By Koshish Acharya
Note: The analysis is focusing on the education sector in Nepal.
The last decade has seen rising investment in the education sector of the country with massive investment being poured in by the government along with the private sector. Though education is viewed as an important sector in the social arena of the country, the economic outcome of education has not received considerable discussion among the stakeholders in Nepal.
Observing the approach taken by the government and other organizations in the past, it seems that the idea of providing education to the people has been highly influenced by the low literacy rate of the overall population which stands at 68.2 percent. Thought the literacy rate of the population has been improving in the last decade, it has not been able to play a significant role in ensuring higher income levels for the people and consequently enhancing the economic growth of the country. On hand, while the investment environment is declining, economic opportunities are getting low which has been creating a demand shortfall. Adding to that, a large number of students fall out of the formal education annually after failing in major exams such as the SLC and dropping out at other crucial points of formal education. As these students stay out of the education, high paying economic opportunities based on higher skills remain off their reach.
The recent School Leaving Certificate (SLC) 2012 saw one of the lowest pass percentages of only 47.16 in the last 6 years of SLC exams. Similarly the pass percentage of Higher Secondary Exam for grade 11 and 12 was 39.3 and 43.9 percent respectively. Data indicates that 78.4 percent get enrolled in the primary level which drops to 28.2 percent in the secondary level. Therefore, it is no surprise that that 47 percent of the labour forces in the market have never attended school (Labor Force Survey, 2008). In this context, the low level of education in the workforce can be directly associated with their productivity. With low level of skills and trainings, the enterprises hiring this workforce also face the problem of low productivity which in turn effects the overall growth of the market which is reflected in the economic growth of the country.
Therefore, this scenario of low productivity and education not being able to contribute a better life for the people roots back to the priority set by the government in delivering education. With a total of around 450 billion rupees being invested in the education sector in the last decade, budget allocation to the education sector has doubled in past four years reaching Rs 63.91 billion in 2011/12 from Rs 27.06 billion in 2007/08. However, an interesting analysis is that, as the government expenditure has increased, the focus has remained in the primary and secondary education of the students (possibly to improve the scenario of literacy rates). However, it is high time to consider giving significant attention towards the dropouts and the uneducated human resource already in the market for a couple of reasons. To being with, a study conducted by The Sutton Trust on Education Mobility in England- The link between the education levels of parents and the educational outcomes of teenagers in their findings conclude that children of educated parents have a higher chance of doing well in school. Hence, if we focus on helping the drop outs that are a part of work force attain higher level of education and skills while still being in the job market through other non-formal and informal means, not only it will help them raise their income levels, but it will also help prevent drop outs of their children. As the Living Standard Survey 2010/11 also indicates that the main reason for the population aged 6 years and above for not attending school as the lack of willingness in parents (14.5%) , need to help at home (13.5%) and other various reasons like education being expensive and others, helping the drop out work force attain higher education while still being in the job market may help ease these problems This information provides us with ample ground to invest in educating the already employed uneducated workforce. This would help in attaining a higher literacy rate in the long run because of the fact that if the uneducated workforce are able to increase their income, they will be able to afford to send their children to good schools. This might also free the government from investing heavily on the primary and secondary education and preventing drop outs in the long run.
Having said this, the current situation cannot be ignored where the government has been providing free basic education to a large number of students although with a low rate of return. Out of the total population currently enrolled in school/college, 71.9 percent attend community/government school/colleges, 26.8 percent attend institutional/private school/colleges and 1.2 percent attended other school/colleges. However, though the students appearing for SLC is dominated by public school with 77 percent involvement in this years SLC, the success rate is low with only 36.49 percent. On the other hand the role private schools in producing SLC graduate has been outstanding with 84 percent success rate with only 23 percent of the students appearing from private schools. Hence, the prime question is what can be done to help students from public schools receive better education. Apparently, more expenditure is not the answer.
The answer lies in the focusing on returns on the expenditure and making it effective so that the expected beneficiaries i.e. students receive the expected benefits of the expenditure. With 80 percent of the education budget being used in salaries and operation, combined with low incentives for the teachers and management to perform, students suffer as demonstrated by the SLC pass rates presented above. Therefore, the gaps in utilizing the allocated funds remain apparent. In this scenario, the answer could be the introduction of education voucher, which in simple words is funding the students rather than the machinery of bureaucracy involved in education which has remained in an underperforming stage. In this system, a voucher is provided to the students/parents that can only be used for getting enrollment in the school of their choice. The choice enables the students to choose according to their need and would also initiate competition among school to acquire the voucher which can be later cashed.
In this way, a dual approach whereby children and the adults both get equal priority while making education plans and programs, address the current gaps. This will not only help increase literacy rate, but will also contribute in raising the income level of adult population subsequently contributing to the overall economic growth. Implementing this approach with focus on these two areas would mean that the students would still be getting free education but the public spending would be more effective and also the living standard and income level of the workforce would be on an increasing mode leading to a level where they are able to finance their childrens education themselves, lowering the burden to the society and the government in the long run.