The 4 M’s are pretty common in various economic platforms – man, material, machinery, and money. This speaks about various resources. Education, too, is one such resource. Let’s see how
Fundamentals of Economics
Economics is a term that most of us are already familiar with. It is the study concerned with the production, distribution, and consumption of goods and services. Economics studies these aspects at an individual level and beyond, including businesses, governments, and nations, as well. It helps understand the efficiency in production as well as exchange. It also uses various models and assumptions to understand how to create incentives and policies to maximise efficiency. This helps in understanding ways to increase productivity, efficiently use resources, and improve standards of living.
Economics helps us make informed decisions, understand various industries, connect systems from an international perspective, and in general, aims to promote growth. Since it is a study of resources and services, it has a connection to education as well. No, not the study of economics but rather, the economics of education. Tricky? Stay with me; let me explain
Economics of Education
Economics of education, also known as education economics, studies economic issues relating to education. The demand for it, financing, supply, efficiency of various systems, and so on. While not a broadly known subject area, this concept applies economic theories to education as a service.
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For example, let’s look at the picture above. It analyses the resources allotted to the top and bottom 10% financially segregated population. The blue graph (towards the left) shows the bottom 10% and the orange graph (towards the right) shows the top 10%. Although not a recent graph, it gives an idea of how education as a resource is distributed. Particularly, how the distribution seems quite lopsided.
Educational development has seen a lot of changing patterns over time (Read more on the importance of education here). A few studies show that when there is economic development there usually is growth for educational development. Educational development is a powerful tool for growth if used correctly. A well-educated community indicates a community inclined towards employment and sustainable growth. A motive, so to speak, towards accomplishment and figuring out their interests
Does it matter, though? Are there benefits from allocating these resources? Do they have any impact on the bigger picture? Yes, to all of that.
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Education is slowly being recognised as a basic right in various countries. As such, it definitely should be something that strives towards equitable distribution of resources. Various countries have started to see the importance of educational development. As such, educational spending is also increasing.
Economic development looks at basic needs being met. Hence, the focus on education and other such secondary spending is increasing. Moreover, education is also seen as a means to fulfill these basic needs.
Globalization and technological progress has also called for more in-depth studying. This also sees a higher demand for intellectual resources. Usually, the opportunity cost of education is misgauged. A common misconception is that education, when seen as an investment, takes too much time for any real returns. However, education helps an individual to not only keep track of various markets but also identify gaps that they can occupy.
Education plays an important role in development. This is pretty much established. Economics helps us understand markets better and hence, optimise resource utilisation. Applying these concepts of economics to education could mean better opportunities and providing more accessible forms of learning. This also means identifying and accommodating the learning needs of such a diverse audience