget committee has to face annually; funding on education. It’s met with a lot of blunt remarks from the stakeholders of education, as they systematically dissect the numbers published by the ministry of planning education. Teaching and learning are seen as a core driver for economic development. The concept stresses the impact of preparing a child with necessary skill sets over a period of 15 years of education of various levels. The result, creating an able-minded and learned citizen that can contribute to the society positively, through the utilization of his knowledge in a respectable field. The education construct is of no doubt, significant. Yet, its application in the coming years has become distorted. The emergence of ideas of finding monetary returns, along with attaching personal and political agendas, seems to have put the participants at the end of the losing battle.

Why funnel in large sums of cash for universal public education? Why not let profit-seeking businesses handle it? Many argue that if education was ever entirely privatized, it’s likely that some children will be excluded; and that would make the society, as a whole, worse off. Education, is a positive externality – a benefit that is enjoyed by a third-party as a result of an economic transaction. Education acts as a resourceful medium to generate income of the gathered knowledge. It also benefits society as these individuals create art, invent new technology, and cure diseases and so on. More education increases productivity, GDP and standards of living. Many governments such as that of the United States, pay for the primary and secondary public education, and heavily subsidizes college/university. Despite all that spending, the U.S. had some serious problems with their education system – one of the biggest is inequality. The historical trend shows direct linkages between low earning households and the subsequent low earning child from that household.

The Structure of the Education System
The overseeing of the Education System is primarily conducted by two ministries; Ministry of Education (MoE) and Ministry of Primary and Mass Education division. The strata of higher education (along with post primary & secondary) is undertaken by the Ministry of Education. Amongst the other autonomous bodies overseeing the other education strata, there are several supervisory bodies operating directly under the Ministry of Education. The supervision of public and private universities are overseen by the University Grants Commission (UGC).

Clogs of the 21st century learning gap
Bangladesh and its governing body have put in efforts to develop the education system. The country has achieved some development landmarks (primary, girls). Yet, it also seems to have fallen victim to the stringent loop of monetizing education. The governing body has worked towards the development of prospective universities. The trend can be observed clearly in the case of private universities. As per (UGC), there are 80 operating private universities in Bangladesh. The issue here lies in the generic downfall of standard. More institutions are operating as to provide learning, irrespective of proper quality maintenance. The consumers of their services are paying reasonable money to attain the service. However, the return on this investment is largely uncertain. This is because, these emerging institutions are acting on an incentive. Quality in terms of teachers, facilities, learning environment, are being sacrificed at the altar of monetary gain. The market is seen to be operating under profit maximization. Public universities, on the other hand, offer subsidized fees, yet many students (English) opt out of it. As per the notion that they operate under is a muddle of inefficiencies, low standards and dirty policies.

Another concern is towards the categories of subjects offered. The trend is strong towards the degree of BBA, considered stable and relatively an easier option. Why so? As the chances of job opportunities are strong, or so it is assumed. If the culture of learning is predominantly income based, then we as a nation are opting to sacrifice elements of social and cognitive development, which proper education brings about.

For some economists, the best way to level the ‘playing field’ is to focus on funding. They argue that the government should pay for early education programs; and provide extra money for disadvantaged or low income students. For others, the answer isn’t just about more funding, but it’s about having more competition. Some economists support Charter schools and voucher-programs that allow parents to pick schools – or open a role among the school districts. In theory, these educational institutions face the overarching pressure of possibly losing their funding if they fail to meet the mark. Additionally, other economists focus on the teachers and argue that they should be incentivized to improve student performance. Each of these ideas have been implemented in many countries (like the U.S.), with varying success. Although, the search for the ‘magic formula’ is yet to lead to discovery, it is clear that the first step towards promoting equality, is to invest in primary and secondary education. But what about higher education? Is that a good investment? There are many reasons (not all of them economic), to go to college and to be educated in general. People go to college because they enjoy learning and want to know more; or maybe they want to put off getting a real job. However, in economics, the focus is on financial benefits. Irrespective, the point stays that college graduates do earn more than their lesser credential counterparts. Economists call this the ‘college wage premium’. Also, the unemployment rate of college/university graduates is lower than that of high school graduates.

The people who graduate from colleges are not a randomly selected group. All other points aside, it requires a degree of aptitude and discipline for students to make it to college level education. Second, students have to receive a fairly good secondary and primary education to be able to keep up with university work. Third, the students who attend college/university are more likely to come from well-off families, with educated parents who have the time and energy to help encourage their (students) success. So when comparing higher education, with primary and secondary education, there is often a comparison between people with advantaged backgrounds to people without any of those advantages.

Economics of Higher Education
Economists point out the two main explanations of why higher education background students earn more. First, is the human capital theory; the idea that going to college actually teaches students skills that will help them get a higher income job. The second theory is called signaling; this is the idea that some students have shown that they are smart and hard-working. When entering the job market, the university/college degree sends a clear signal of the individual’s skills and experience. Many employers would prefer an applicant who has an actual university degree, over one that has the equivalent of a self-taught education. But a degree is not only about signaling ability.

So, there are significant financial benefits to completing college; But what about the costs of going to college? The reasons are not entirely higher tuitions in college. In fact, some students with good SAT scores and a good high school result may receive scholarships and funding. More so, it is also possible that student-debts are rising because graduate school enrollment is rising. Graduate students thereby, borrow more than undergraduate students. Another reason why tuitions in higher education are rising (or higher) is because the actual cost of running a university is higher than what it used to be decades ago.

As some schools compete for students and their money, some universities build luxurious campuses, attractive student activities and cafeterias, to attract revenue. Another possibility is that universities now employ more administrators, professors, and lecturers; and they are paid quite a large amount. Now, what about the students who don’t have the means, or inclination to get a 4-year university degree? Better money can be found in careers that require specific training and skills. So in the end, the question remains – is higher education or college even worth it? Well, it depends. It depends on where you go to school, how much you pay for your degree and what degree you get; and of course, what you want to do with your life. Education is not just another thing that people buy. It isn’t only about individual gain; there is a social aspect too.

Take Home: Finland’s take on effective learning
World Summit for Innovation in Education (WISE) studied the aspects of the system of education adopted in the primary and secondary schools in Finland. Their study concludes that the country stands as one of the leaders in teaching and student learning experience. Their success story comes from their attempts to modernize and change the generic methodologies of schooling. An interesting notion that they put forward is of the schooling hours. Their primary and secondary students spend about 3 hours/day at schools and a total of 20 hours/week. Why so? The teachers believe that these young learners need to be able to spend their time exploring their own environments and develop their own individual interests. Long schooling hours tend to be mentally and physically stressful; leading to the general depletion of any drive to explore.

On the other hand, most schools have adopted to reduce or even remove the concept of homework. This might come as a shock to most people, the majority of students are always knee deep in pending school work. These teachers believe that learning has to be about being curious. They ask that they follow the curriculum at school, but in their free time, follow and learn whatever interests them.

A recommendation from the Finnish teachers is to remove or reform the notion of standardized tests. The system of education, then, puts pressure on the institutions, and the institutions inadvertently pass it on to the students. The curriculum is developed on the basis of standardized tests and the teachers aim to solely prepare the students for that. A large scale effect is linking student test scores to their net-worth. More so, society values the success of an individual based on that same score. Yet, the worst one of them all – the individual derives their own net worth on that same basis; as if a test score can ever tell your degree of intellect.

We as individuals are a product of the environment that we grow up in; education is a crucial segment of it. Yet, education without effective learning is like reading a book without knowing how to read; it’s essentially a waste of resources. Learning is a journey of a lifetime, it’s the way we grow. We are a product of our experiences and surroundings, learning gives us the tools to make sense of our surroundings. The academic life of students is a pivotal moment that at times greatly shape our coming future. If students are able to grasp the key tools, they themselves can be their own teacher of their own journey.

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