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Social Science Research Problem

"PIPA Policy Work Wonder Worker Bees"

From: Robert Lloyd, PIPA Executive Director Joshua

USAID foreign aid grant, education, and development

The standard of living of people and their per capital income are steadily increasing globally. Many factors contribute to the increase in the higher income, and these factors include education, globalization, and economic stability across countries. However, there is a positive correlation between higher earning and level of education. Education is defined as a formal learning that assists individuals to acquire knowledge, and skills to improve their standard of living and make them becoming useful members of society. Education is a critical tool to improve performances of individuals. On the other hand, income is defined as amount of money that individuals can make at a regular basis. Typically, income levels depend on the level of skills and knowledge that an individual has acquired over the years. Education is a critical tool that can assist people to acquire necessary skills and competencies in order to receive a regular income. Typically, education is very effective in fighting poverty, and education opens doors to different opportunities nationally and globally. People with a minimum level of education are able to secure good jobs and run a successful business that translate in higher standard of living. For example, people with secondary education or university education are likely to receive high incomes that can make them enjoying high standard of living. Skill development is very vital in reducing inequality, unemployment, and poverty. Skill development is a critical tool for enhancement of economic growth. Every $1 spent on education is able to generate between $10 and $15 in economic growth. (UNSCO, 2013) Education stimulates economic growth and reduces poverty within a country. Typically, quality education accumulates people's skills, knowledge and self-reliance needed to expand employment opportunities and increase income.

"Education is a key way of tackling poverty for women, and makes it more likely for them not just to be employed, but also to hold jobs that are more secure and provide good working conditions and decent pay." (UNESCO, 2014 p 25).

Many countries have realized the urgent needs to develop skills of a general population to enhance economic growth. A country that focuses on people's prosperity in a rapid global changing economy should pay a greater attention to the development of skilled workforce through educational attainment in order to assist them preparing fully for the national and global economy.

Despite the benefits of education towards economic growth, there is an argument centered on whether foreign aids for both primary and secondary educational programs can contribute to an increase in economic growth and income level. Within the last few years, some group of people have criticized a correlation between level of education and GNP per capita. The argument is that many low income countries receive foreign aids for primary and secondary education, yet these countries lag behind economically. On the other hand, some people believe that countries with higher number of people in secondary and tertiary institutions have recorded higher GNP capita level. Thus, many scholars believe that investment in education can lead to higher income level for a country. (Bloom, Canning, & Chan, 2006).

The report generates the following hypothesis to enhance a greater understanding whether more education can generate more income levels for a country.

H1: Increase in the educational levels of people contributes to higher income and GNP per capita of a country.

Ho: Increase in the Educational levels of people does not contribute to higher income and GNP per capita of a country.

The report tests the hypothesis by collecting data from World Bank. To test the hypothesis, the report demonstrates that if level of education is correlated to higher income, countries with higher level of education enrollment are likely to record high GNP per capital. In the contemporary educational environment, primary school education is a basic education and perquisite to secondary education, however, people with primary school education cannot be categorized as being educated. In essence, the number of people enrolled in a primary education will affect the number of enrollment in secondary education. Increase in the number of people in primary education enrollment will increase the number of secondary school enrollment. Thus, secondary education can make people to acquire skills and competencies to contribute meaningfully into the economy.

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On the other hand, tertiary education prepares individuals to integrate in a complex business world. People with tertiary education are likely to deliver a meaningful contribution to a country economic development.

The report establishes relevancy of primary education enrollment to secondary education enrolment. Moreover, the study establishes the correlation between the percentages of secondary school enrollment to GNP per capital level in a respective country. The essence of the report is to establish that how level of education contributes to GNP per capita of a country.

Data Presentation

The report accesses World Bank Database to collect data on enrollment ratio and net enrollment ratio of relevant age group in primary, secondary and tertiary education between 1980 and 1997. Moreover, the report collects data of all countries income level, and the data consist of primary and secondary education enrollment for low-income countries, lower middle countries, upper middle and high-income countries. However, the report excludes India and China from the analysis because these two countries consist of one-third of all people in the planet. Including them in the data collected can distort the analysis. The data on Gross National Product of all countries reveals the average percentage annual growth between 1997 and 1998. Based on the data collected, estimated GNP per capita income for low-income countries was $760 or less. The GNP per capita of lower-middle income country was between $761 and $3,030. Estimated GNP per capita of middle-income country was between $3,031 and $9,360. However, estimated GNP per capita for high-income country was $9,361 or more.

Analysis

The deleted countries from the list of countries are

"Angola, Bangladesh, Bolivia, Guinea Bissau Haiti, Honduras, Bosnia & Herzegovina, Burkina Faso, Central African Republic, Cuba, Ghana, Iraq, Jamaica, Korea, Dem. Rep. Kuwait, Libya, Myanmar, Omar, Pakistan, Puerto Rico, Rwanda, Sierra Leone, Turkmenistan, Ukraine, West Bank and Gaza and Yugoslavia, FR." (World Bank, 1998).

Major reason for deleting these countries from the analysis is that they do not have data of either GNP or data on primary or secondary education.

The relationships between primary education enrolment and GNP per capital of low income, middle and high-income country reveals that education at primary level does not have a tangible effect on the income level of country. As being revealed Fig 1, a small difference in percentage enrollment in primary school level has a great difference in the income of various countries.

Fig 1: GNP vs. Primary Enrollment

For example, Madagascar recorded enrolment of 92 at the primary level in 1997 with income of $260. However, Denmark recorded 103 for the primary school enrolment, yet the country recorded $33, 040 in the same year. The data revealed that there was a small difference of primary school enrolment between Madagascar and Denmark yet Denmark recorded very high GNP per capital than Madagascar . Another significant comparison is between Nepal and Norway as being revealed in Table 1. Nepal recorded 113 enrolment at primary education; however, the GNP of the country is $210. On the other hand, Norway recorded 100 at primary level, yet, the GNP of the country is $34,310. Based on the data collected on the primary education enrollment and GNP per capita of all countries, it is revealed from the graphical illustration that the primary education does not have a positive correlation on the GNP per capita of a country. Thus, the report argues that the impact of primary education is to prepare people for secondary education since the graph reveals that there is no direct relationship between primary school enrollment and GNP per capital. Increase in the primary school enrollment does not have impact on the GNP per capital of a country.

Considering the relationships between GNP per capital and secondary education, it is revealed that there is indeed a correlation between secondary education and GNP per capita of a country. The Figure 2 establishes that there are indeed relationships between percentage of secondary education enrollment and the GNP per capital level of a country. Based on the data in Table 1, the enrollment of Secondary education for Ethiopia is 12 and GNP per capital was $100. However, Austria recorded 103 for the secondary school enrolment, and its GNP per capital was $26,830.

Fig 2: GNP vs. Secondary Education

Table 1: Country

Per Capital GNP $(1998).....

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