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ECONOMICAL FACTORS AFFECTING EDUCATIONAL PLANNING IN SUPERVISION AND PLANNING
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ECONOMICAL FACTORS AFFECTING EDUCATIONAL
PLANNING BY QURAT-UL-AIN NAEEM, UOK.
Index
i. Introduction 1
ii. Economic Factors 1
iii. Educational Planning 1
iv. Economical Factor in Education Planning 2
v. Basic Economical Concept in Educational Planning 3
vi. Applications of the Concepts to Educational Planning 5
vii. Importance of Economic in Educational Planning 5
viii. Some Characteristics of Education in Economic Analysis 7
ix. Weaknesses in the Economical Factor Influence 9
x. Economical Statistics Analysis in Educational Planning 9
xi. Related Researches 9
xii. Conclusion 10
xiii. Bibliography 11
1. INTRODUCTION Education economists analyze both what determines or creates education and what impact
education has on individuals and the societies and economies in which they live. Historically at
the World Bank a great deal of emphasis has been placed on determining outcomes to
educational investment and the creation of human capital. The primary mission of the economics
of education group is to identify opportunities for improved efficiency, equity, and quality of
education and promote effective education reform processes; to help improve, knowledge of
what drives education outcomes and results; to better understanding how to strengthen the links
of education systems with the labor market; and to build and support a network of education
economists and build bridges to all those who are interested in their work.
2. ECONOMIC FACTORS Stability of the economy across the globe, and trends such as consumer behavior, general
taxation issues, interest and exchange rates all impact upon every sector of society and education
is no exception.
According to JISC info Net (JISC info Net 2009),
“Economic factors are likely to include: funding mechanisms and streams;
business and enterprise directives; internal funding models; budgetary
restrictions; and income generation targets”.
The PESTLE investigation revealed that the current economic recession, together with increasing
consumerisation and international markets were the principal economic factors affecting the
educational sector.
3. EDUCATIONAL PLANNING
Educational planning is an activity which demands the deployment of many diverse skills. It
calls for the services of administrative officials, academic educationists and practicing teachers,
economists, sociologists and statisticians and many other kinds of specialist. The value, the
feasibility and the ultimate success of any education plan will depend largely on the team spirit
displayed by the planners. Educational planning is an activity which demands the deployment of
many diverse skills. It calls for the services of administrative officials, academic educationists
and practicing teachers, economists, sociologists and statisticians and many other kinds of
specialist. The value, the feasibility and the ultimate success of any education plan will depend
largely on the team spirit displayed by the planners.
4. ECONOMICAL FACTOR IN EDUCATION PLANNING
Why does educational planning require any study of economics? Without meaning
to suggest that other subjects don't have relevance for educational planning’s it
must nevertheless be said that without at least some familiarity with economics it is
very difficult to plan education. Certainly one can plan much better knowing
something about economic concepts and techniques. Planning of any kind is
basically the endeavor to work out how to achieve the maximum possible with the
resources available. Fundamentally, economics is the study of how people and
perhaps more important for our purposes society. Choose to allocate the resources
at its disposal in order to achieve its chosen objectives. The important point in
common between these two descriptions of planning and economics is that in both
cases we talk about using limited resources to achieve certain objectives. This
obviously has the implication that there is something fundamental to both, and we
shall see how any kind of planning is only an especially disciplined example of
economic behavior. As there are unsatisfied objectives it is necessary to make such
choices which are economic in character in order to achieve as far as possible the
desired objectives. This economic characteristic of behavior applies not just to
financial matters but to all kinds of everyday behavior. The basic point here is that
economics is about scarcity and the implications of this fact of scarcity for our
everyday behavior. The various reasons why government is interested in spending
money on education are well-known. There is public demand to be satisfied, there
is the need of the economy for skilled and qualified manpower, and there is a built-
in momentum of the educational system itself, such that once it is established it has
to be maintained, All of this is true and it provides a powerful set of reasons for
spending money on education Within the educational system choices have to be
made in the first place between spending more on primary education and less on
secondary or perhaps more on higher education, This is an economies choice
because, for example it is more expensive to expand secondary education by a
given amount than it is to similarly expand primary education. Secondary
education needs better qualified teachers so they have to be paid higher wages or
since more equipment is needed in a secondary school than in a primary school?
The school becomes more expensive. Also the educational system itself has certain
built-in limitations. Thus secondary education can only be expanded as fast as
additional teachers can be provided for it and of course there is limited capacity for
teacher training, Here again another economic element comes into decision
making. However it is not only economic factors which affect this decision-
making. There is very strong public interest in education and the public may want
certain kinds of education and be perhaps less interested in others so this has to be
taken into account in making decisions on how to develop the educational system.
Similarly, once educational facilities are in operation they usually have to be kept
in operation and this necessitates restricting part of the resources allowed for
education to maintaining what already exists, therefore there is less available for
future expansion and this in turn is another limitation on the freedom of decision,
on the economic choices
This comes down to recognizing that although it is not only economic influences
which affect our educational choices all these decisions on education these
planning decisions, partake of the basic characteristic of economics namely, the
need to make choices within the limitations of scarce resources, Thus it can be said
that planning is only a specially disciplined type of economic decision where we
have particular objectives in mind.
5. BASIC ECONOMICAL CONCEPT IN EDUCATIONAL PLANNING
The basic point is to show how economics is primarily interested in studying the question how
we can make better use of the resources available in education and also to recognize that
planning is a particular technique for carrying this out, we begin to examine some of the
fundamental economic concepts which are relevant to the problem of making choices when we
try to behave economically. In particular we are going to look at savings and investment and also
we shall have occasion to refer to the concepts of production and consumption.
InvestmentIn economics investment refers only to net capital formation, i.e. the act of increasing of the
community stock of productive capacity. Thus an important aspect of investment is that it always
involves some kind of innovation In the case of government the motives for educational
investment may be somewhat more obscure and diverse. For example, much of government
investment is in developing educational services. These do not produce a physical product to be
sold in the market, but they can contribute to the productive capacity of the community, e.g.
education expenditure potentially increases the skill of the labor force. This can help the
economic policies of the government and in turn improve its political position so we can see that
there is a wide variety of possible motives for the government to choose to invest in educational
system.
SavingThe concept of saving has a restricted meaning in economics by which it excludes hoarding and
simply postponing consumption. We only count as saving that which involves withholding from
current consumption in order to have more future consumption. In this case of educational sector
there is an obvious motive for such saving relating to the motives we have referred to in their
choosing to invest for increased future profits.
Consumption
The concepts of consumption and production since these also have some importance in
educational planning. Consumption is a term about which not much needs to be said because
economists use the term consumption in much the same way as it is used in everyday
conversation, Consumption simply represents the disposal of the rest of income apart from that
which is saved, It is important to note that hoarding is included In consumption since hoarding is
only delaying the purchase of goods and services for current satisfaction, as explained earlier.
ProductionProduction in the economic sense is the total output of goods and services resulting from
previous investment. Taking example of this complexity from education, one of the objectives of
the educational system is to produce trained teachers who can hence be regarded as part of the
output of the educational system. But trained teachers are also a very important input in the
educational system because they help in the production of the qualified school leavers who are
another important output of the educational system. The point to be made here is that it is
comparatively easy to assess the gross production of a country but it is much more difficult to
calculate the net production, since this involves excluding all products which are used in further
production as investments, because to establish net production it is only necessary to count the
value added at each stage of production.
6. APPLICATIONS OF THE CONCEPTS TO EDUCATIONAL PLANNING
Among the economic considerations of most importance for the preparation of an education plan,
are the following: Gross national and per capita income, by major economic sectors; Government
income and expenditure at all levels, showing sources of revenue and types of expenditure;
Retail price and other economic indices; Rate of production growth for the economy as a whole,
for the main economic sectors, and if possible, for different branches of activity; and by sectors
and branches; labor and trained personnel; personnel requirements and openings for employment
by levels of education. Volume of public and private investment, in total Manpower resources:
shortage or surplus of The foregoing data should be supplemented by a study of the objectives
and rate of execution of the national plan for economic and social development, and analyses of
selected special studies carried out for the purposes of economic planning which may provide the
answers to many of the considerations listed. Though close co-operation between economists,
educationists and sociologists is certainly desirable and productive at all stages of planning, this
is undoubtedly one of the phases at which it is most necessary, and mutual consultation,
discussion and exchanges of information should be arranged so that, when the time comes to
work out the answers, the necessary agreement can be achieved with relative ease.
7. IMPORTANCE OF ECONOMIC IN EDUCATIONAL PLANNING
Education can be treated as both consumption and investment if considered from the individual's
point of view. When someone receives education it fits him in a wide variety of ways for what
can be called to use the simplest term a better life. He has greater access to culture, he can read
newspapers and so on, and this represents an increase in his consumption possibilities. But also
from this individual's point of view such education is an investment in that it provides him with
better qualifications for employment or better capacity to absorb further training. In this way he
can develop his future earning capacity and potentially his living standards as well. This is
considering education only from the individual recipient’s viewpoint, but investment in
educational development is also very important from the national point of view for economic
growth, mainly because of the possibility offered of increasing the supply of qualified
manpower.
These general comments on investment and consumption in relation to education are fairly self-
evident, but in going beyond them it is necessary to recognize that the detailed application of
these concepts in educational planning has not been entirely successful so far. It has created a
great many problems for educational planners which are still far from solved. These concepts are
difficult to measure when used in relation to education, Thus although education has both
investment significance and a consumption significance it is very difficult in practice to identify
one part of education as having primarily the investment effect and another part primarily the
consumption effect. Thus in making a choice between developing different types of education we
might ask what are the relative contributions to economic growth of emphasizing technical and
vocational education or emphasizing general secondary education. To put emphasis on technical
and vocational education may mean immediately a better supply of certain types of skilled
workers. But emphasizing general secondary education may improve pupils' capacity for and
their receptivity to further training. In this way it may be possible to create a greater flexibility in
the future labor force than if we only endeavor to train people very specifically for certain
technical positions. This indicates a fundamental difficulty in human resource development. The
significance of the production concept in educational planning refers to our earlier example of
the characteristics of teachers in the educational programmed, in that they are both an input and
an output. This can be extended to a further level if we consider the need to produce people who
will staff teacher training colleges. They are an output of the educational system but then they
are also an input which in turn will help create something else teachers, which is again both an
input and an output of the system. Thus the question of gross and net production can become
quite complex even within the educational system. This concludes our illustration of the
applicability of some basic economic concepts to the study of educational planning problems.
8. SOME CHARACTERISTICS OF EDUCATION IN ECONOMIC ANALYSIS
Some special characteristics of education which affect its economic analysis are:
a) The direct economic impact of education is upon the quantity and quality of occupational
skills, labor usually accounting for some three quarters of national output, and education
being a major source of the productivity of labor. Education also has a direct impact on
the economy through increasing the stock of knowledge and ensuring its diffusion.
b) It can also have many indirect effects. It may raise the level of initiative and
inventiveness of the population; it may improve consumption patterns, and may promote
economic and social mobility. The educational system can serve also as an instrument of
selection by which a society finds its leaders, entrepreneurs, administrators and
technicians and improves their quality.
c) The demand for education may be divided for the purposes of analysis into two parts: one
for production purposes, and the other for consumption. W e uses our education to earn a
living, and we use it to enjoy the fruits of living. It is not easy to make this distinction in
practice and we have also to note that both the individual and society use education as a
means of preserving and developing their value systems-a function which does not fall
under either production or consumption in the economic sense.
d) The role of education as an item of consumption, and the fact that it is treated as a social
item in national accounting has obscured the part it plays as an economic investment.
Some economists have attempted to distinguish between investment in technical
education as productive and expenditure on general education as consumption. This
overlooks the fact that general education is a necessary prelude to technical education,
and underestimates the role of the educational system as economic infrastructure. Trade
is important as well as production, and grades such as clerks and accountants as well as
engineers are needed for economic development. It would seem that the whole of that
part of national expenditure on education which results in the raising of income can be
regarded as an economic as well as a social investment.
e) Education requires a relatively long-term span for its returns to accrue, but it has a lower
rate of obsolescence than most physical capital. For planning purposes a time span of ten
to twenty years has to be envisaged for the educational system as a whole. Quicker results
can of course also be achieved by influencing the students already in the ‘pipelines’.
Examples are special training facilities to young people already in the educational
system; temporary adjustments of curricula and teaching methods; programs of re-
schooling by re-capturing people who have already passed out of the educational system.
These can be effective provided the attraction of such short-term yields does not result in
neglect of the basic long-term functioning of the education system since quality as well as
quantity has to be watched at all times. Choices have to be made between investments in
the various educational levels based on long-term criteria in respect of both quantity and
quality.
f) The educational system is interlocked functionally with the socioeconomic environment.
The expansion of education is linked to the employment situation, since people expect to
earn a living commensurate with their educational attainments. And, being large
consumers of budgetary resources, educational systems are dependent upon the national
administrative and fiscal systems within which they operate. Only by integrating
educational planning with over-all planning can it be hoped to avoid the problems of ‘the
educational unemployed’ on the one hand and the shortages of trained cadres on the
other. The preferences of parents and pupils in the end govern entry into the different
available types of education, however good the educational guidance programmed may
be, and it is right that educational plans should allow for the element of human choice as
to the best use of one’s talents. But it is necessary to provide incentives and ladders to
lead pupils into priority occupations for the attainment of the development plan.
9. WEAKNESSES IN THE ECONOMICAL FACTOR INFLUENCE
Economic factors are another major factor leading to school dropouts. The younger students
coming from the poor section of the society lacks the basic needs of livelihood, safety and
stability at home. Thus, many of them drop out of the school to support family and meet their
stomachs by the following means as:
Instability in family
Limited income or poverty
Price rise
Corruption
Lack of College Grants
Private Schools vs. Public Schools
10. ECONOMICAL STATISTICS ANALYSIS IN EDUCATIONAL PLANNING
The economic resources of a country are naturally of a decisive importance in all educational
planning. They are therefore extremely important for the integration of educational planning into
an overall economic planning for a country.
Gross national product, indices of economic growth.
Total public expenditure, by authority and purpose.
Institutions by level and type of education.
Teachers by qualification and length of service.
Number of teachers lost to the educational system each year for various reasons.
11. RELATED RESEARCHES 1. In 1958, the Inter-American Seminar on Overall Planning for Education, held in
Washington and sponsored jointly by Unesco and OAS in pursuance of the
recommendation of the meeting of Minister of Education, made a powerfully reasoned
declaration of the need for overall planning of education in America. Particularly
significant is the same Seminar Is recommendation that a Conference on Education and
Economic and Social Development in Latin America be held,
"In order to consider, on a basis of adequate scientific studies, the relationship between education and social and economic development, the better understanding of which will be a valuable contribution to the effectiveness of overall planning for
education”.
2. UNESCO convened a Regional Conference on Free and Compulsory Primary Education
in South Asia and the Pacific (Bombay, 1952) with two objectives:
(1) Locating the major needs and problems of this region in so far as the provision of
compulsory primary education is concerned.
(2) Mobilizing the resources of the Member States as well as of communities inside and
outside the region and enlisting the assistance of international organizations for meeting
these needs and solving these problems.
12. CONCLUSIONThe above study reveals the significant aspect of the topic “economical factor affecting
educational planning”. It is concluded as from the economic point of view, it is essential to be
able to determine what priority education is to be given in the face of conflicting claims on
scarce resources. It is critically examined, how the capital concept used in economics can be
made use of in educational matters. Thus it perhaps gives more attention than is necessary to the
difficulties Involved. However, having recognized that there are considerable difficulties, this is
not to say that this type of approach should not be made use of in educational planning. It can be
so used, but this must be done with a proper sense of caution. It has been observed that economic
development programs do not achieve their expected results "because of a shortage of the
skilled .manpower to put capital to good: use, which in turn results in slowing down the
programs and a low level of productivity. For effective and adequate planning to enhance
educational reform, there is the need for adequate fiscal resources to develop it. The percentage
of the government budget always earmarked for education is too meager. Hence, there is hardly
enough fund for the planning unit of the educational sector to embark on serious educational
reform and innovation. Planning of any kind is basically the endeavor to work out how to
achieve the maximum possible with the resources available. Fundamentally, economics is the
study of how people and perhaps more important for our purposes society. Choose to allocate the
resources at its disposal in order to achieve its chosen objectives. The important point in common
between these two descriptions of planning and economics is that in both cases we talk about
using limited resources to achieve certain objectives. This obviously has the implication that
there is something fundamental to both, and we shall see how any kind of planning is only an
especially disciplined example of economic behavior. As there are unsatisfied objectives it is
necessary to make such choices which are economic in character in order to achieve as far as
possible the desired objectives. This economic characteristic of behavior applies not just to
financial matters but to all kinds of everyday behavior. The basic point here is that economics is
about scarcity and the implications of this fact of scarcity for our everyday behavior.
13. BIBLIOGRAPHY Educational Planning At Grassroots By J.b.g.tilak The economics of educational planning by Friedrich Edding Economics of Education by Prof. Frank Levy Education and development by Harry Joseph Robinson, Stanford Research Institute Economic factors for planning by Jacksonville & South Jacksonville, Illinois Socio-Economic Factors in Educational Development by P. K. Michael Tharakan What is educational planning? by Philip H. Coombs ESSENTIAL ECONOMIC CONCEPTS FOR EDUCATIONAL PLANNING by A.C.R Wheeler The analysis of educational costs and expenditure by J. Hallak Elements of Educational Planning by unesco. http://www.ehow.com/info_7863720_economic-factors-education.htm http://www.jrf.org.uk/publications/socio-economic-disadvantage-and-experience-higher-
education http://ewds.strath.ac.uk/work-with-it/Home/PESTLE/Economic.aspx
http://www.jagranjosh.com/articles/Educational-Catastrophe-Economic-Factors-for-Dropouts-1291203974-1
http://www.educationfactor.org/article.php?id=43 http://www.researchgate.net/journal/02727757_Economics_of_Education_Review