Source : BANBAIES & WORLD BANK
Revenue Budget
(Budget is given on crore taka)
Revenue budget is allotted to meet the current expenses like payment of teachers, funding of food program, stipend, text book etc of education. It is hovering at 10%. As numbers of students are increasing with increase of population so to upgrade the value governments needs to increase spending at this sector
Sub-Sector wise Last 5 years Development Budget Allocation (In crore Taka; 1 Crore = 10 Million)
Government budget expenditure Comparison with different sector
Comparison among Bangladesh, India, Nepal and Sri Lanka
Public financing of education has been a priority for governments in developing countries for several decades. This is because education is perceived in modern societies as an important pillar of socioeconomic development. However, in recent years, the education sector has faced stronger competition from other sectors also seeking financial government support. Given the limited resources governments can generate from taxes and other sources of revenue, there has been a strong push for improvement in the ways in which revenues are allocated among different sectors, leading to stronger efforts to improve public expenditure policy. The budget is the means by which governments, in general, allocate resources to education, and therefore any improvement in the management of these resources will require improvement in governmental budget processes. Bangladesh, Nepal and Sri Lanka are among the developing countries in South Asia trying to improve the development of their education systems through better public financing of schools.
Compare to the literacy rate among Sri Lanka, Nepal and India, Bangladesh is lagging behind from these countries.
Education Expenditure
Literacy Rate of Male and Female
Bangladesh spends relatively little on primary education compared to other countries. In 2002 India and Nepal spent 1.4% and 1.3% of national income on primary education respectively, more than double the percentage spent in Bangladesh in the same year .
The percentage of government expenditure allocated to education in Nepal is relatively high in comparison with other developing countries: it is higher than India (by 3 percent) Sri Lanka (10 percent), Bangladesh (11 percent).
Education-from viewpoint of welfare economics
Education is one of the most important item in government budget in Bangladesh..In Bangladesh 2.4% of GDP or 14.6% of total public expenditure is spending on education budget. Here the question arise that: why does the government involve itself so extensively in education, rather than leave its provision to the market? Market does not provide goods efficiently when those goods are public goods, they give rise to externalities, or they are provided monopolistically. Education is primarily a public goods, improving student’s welfare by enhancing their ability to earn a living and more generally to deal with life. Where transportation cost is so high , local schools have an element of monopoly power , but this argument is not very persuasive , except perhaps in rural areas. Education are concerned with economic efficiency because access to education is arguably an important source of social mobility, it is an important good to be made available to all citizens which is called commodity egalitarianism. Because education gives rise to public goods, it follows that government may wish to subsidize it. Here is the question is that: what is so special about education that leads the government not only to provide it but also to produce it as well?
The reasons behind government provide education as a public goods:
- Schools can be a powerful force for socialization.
- The very spring and root of honesty and virtue lie in good education.
- In democratic government, education gives voters background and perspective on which to base their political choices.
- In proportion as the structure of government gives force to public opinion, it is essential that public opinion should be enlightened.
- Education provides an avenue for political indoctrination that makes citizens more accepting of their governments, thus contributing to political stability.
- Increase social mobility.
- Public education produces human capital while simultaneously inculcating belief in existing political system.
Externality effect is the third party or spillover effect which is not considered by market. Externality effect can be positive or negative. Government financing of education has positive externality effect. Bangladesh government spends millions of TK for making education compulsory for everyone. It has direct effect on the nation as well as some positive externality effect. The positive externality effects of education in Bangladesh are given bellow:-
- Education not only increases an individual’s earning capacity but also reduces crime and contributes to the literate and well informed populace that is necessary for a smoothly functioning modern democracy.
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Education increase productivity. A well-educated labor force can increase efficiency and produce other important external benefits, such as lower unemployment and greater international competitiveness. Policy makers are realizing the increased returns from investing in human capital and the beneficial impact it can have on the supply-side of the economy
- Higher education leads to increased GDP (economic growth) and lower crime rates.
- In Bangladesh girl’s education increases women empowerment & helps to establish their status in the society.
- In Bangladesh there is lots of superstation in the society. Education can reduce this by broadening the outlook of society and can increase social mobility.
- Education increases knowledge, broadening outlooks which reduces social rigidness like decrease gender biasedness, dowry, inter household conflicts etc.
- Educated workforce is vital for the creation and adoption of new technologies.
- Education increases civic engagement and thereby contributes to a stable and democratic society.
- Direct and indirect effects of a maternal and child health program in rural Bangladesh.
- Can compete internationally in different affairs.
- Can choose better government. Education provides an avenue for political indoctrination that makes citizens more accepting of their governments , thus contributing to political stability
Relationship between education & income level
Education is the factor which can change income level of people. and when income level increases peoples life living index also becomes better, child education, mortality rate, maternal health, nutrition increases , while child marriage, women repression, polygamy, women empowerment also increases, Which brings overall socio-economic development.
Studies by the US Census Bureau and many other agencies have consistently shown that people with a higher level of education make more money than those with less education. For example, the US Census Bureau issued data in July of 2002 that shows the following:
Education and Annual Income
It has also been shown that this higher level of annual earnings translates into significant increases in overall lifetime earnings. The US Bureau of Labor Statistics data from 2001 show the following:
Education and Lifetime Income
Higher levels of education payoff in lifetime income in a big way. The US Bureau of Labor Statistics has also shown that the unemployment rate steadily drops with higher levels of education. Unemployment for non-high school graduates was 6.5% in 2000, 3.5% for high school graduates, and 2.3% for those with an associate degree.
This is an universal picture applicable for all country all over the world. Our country is not on different window on this sector. Thus education makes a difference.
Education is strongly related with rise in income level. Here This scatter diagram shows a few things about the relationship between two variables. The percent of people with Bachelor's degrees is treated as the explanatory variable, while the personal income is treated as the response variable. By looking at the graph, it is evident that the two variables have a positive association, that is, when one value increases, the other also increases. The points also seem to resemble a line, showing a possible linear relation.
So when education level increases peoples income also increases. When peoples income increases it also bring change in literacy, life living index, children nutrition, maternal health, women empowerment & reduces polygamy, child labor, child marriage, women violence etc. At a word it brings overall socio-economic development.
Does education reduce poverty in rural Bangladesh?
Poverty is a cause of a lack of education, as well as an effect. If we find answer these questions- Is education contributing to poverty reduction in rural homes in Bangladesh? What impact does poverty have on enrolment rates in primary and secondary school? W can get this-
It is beyond doubt that education contributes to social and economic development in society. Moreover, in the search for strategies to reduce poverty, it has been established that education and literacy are crucial for improving the lives of people living in poverty. Education helps to alleviate poverty by affecting labor productivity and via other paths of social benefit. It is therefore a vital development goal.
The Programme for Research on Chronic Poverty, in Bangladesh, and the Chronic Poverty Research Centre, in the UK, examine whether education contributes to poverty reduction in rural homes in Bangladesh. They also look at the potential for poverty reduction through better employment opportunities.
Using data from a school-level survey and a household survey, the study investigates children’s access to primary and secondary school by assessing at the impact of different levels of poverty on enrolment rates. It also considers the link between school quality and poverty.
The study finds that:
- Primary and secondary school enrolment rates are lower among children from poor households, with differences increasing at the level of Secondary School Certificate (SSC) completion.
- As education has an inter-generational impact on schooling, future generations will be affected by the link between poverty and education.
- Poverty has a negative impact on school enrolment: there is a lack of motivation to send children to school, due to high unemployment and few opportunities for salaried employment with less than a SSC-level education. Parents are also unable to pay for education.
- The weaker performance of children living in poverty (with regard to dropping out of school and not completing SSC), has, in part, been due to the poorer quality of their schools.
- Distance to high school has no significant impact on enrolment.
- More girls enroll at secondary level than boys, but their completion levels at SSC level are much lower, due to their lack of employment opportunities.
- Children drop out because they dislike school, are not doing well and lack intelligence for studying. This implies that children are not learning interesting, useful and relevant information.
On the basis of the findings, researchers recommend that policies to counteract the negative impact of poverty must be pursued urgently:
- Poorer children should be targeted by stipend and other education support programmes.
- Support for primary education must be given to the children of the poorest 20 to 25 percent of households.
- The poorest 50 percent of households must be prioritized for support at secondary school level. Both boys and girls deserve this support.
In addition:
- As a priority, jobs must be created for young people with a secondary education.
- In the medium term, infrastructure and industry policies should target rural areas.
- Plans should be adopted for special courses offering training skills to young people who complete any level of secondary school.
- The performance of students living in poverty can be improved without significant changes being made in terms of location of schools and number of teachers.
- Policies to motivate girls to complete SSC should change the secondary-level stipend for girls to partly cover examination fees, and place a condition on schools that a certain proportion of secondary-level girls who receive a stipend must sit and pass the SSC.
- The learning process must change to ensure that children do well in their studies, move up through the classes and find school learning interesting. Well-planned and long-term strategies must be implemented in phases. Policies and programmes in this direction must begin now.
Crowding out Effect in Education:
To overcome market failures due to externalities or lack of an effective credit market, countries often try to improve access to education by providing more public school places. However, if there is already an active private sector, then some of the public expansion may draw away students who may have gone to school anyway. This would attenuate any efficiency gains.
For a pure public good, government and private sources are perfect substitutes, one completely crowding out the other. Increased government expenditures displace private giving. Potential crowding out is examined across four levels: Doctoral, master, bachelor and two year degree granting colleges and universities.
Annual private and public spending in basic education (constant 2006/07 prices)
This table shows that in most cases private spending tends to narrow differences in spending per student in the different school types. For example, government spends 3-4 times as much on government primary and secondary schools students compared to students in registered non-government schools. Private spending differences between the school types are much smaller and imply that total spending per student (both public and private) is only twice as high in government primary and secondary schools. However, even though the differentials decrease once private spending is included they remain large.
Primary education outcome indicators
This table shows that only 60% of children that enroll in Class 1 reach the final grade of primary school. This implies that at least 40% of primary school entrants fail to complete primary education and to achieve even basic literacy. It is also important to note that survival rates differ across school types; government schools are more successful at retaining their students than non-government schools.
Secondary education outcome indicators
Here also the same result: government schools are more successful at retaining their students than non-government schools.
It is seen above the information that though private spending is larger than public spending but government outcome is better than private one.
Sequential Effect of Education
A higher educated workforce has a higher productivity. Individual earnings are strongly related to educational attainment. People who have completed high school earn more than those who have not; people with a bachelor’s degree earn more than those with only a high school diploma; and those with a graduate education earn more than those with only an undergraduate education. It has a far reaching effect. If an uneducated community get education what will be the sequential benefit we can see from following chart-
BD government makes education compulsory for everyone. Bangladesh government also takes the goal that up to 2021 every citizen will be literate. To fulfill this goal they take lots of activities in last two years
Cost benefit analysis
Findings
By- Harvey S. Rosen
- Economics of the public sector
By-Joseph E. Stiglitz
- Ministry of education
- Ministry of finance
- Wikipedia
- Economic review
- Bangladesh bureau of statistics
by
kaniz_fatema (student)
