Policy Failure in Achieving Universal Basic Education: A Theoretical Analysis

In: The Pakistan development review: PDR, Band 58, Heft 2, S. 135-157

Abstract

Universal attainment of basic education is recognised as a key
development goal; whereas early-age work is considered as a barrier to
achieving this goal. The literature suggests that returns to education
are larger than those of early-age work, and that child-labour results
in long term social loss that reduces human capital. This study
evaluates the argument that earlyage work can itself lead to
accumulation of human capital when it takes the form of apprenticeship
career path. The paper develops a model that allows a rational agent
(parent) to compare the early-age work as apprenticeship career path
with the formal education career and shows that the parents' career
choice for their child will depend on the lifetime earnings of both
careers. The theoretical model is further extended and empirically
tested to check whether benefits of education are higher for all levels
of education. The simulation analysis suggests that for lower level of
education up to Grade-12, the benefits of apprenticeship exceed the net
benefits of education whereas, at Grade-12 and beyond, the net benefits
of education in terms of earnings outstrip the apprenticeship career.
The study implies that early-age work may not necessarily be inefficient
when compared with low levels of schooling and that any intervention
should ensure universal education for all without compromising skill
development of resource poor children. This can be achieved through
making skill development complementary to education. JEL
Classifications: H44, H52, I26, J24 Keywords: Child-labour, Basic
Education, Human Capital, Public Policy