EAPE 421: PLANNING AND ECONOMICS OF EDUCATION

Course Purpose

The course aims at equipping the student with knowledge on planning strategically for education. To
impart knowledge of the process of Educational planning and the relationship between planning and
economic growth

Expected Learning Outcomes

By the end of the unit the learner should be able to:

Describe the rationale for Educational planning. Explain the factors to consider in Educational planning
Describe the process and types of plans in Educational planning Discuss factors affecting Educational
planning in developing countries Explain the relationship between Educational planning and economic
growth

Course Content

1. History and rationale of Educational planning.

2. Considerations of Educational planning.
3. Professional process of logical steps.
4. Types of plans in Educational planning.
5. Social and psychological factors in Educational planning in developing countries.
6. Approaches (methods) to problems and issues of concern.
7. Administrative factors in Educational planning.
8. Programme and efficiency of operation in developing countries such as Kenya.
9. General concerns of economics and their application to Education: investment, consumption,
capital demand and supply.
10. Measures of returns to investment in Education.
11. Educational role in economic growth.
12. Financing Education.
13. Education equity and efficiency.

REFERENCES

1. Bell, L.(2002). Strategic Planning and School Management: Full of sound fury, Signifying Nothing?
Journal of Educational Administration, 40(5), 407-424.
2. Weindling, D. (1997). Strategic Planning in schools: some practical techniques.
3. In M. Preedy, R. Glatter, & R. Levacic. Educational Management, strategy, Quality and resource
(PP. 218-233). Davies, B. (2006). Processes Not Plans Are the Key to Strategic Development.
4. Davies, B. (2004). Developing the strategically Focused Schools, School Leadership &
Management, 24 (1), 11-27.
5. Preedy, M., Glatter, R. & Wise, C. (2003). Strategic Leadership and Educational Improvement.
London: Paul Chapman.

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PART I: EDUCATIONAL PLANNING
TOPIC ONE: INTRODUCTION TO EDUCATIONAL PLANNING
Introduction
For any society to develop it has to take a serious view of planning, not only of its education but
of the whole spectrum of its economy that will ensure its continuity as well as help it cope with
inevitable changes. Educational planning is not a new phenomenon in human development.

Definition of Educational Planning

• According to Oxford dictionary, to plan is device or design something to be done or some
action or to arrange beforehand.
• Dror (1963) defined planning as the process of preparing a set of decision for action in the
future directed at achieving goals by optimal means.
• Anderson and Bowman (1967) defined planning as the process of preparing a set of decisions
for action in the future.
• Poe (1980) termed planning as the process of rational decision making done sufficiently in
advance to promote more effective operation at institutions such as schools.
• Planning therefore helps the planner answer common questions that are relevant to decision
making process e.g.
 What is to be done?
 Where is it to be done?
 When will it be done?
 Who will do it?
 How will it be done?

Therefore:
 Planning in all its forms is a rational process of preparing a set of decisions for
future actions directed at achieving objectives already set.

The characteristics of planning

• From this definition we note that planning has the following characteristics :
 the future oriented
 its goal oriented
 its a continuous process.
 Action oriented

Importance of Planning
• Planning is essential in all aspects of human life because of one major factor i.e. scarcity of
resources.
• Resources to meet the needs of society varies from one region to the other both quantitatively
and qualitatively.in most cases the resources available are not enough to cater for all the
needs hence planning becomes necessary in order to identify the priorities.
• Planning first emerged in the military. Before engaging in a battle there was need of planning.
Planning then spread into all the other aspects of life.
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• In Kenya the government created an educational planning unit in the ministry of education in
1971. This was in realization that educational administration including teachers in this
ministry should also be planners.
• Consequently the establishment of the planning unit within the ministry of education made
the whole subject of educational planning extremely important

EDUCATIONAL PLANNING
What educational planning is not?
• Educational planning is not a miracle drug to cure all the problems ailing educational
systems. This is an attempt to solve some of the problems facing the educational system and
avoid such problems cropping up.
• Educational planning is not a standard formulae to be imposed in all the educational
situations regardless of their unique differences i.e. what is applicable in Kenya, may not be
applicable in other countries.
• Educational planning is not a conspiracy to destroy the freedom and the prerogative of the
educational administrators, teachers, students and other stakeholders. Before the emergence
of educational planners, education was planned by the administrators. Usually planners are
seen as those out to upset the status quo of the administrators.

Then what is educational planning?

• Educational planning can be defined as an intellectual process to identify the efficient
measures to accomplish educational goals in terms of the future society.

 Educational planning can also be defined as a rational process of preparing a set of

decisions for future actions directed at achieving goals and objectives by optimum
means.

• From this definition, education planning can be viewed as a human activity with the
following characteristics:
 Process of making rational choice
 Activity to predict and prepare for a better future
 A process of making incremental changes

TOPIC 2: SCOPE OF EDUCATIONAL PLANNING

Scope of Educational planning
Scope- extent
 broadly speaking educational planning concerns itself with four broad areas:
i. Setting of specific objectives i.e. what do we want to achieve? It forecasts on the problem
of education to be solved
ii. Providing various options to achieve the specific objectives
iii. Determining the the likely implications of each option

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 iv. Selecting the best option within the existing constraints.

Extent to Which Educational Planning Can be applied in Education

i. Evaluation of the impact of educational projects
ii. To determine the trends of flow of students within the education systems
iii. To determine the participation rates
iv. To determine the teacher supply and demand
v. Provision of facilities in the educational system
vi. The data collected is used by educational planners to determine how much personnel and
time in the foreseeable future.

Time Dimension in Educational Planning

 Educational planning recognizes three time dimension :
 Long term educational planning – forecasting
 Medium term educational planning
 Short term educational planning

Long Term Educational Planning

• It usually embodies an extrapolation of the problem expected with the educational system and
possible solutions to the problems i.e. what educational problems likely to be in the long term
and which requirements are necessary to solve these problems.
• It covers a period not shorter than ten years. Some long term plan can take 20-30 years. E.g.
UN declaration that all African countries should have free primary education by 2015.
• We look at what will be the demands in terms of more classrooms, teachers, teaching and
learning facilities.
• Long term educational plans for planners serves as a guide and source of ideas for planners
taking short term and medium term educational plans i.e. they are subsets of long-term
educational plans.
• In all other sectors within the society long term planning is more applicable than in education.
E.g. it takes more than 16 years to produce a graduate teacher.

Medium Term Educational Plan

• This brings into sharp focus the general goals put in the long term plan. It makes the
boundaries of the objectives clear. It usually takes 5 to 10 years.
• However this varies from country to country and in most cases it corresponds with the
national development plan.
• This is usually a chapter in the national development plan.

Short Term Educational Plan

• This emanates from the medium term educational plan. Here educational projects are
specifically stated and targets are set.
• The strategies to deal with the problems are stated
• Time limit to some of the problem are stated. Here we have the annual education plan within
the plan is implemented.

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TOPIC THREE: BASIC FUNCTIONS OF EDUCATIONAL PLANNING

BASIC FUNCTIONS OF EDUCATIONAL PLANNING

1.Decision making functions/ goal setting / Normative Function
• This function is carried out by politicians, high ranking government officials in the ministry
of education (principal secretary, director general, directors of education etc.), professional
groups or influential citizens.
• In Kenya this function is carried out by the cabinet in liaison with the professionals.
• They are concerned with goal setting and goal approval.

2.Technical function/Strategic Function

• It focusses on:
 Evaluation of required resources in terms of manpower, money etc
 Identification of targets (time frame, number of affected people etc)
 Formulation of plans (narrowing the goals and dividing it into a more workable manner.
• This function is carried out by professionals known as planners and they are trained in
statistics and they are found in the planning units in the ministry of education.
• Planners within the ministry of education are concerned the qualitative and quantitative
aspects of education.
• In terms of qualitative –they are concerned with improving the quality of education i.e.
efficiency and effectiveness of the various levels of education e.g. training facilities for
teachers.
• In terms of quantitative, they look at the quantity of educational facilities, provision of funds
for education, the number enrolled in various levels, demand and supply of teachers in the
education system.
• Educational planners collect enough data, compile it, and use it to set priorities in education
and consequently formulate plans.

3.Implementation function
• This is the operational stage. It refers to the procedures for fulfilling the plan targets. These
activities are carried out by administrators’ e.g. HT/ SCDE, QASO etc.
• They oversee the implementation of educational plan and coordination.
• During implementation function there is a strong link between planners and implementers

4.Control Function
• This is the evaluation function and involves:
 They discover discrepancies between actual and planned achievement, errors and
problems
 They can modify the plan in terms of target population or time
• This function requires a close working relationship between administrators and planners.
Note: All these functions cannot be divorced from each other. They are performed in an
overlapping and interlocking manner.

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TOPIC FOUR: HISTORICAL DEVELOPMENT OF EDUCATIONAL
PLANNING
• Education planning is as old as state education
Until recently, education planning;
 Was haphazard rather than deliberate
 Local affair rather than central government affair
 Was concerned with individual institution rather than entire educational system

Period Characterized By Ad-Hoc Educational Planning

• Tracing the development of educational planning back to ancient civilization of the Nile,
Greece (Athens and Sparta), and the Incas of Peru and in China during the Han dynasty.
• We find that education in this society was meant to switch the lives and aspiration of goals of
those in society. Indeed there is a cross relationship education and philosophy of society.

In Europe - Athens and Sparta

• In these societies education was meant to suit the lives, aspirations or the goals of the society.
• There was close relationship between education and the philosophy of the society- education
was supposed to produce individuals who were loyal, honest and courageous.
• Education activities included: gymnastics, sport and games, dancing and military training

Soviet Union
• The modern concept of planning can be traced to Soviet Union after the 1917 revolution.
• In 1923, the Soviet Union formulated the first ever 5 year education development plan. From
that day onwards , the education system in the soviet union was carefully planned , and within
less than 50 years soviet union was one of the world’s most educationally developed nation
( 2/3 illiterate by 1917)

Rest of the World

• Education planning started after the Second World War.
• This was because
 Post war explosion in the demand for education
 There was an obsession in the growth rates. Politicians and planners realized the
importance of educational planning for the manpower needs of their economies.
 Planning enabled the politicians to allocate scarce resources for economic development
• Britain developed a five year plan, while the countries of Eastern Europe copied the models
of Soviet Union, with emphasis on the relation between educational planning and economic
growth.

Education Planning in Developing Countries

• Most developing countries and particularly in Africa gained independence in 1960 except
a few.
• Prior to this period, education in these countries had been left to grow naturally in the
manner that various forces pursued education differently for their own interest:
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  missionaries,
 Africans
 Colonialists
• For the missionary education was a means of producing catechists and priest and instil
religious and moral values to the people.
• To the colonialists’ education was geared towards producing enlighten labour force and
with simple arithmetic, simple writing and simple reading to make them useful to their
masters.
• To Africans education was a means to achieve white collar jobs, to escape from poverty,
to cross the social gap and as a mean for development.
• After independence Education was closely associated with economic growth. In 1960s
Education ministers from Asia, Africa and Latin America called for 100% participation
rates in primary education by 1980.
• The enrolment for primary, secondary and tertiary education increased sharply. this led to
imbalance between ;
 Regions – The enrolment was more in some regions than others
 Urban and rural areas
 Within levels of the education systems (Primary, secondary and tertiary) in terms of
quality and enrolment.

In Kenya educational planning has been guided by:

• Fraser Report of 1909
In his report, Fraser recommended to the government on industrial apprenticeship through
indentures. He saw a push for industrial education as being more appropriate and
economical. He reasoned that missions and government might through such a scheme
begin a fruitful cooperation in replacing the relatively expensive Indian artisans by
Africans. In proposing an industrial formula, Fraser also felt that he was making an
assault on those undesirable qualities like self-conceit and insolence that were assumed to
follow from giving Africans Literacy education.

On government-missionary cooperation, Fraser took a stand that it was desirable that

education facilities for Africans should be provided by mission societies on the grounds
that education of any kind, industrial or technical, was mischievous without morality and
should therefore be accompanied by definite Christian instruction. He also recommended
the establishment of a department of education and appointing director of education. This
would be aimed at ensuring smooth and independent running of educational activities in
the East African Protectorate.

According to Professor Fraser, Education was to be established on the racial lines namely,
European, Asian and African Education. Europeans and the Asian children were to be
given an academic type of education. On the other hand, the African children were to
acquire a technical type of education. This was aimed at making Africans provide labour
that would be required in the industrial sector, hence, African education was to be
industrial and agricultural in nature.

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 Another recommendation was that the government should give grants in aid to
missionaries to assist them in their educational enterprise. This was due to the
commitment that European missionaries had towards education.

Professor Fraser went further to discourage the input on expensive labour from India.
Instead, the Governor was to concentrate on administering the technical education to the
Africans. This would in turn provide the required labour locally than importing it from
elsewhere. In line with the above recommendations, the development in education
proceeded as follows;

The Educational Board approved Fraser’s proposals relating to the administrative

structure of education system. As soon as the report was published, experimental grants
were offered to certain mission schools for technical education and department of
Education was founded in 1911. With J.R. Orr appointed Director of Education,
government grants in aid went through a system of payment to some eight mission
schools capable of trade training. By 1912, industrial training in basic skills such as
smelting, carpentry, agriculture and even typing was successfully underway.

At the end of 1912, the education department announced the small government school at
Kitui, opened in 1909, be expanded and that in 1913, a new government school would be
opened at Machakos. The director of education was trying to open government schools in
areas he believed were not adequately served by missionaries. The Ukamba Native School
was opened in 1914. Other schools were later opened including the Maasai School at
Narok and the Coast Technical School.

The Director of Education was not at first contented with administering grants for
industrial education. He wanted the adoption of a policy that took into account the
African’s psychology and economic needs. Well reserved in the current literature on the
development lacking areas, he referred to Booker T. Washington for confirmation of his
ideas on education for adoption.

On grants in aid, it was recommended that the government subsidises missions in respect
of pupils at technical schools. The content of African curriculum was to continue on
technical lines. It was observed that if any literacy education is given, the children would
be ruined because they would look for clerical jobs instead of entering manual field
labour. Despite the education commissions and statements of policy government,
participation in African education remained minimal until 1920s. Its main concern was
the immigrant groups.
• Phelps Stoke Commission of 1924
• Advisory Committee on Education (1925)
• Education for Citizenship (1944)
• Beecher report of (1949)
• The Advisory committee on Education (1955)
• After Independence
• Ominde Report of 1964

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Ominde Commission Report (1964)This commission was appointed by the MoE to access the
education resources and to advise thegovernment on the formulation and implementation of
policies for education (Sifuna 1990); it proposed an education system that would foster national
unity and African socialism, thusunifying the different racial and ethnic groups that make up the
nation.
Also, it recommended free primary education.
The 7-4-2-3 system of education was adopted i.e. 7 years primary, 4 years secondary, 2 years
high school and 3 years university.
Changes were made in the content of History and Geography to reflect national cohesion.
The 7-4-2-3 system faced several drawbacks.
i)It lacked the capacity and flexibility to respond to the changing aspirations of
individualKenyans and the labor market needs, in terms of new skills, new technologies and the
attitude towork (Owino, 1977:In Wanjohi, 2011)According to Simiyu (2001:In Wanjohi
2011),the 7-4-2-3 system was too academic and notsuitable for direct employment
.ii) It encouraged elitist and individualistic attitudes among school leavers, something
consideredincompatible to the African socialist mileau (Simiyu, 2001)4

• National Committee on Educational Objectives (Gachathi Report of 1976)

• Report of the presidential working party on the second university in Kenya (MacKey
report,1981)
• Report of the presidential working party on education training for the next decade and
beyond
• The commission of inquiry in to educational system in Kenya (Koech Report, 2000)
• National conference on education Training (2003)

TOPIC FIVE: THE PROCESS OF EDUCATIONAL PLANNING

Let us begin with a bird's eye view of the process of educational planning.
For purposes of discussion, this process may be analyzed into 5 stages, namely
 Situation analysis
 Preparing draft plan
 Evaluation of policy options
 Implementation
 Appraisal
Almost all countries of the African Region have some sort of organization to plan education.
If they did not, the pre-planning stage would begin with
(i) the creation of a suitable planning organization,
(ii) the establishment of planning procedures,
(iii) the structural reorganization of the educational administrative machinery to
participate in the formulation and implementation of plans and
(iv) Setting up the machinery and the procedures for the collection and analysis of the
statistical and other data required for planning.
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Where these have already been accomplished, the principal pre-planning activity is to have the
national educational objectives defined by the appropriate authority.

1. SITUATION ANALYSIS
• Once the national educational objectives are defined, the first step to be taken by the
educational planner is to ascertain whether the current educational effort of the
country is adequate• relevant and conducive to their achievement.
• This is done by matching the output of the educational effort with the objectives and
noting the salient divergences.
• This exercise is called diagnosis and it leads to the identification of weaknesses and
shortfalls in nature, magnitude, quality, organization and level of performance of the
national educational activities.
• The criteria for this diagnosis are dictated by national educational objectives. But the
emerging pattern is to stress on the three criteria of relevance, effectiveness and
efficiency, i.e.: Relevance to national and social aspirations,. Effectiveness in
achieving national objectives in full. Efficiency in the best use of resources to achieve
maximum results.
• It involves the identification of national goals .National goals are determined by the
cabinet.
• Determination of the national goals for education involves an analysis of the current
educational system, this is done on the basis of data available on:
 Enrolment level and type of education
 Total and unit cost
 Quantity and quality of teaching force
• Situation analysis also involves formulation of educational objectives
Purpose Type of planning Time in years End in view
Goals Long range 10-20 To establish direction
Objectives Medium range 5-10 To develop strategies
Targets Short range 1-5 To allocate resources
Tasks Annual Planning 0-1 To implement plans

• Situational analysis is affected by:

Country Background
• In terms of location, geography, population, culture and social stratification patterns.
• Typically different groups have different values about the role of education
• Insofar as education represents access to economic and political power, then, different
access or interest in education also means differential access to power.
Political context
• An analysis of political environment is necessary for understanding of national decision
making process and the role of education in socio-political process.
• The priorities of political elites may differ from the priorities of educational elites, but in
most of the countries there is considerable autonomy provided to education sector.
Economic context
• The analysts want to understand the present macro-economic situation in general and
human resource situation in particular.
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 • Variables such as demographic shifts, urbanization, and migration will have a significant
impact on labour markets and consequently need for education and skill training.
• The level of economic development will set constraints on the capacity of educational
system to build schools and expand.
• Economic growth rate is important for estimating the likely need for certain kinds of skills
but also for estimating the future amount of resources.
• If the rate of growth increases more funds are made available to education, as economic
growth decreases, allocations to education are among the first to cut.

2) PREPARING DRAFT PLAN

a) Setting provisional targets
• The targets will result partly from the data on the future trends of population, migration,
the growth of the school age population, future needs of the economy for skilled
manpower.
• At the time of analysing data for planning purposes, the educational planner would have
taken stock of the resources available to educational development from various sources,
both governmental and nongovernmental, national and foreign.
• If these data are extrapolated into the future, he would get an idea of the resources which
could be reasonably anticipated on the basis of past trends.
• But in most countries, the financial outlay for education would have, already, been
indicated in a macro-economic plan.
• This would give at least the governmental share in the anticipated expenditure on
education.
• With data from either of these sources, the educational planner reviews the future needs,
establishes priorities among competing candidates for resources and sets the targets
which can realistically be achieved with the anticipated investment of resources.
• This is the stage when alternative means of achieving the objectives are examined in
order to determine the most relevant and effective ones within the allowable cost
• The end results will require a detailed knowledge of the education industry to give
confidence in assessing either costs or benefits of education.
• Any miscalculation on the part of the planner will lead to planning based on faulty
premises.
• The purpose of planning is primarily twofold:
(a) To present a set of decisions to the appropriate national authorities for approval: and
(b) To provide a blue-print for action by the various agencies responsible for implementing those
decisions.
• For both purposes, the authorities or the agencies concerned require a clear statement of
what is proposed, why it is proposed and how the proposals are going to be
implemented.
• What is called on Education Plan is that statement.
• Preparation of Each a statement is referred to as Plan Formulation.
• It calls for certain skills as the statement has to be brief, succinct and, at the same time,
adequate.
• The Education Plan, as emphasized, is a brief and succinct statement. So, before it can be
implemented, it has to be elaborated, that is, expanded up to the point that individual
action units become clearly identifiable.
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 • The process of elaboration is in two steps:
(a) Programming - that is, dividing up the Plan into broad action areas each of which
aims at accomplishing a specific objective. Each action area is called a
programme. Usually a programme comprises all activities which are supervised by
the same administrative unit for. Which are so interdependent and complementary
that all have to be done simultaneously or sequentially.
(b) Project Identification and Formulation – Each programme consists of activities
which can be grouped together to form a unit for administrative or accounting
purposes. Such a unit is called a Project. A project usually aims at achieving a
specific sub-objective or target within the main objective of the programme.
• Projects have to be identified and formulated so as to enable them to be executed.
• Project formulation is the task of working out the details of agency, costs, time schedules
etc. for a project.
• Until a Plan has been subjected to Programming and Project Identification and
Formulation, the actual implementation cannot be undertaken.
• Hence, this is a very important stage. In most countries the problem of no
implementation of plans has been traced to weaknesses in this link of the planning
process.
• There is a further step in the elaboration of a plan which is optional. That is
Regionalization.
• Regionalization means the distribution of the provisions of a plan to geographically
identifiable units, such as States, Provinces, Regions, Districts, Municipalities, and
Villages etc. Regionalization applies to the plan as ma whole when it is prepared for the
entire country. It can also apply to a Programme or a Project.

Ways of preparing draft plan

i. Systematic mode
• This is characterized by three operations, generation of data; formulation and
prioritization of options and refining options.
• Data is usually generated from:
 Sector analysis
 Existing body of professional knowledge (conventional wisdom, research synthesis)

ii. Incremental mode

 When issues arrive that should be included in the curriculum then the planner should device
ways of including the idea in the curriculum.

iii. Ad hoc mode

 The problem within the education system e.g. strikes that should be included by the planner

3) EVALUATION OF POLICY
• The diagnosis of the existing educational situation would highlight defects and
deficiencies which are to be corrected so as to enhance relevance, effectiveness and
efficiency.

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 • Corrective action has to be based on a policy which has to be spelled out to indicate
the general framework within which detailed decisions are to be made.
• A set of policies framed to remedy each of the defects and deficiencies revealed by the
diagnosis will form the national educational policy.
• Each new policy seeks to reform education and, therefore, policy formulation is an
instrument of educational reform in terms of:
i. Desirability
• The impact of the option on the interest groups and stakeholders on who will benefit and
who will loose and how the losers will be compensated
ii. Affordability
• The planners need to ensure that the kind of plan laid down is affordable in terms of
personnel (teachers and other workers) and can the government be able to afford and
sustain the education policy?
iii. Feasibility
• Is there enough time to implement the targets? Is there enough personnel and can the
targets required be sustainable?

4) IMPLEMENTATION
• The implementation of an education plan begins when individual projects are taken up
for execution.
• Here, the planning process merges with the management process of the national
educational effort.
• Using the annual budget or the annual plan as the principal instrument, an
organizational framework is developed for the various projects.
• The resources (men, money and materials), needed for each project, are allocated.
• The time within which it is to be completed is indicated. Moreover, such other
operational details as delegation of authority, lines of communication and consultation,
assignment of responsibility and installation of feedback and control mechanisms are
also developed.
• Generally, the entire educational administrative organization of the nation participates in
the Plan Implementation Stage.
• The following must be adhered to:
 Physical resources must be checked and their availability assured
 Finance should be disbursed in good time to avoid implementation delays
 The people who are going to implement the changes and policy should be available
with no commitment elsewhere and ready to start work
 The administration should be ready and provide a good atmosphere for the
implementation to take place.

5) APPRAISAL /FEED BACK

• Once implementation has taken place the assessment should start, so as to check the
effectiveness of the policy.
• Has the objective been achieved? What is the degree of success or failure of the
education plan?
• The achievements, errors and problems are taken into consideration and
recommendations for improvement should be noted.
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 • As the education plan is being implemented, the machinery to evaluate the rate of
progress and detect deviations is set in motion.
• While evaluation is normally a continuous operation, simultaneous with plan
implementation, the preparation of reports may be at fixed points (e.g. annually, midterm
or half-way point of the plan period or end-of-term).
• Evaluation serves two specific purposes:
(a) It highlights weaknesses in the plan (e.g. unrealistic targets, inadequate financial
provisions, improper phasing) and throws up matters for revision of the Plan for the
balance of the plan period. Where the practice of "rolling plans" is adopted, each year's
rolling plan embodies revisions as necessitated by implementation experience.
(b) It takes the place of Diagnosis of the Planning Stage in providing the basis for
replanning. Thus, it becomes the beginning of the next cycle of planning. With the
revision of a current plan and the commencement of replanning for the next cycle, the
educational planning process should continue without a break.

TOPIC SIX: PLANNING THE LOCATION OF EDUCATIONAL

INSTITUTIONS
 The factors considered when planning the location of educational institution are:
 Land
 Demography
 Infrastructure
 Financial resource
 Equity and equality
 Pressure groups

1. Land
• Availability of land is a big issue because land is very scarce nowadays. This is true in
high potential areas that are well endowed with fertile soil and good rainfall, towns, urban
centers and cities where land is very expensive.
• Nature of the land should also be considered (topography). For example schools should
not be located on top of hills as this will hinder the development. It can also raise the cost
of transport and preparation of playgrounds.
• Schools or institutions should not be located near swampy areas, landslides and flooded
flat land. This could lead to collapse of buildings and may make students and teachers
prone to tropical diseases such as malaria.

2. Demography
You should consider the:
 Population size
 Population growth rates
 Number of school age children
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  Economic activities of the people living around that area
The other factor include population flow i.e. there is always influx of population in urban areas,
mining towns, or towns with industries. These activities will attract an influx of people looking
for jobs.

3. Infrastructure
• An institution located close to a load system is unlikely to encounter problems in terms of
transportation.
• An institution should also be located near a source of water. This will serve the purpose
of building the school infrastructure. The water will be used by the population supporting
the institution.

4. Financial Resources
There is need to know where the finances will be source from;
 Private funds
 Public funds from CDF, Harambee
 Donor funds
 Private organization funds
There is need to look at how the funds are used after their availability, and whether the funds
will be able to complete all the projects on time.

5. Equity and equality

Educational opportunities should be widened to cover all parts of the country, and this will
improve human resources in all regions. E.g. national schools, public universities and national
polytechnics should be located in all counties in Kenya.

6. Pressure Groups
• These comprise of politicians and religious groups. In cases where the politicians
command more influence, they are likely to determine the establishment of a school in
order to enhance their chances in politics.
• Competition in education between religious groups or various clans in the past have led to
the establishment of uneconomical educational units.

TOPIC SEVEN: METHODOLOGIES / APPROACHES IN

EDUCATIONAL PLANNING
• Educational planning exercise entails making decisions on how best to improve the
development of education in the society.
• This involves seeking answers to questions like:
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  What role does education play in the society?
 How should education be funded?
 How should the resources devoted to education be allocated to different levels of
education and programmes?
• There are many stakeholders in education who tend to offer different answers to these
questions. In view of the contrasting approaches to educational planning four models or
approaches have been adopted:
 Manpower approach
 Social demand approach
 Cost benefit analysis approach
 Basic needs approach
• Adoption of one or the other of the four approaches is contingent upon the objectives that
the planner focuses on in the context of the prevailing socio-economic and political
environment in the society.

1. Manpower Approach
• Analysis if the market needs of a country in terms of human resources in the past, present
and future.
• The manpower approach, attempts to provide the society with correct number of suitably
educated people to meet most of the economic, social and political needs of different
manpower levels.

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It is concerned with the relationship between all institutions, the existing numbers of students
and those graduating each year from each level and the job vacancies available in the modern
sector of the economy.

Advantages of manpower approach

• It helps the educational planners to see whether and how educational system is meeting
the needs of the estimated trained personnel required for development.
• It gives guide on how educational qualification of the labour force ought to evolve in the
future.
• It determines what relative ratio should be of people with primary education or less,
secondary education and post-secondary education.
• It aims at self-sufficiency in manpower resources which is essential for economic
development.
• It is essential for macro planning. They estimate the manpower requirement for a whole
a whole nation in a given period. It is holistic in nature.

Disadvantages
• It confines itself to high level manpower needed by the modern sector. It ignores the
educational requirements for the majority of the labour force. I.e. semi-skilled and
unskilled workers.
• It is impossible to make reliable forecast of manpower requirement for the future. This
is due to political, economic, social and technological change e.g. tailors, cobblers, ICT,
M-Pesa and banks.
• It limits educational planning to strictly economic needs, ignoring optimum resource
allocation.
• It does not take into consideration the costs involved in or the financial capability of the
country to finance its manpower needs. In Kenya Siriba, Kisii and Kagumo train Arts
teachers.

2. Social Demand Approach

• When applied to education social demand refers to the aggregate/ total demand for
school places in a nation. It is the popular demand for education. It is mainly concerned
with the consumption function of education rather than investment of it.
• It views education as a service which is demanded by the public just like any other goods
and services. Education is provided to those who want it.
• In Kenya tuition fee was abolished in 1974 in lower primary schools resulting in a steady
rise in enrolment.
• In 2003, the government abolished any fee in primary schools
• In 2008, the government abolished tuition fee in secondary schools by providing free day
secondary education at 10,265/= per student per year.

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Advantages of social demand approach

• It is the starting point in planning. The approach was used by post-independence
developing countries to bring desirable changes in the socio-economic and political
realms.
• It indicates to the planners the resources that would be required at each level of
education as long as existing trends in the demand of education continue.
• Leads to mass education/ mass literacy i.e. It ensures all individuals acquire education as
a basic human right.
• Fosters equality in the society as it does not discriminate on any category of people in
the provision of education.

Disadvantages of Social Demand Approach

• It ignores the larger problem of national allocation of resources. i.e. it assumes that the
cost factor is not important.
• It does not pay attention to the balance between the output of education system and the
labour market. This can lead to people who are educated and unemployed; which can
bring social instability.
• It brings about inflation of diplomas and degrees which might result in a waste of money
to an individual and government.
• It might compromise the quality of education

3. Cost –Benefit Analysis/Rate of return analysis

It focuses on the economic benefits of education.
• An examination of various levels of education is carried out to find out how much each
level costs and benefits accruing from it.
• The cost of education to the society (known as social costs) includes expenditure
incurred by the government, private companies, donor agencies and parents against the
social benefits expected to accrue in terms of extra earnings measured by individual
productivity.
• Private costs are costs to individuals which include tuition fees, uniform, transport,
boarding fees, books, earning foregone and benefits accrued i.e. individual extra earning
due to education.

Advantages of Cost – Benefit Analysis

• It provides a link between education and labour market.
• It combines information about the cost of different kinds of education and relative costs
of different categories of manpower.
• It may suggest ways of increasing profitability of education by either increasing the
benefits or lowering the cost.
• It focuses attention on the problem of choosing between alternative investment patterns
i.e. technical / academic primary/ secondary.

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Disadvantages
• Earning differentials are not only due to education, but could also be due to natural
ability, motivation, social background, sex, occupation. Therefore earning differentials
should not be a measure of pure benefits of education.
• Education does not make workers more productive but simply acts as a filter or
screening device that enables employers to identify those with superior natural ability.
• Earning differentials do not adequately measure differences in productivity of workers
due to imperfection in the labour market (labour unions, salaries are set by the
government.
• Rate of return calculations assume full employment of educated workers whereas Kenya
is experiencing high unemployment of graduates.
• Education also generates indirect benefits which are not shown in the earning
differentials of workers e.g. fertility, health, civic awareness, innovation to change.

4. Basic Needs Approach

• This approach places its central emphasis in meeting the basic needs of the people.
Underlying this approach is Maslow’s theory of human motivation.
• In 1954 Abraham Maslow came up with the hierarchy of needs.

Sel
actualiz
Esteem
Social
Safety
Physiological

 The 1948 UNESCO conference on Education declared

placing education among other basic human needs. Meeting the basic needs of the poor should
be at least of the country’s development policies.
 Can we use education to alleviate poverty?
• The principle of basic needs approach was adopted by the 1976 world employment
conference.
• In this conference it was proclaimed that natural development plans should include the
promotion of employment of satisfaction of basic need in each country’s population.
(basic needs: food , shelter , clothing , health, water and education)

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Education as a Basic Need

 In terms of years in which an individual has been in school, teachers, student ratio, no of
students per class, money spent per pupil: basic needs approach emphasizes objective of
education as:
 Prepare people for the role as parents (father and mother)
 Help people to make wise decision e.g. using of time well , nutritional value of food
 Help people to use scientific attitude to nature and nutrition
 Helps eople to fit in ther roles as citizens
 Education is seen as means of meeting other basic needs

Solutions to Problems Facing Education

Political good will /commitment to implement suggestions of education planners e.g.
implementation of education system.
• There is need for clear definition of responsibilities by educational planners.
• Develop clear education polcies and priorities.
• Policy makers to treat development of educational alternatives as a technical process and
not political process.
• Education administrators to actively support changes implied in educational planning. 
Mutual coordination of those concerned with development of education as a whole.

TOPIC EIGHT: PROBLEMS AND ISSUES IN THE PLANNING

OF EDUCATION
In spite of the developing countries having economic and educational planning units, they
face the following educational planning challenges:
 Personnel
 Data
 Physical facilities
 Politics
 Finance

1. Insufficient Personnel
• There is insufficient numbers of qualified teachers to teach in the school systems.

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• There are insufficient number of quality assurance officers to oversee the supervision of
teachers and hence improve the quality of education being provided.
• There are insufficient educational administrators for the general administration of
education.
• Some parts of the country have enough of these personnel, hence perform better in
examinations. Other areas e.g. Northern Kenya experience acute shortage of qualified
personnel hence poor examination results.
• The problem that faces the educational planners is the inability to make decisions on the
provision on the provision of adequate training facilities that would facilitate the training
of teachers as well as in service course programmes of educational supervision.

2. Inaccurate Population Data

• Inaccurate data is obtained due to inaccurate statements or false data.
• Inaccurate statements come from those who know how old they are but for one reason or
the other give false information.
• Women may reduce their age out of variably while men may increase their age due for
some possible advantage.
• It becomes difficult for the education planners to focus accurately the school enrolment
and hence have adequate facilities.
• Inaccurate dada can come about due to rapid population growth i.e. in Kenya population
census is always taken at an interval of 10 years. In between education planners use only
projections.
• Expenditure in education is directly proportional to enrolments and depends on the
school age population, but financing of the education depends on economically viable
part of population.
In the absence of accurate population data, the educational planners would find it difficult to
estimate the school enrolments by age or by sex. It will be difficult to estimate the number of
teachers, desks, books etc.

3. Politics
• For example, the siting of a school can be determined on the basis of political patronage
rather than the school population around the school the school, transport facilities,
location and size of existing school and accessibility.
• When the location of school is determined politically, the education planner is singly
instructed to devise specific construction programmes.
• In developing countries political decisions can be made in public rallies and mostly those
pronouncements may not have reached the education planners at the time they are made
and yet planners are expected to affect them immediately.
Example: in 1978 provision of free milk to primary schools (educational planners in the treasury
were given 11 days to complete the plan). NARC campaigns in 2002 promised free primary
education. 2007 election campaigns promised free day secondary education.

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4. Finance
• Financial resource devoted to education is limited and education must complete with
other ministries for trading.
• There are different levels of education e.g. primary, secondary, and tertiary and there are
different sectors of education such as special education, KIE, TSC, Kenya Equipment
Scheme.

5. Physical Facilities/ Administration

• In Kenya today most primary schools are housed in temporary or semi-permanent
buildings. There are also insufficient classrooms, libraries, laboratories.
• Secondary schools new science syllabus, general science not enough facilities for
inspection and education.

Existing Policies and or No policy at all i.e. lack of policy to guide education
 One of the major conflict in education planning is lack of policies.
• Lack of clear policies to guide education: the biggest problem is because of political
patronage.
• In some cases there are no policies to guide education e.g. location of school or colleges
based on political patronage rather than the concentration of the school aged population,
size of the existing school, availability of resources etc. such efforts frustrate
educational planning.

Solution
 Politicians should support planners and respect their views
 Policy makers must refrain from treating the development of education alternatives as a
political rather than technical one
 Educational administrators must actively support changes implied in educational
planning.
 Attention should be directed towards the development of clear educational policies and
priorities so that educational planners have some better notion of what they are planning
 Political authority and atmosphere should allow for establishment of planning offices
and commitment to support planning activities.

DEFINITION OF OTHER TERMS

The rate of return analysis in educational planning The rate of return
approach simply says that expanding the educational system to the point where, taking
into account' all social costs and benefits, the net present value of the education of the

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last man educated falls to zero or until social rate of return becomes equal to social
discount rate. '

Incremental mode

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PART II: ECONOMICS OF EDUCATION

TOPIC ONE: INTRODUCTION

• Economics is a social science concerned with material well-being of people. It is about
how well people are and how they can be made better.
• Resources for the well-being of people are scarce. Economics is therefore concerned with
choices. It is concerned with identifying and selecting among alternatives.
• Each time a choice is made there is a foregone opportunity.
• The major concern of economist is that resources available should be used to improve
societal well-being (enough balanced diet, infrastructure, and improved health care,
technology to ease things up, better income, amenities, and learning institutions).
• Resources are scarce while human wants and desires are unlimited. People need various
assets but lack money to purchase all these, this leaves the issue of choice. Choice has to
be made between the various goods to be bought depending on one’s ability.
• Economists are concerned with the allocation of the resources in the best way (optimal
way) due to the scarcity of resources to satisfy everybody’s and government’s wants. If
resources are scarce and should be allocated optimally one should consider what the cost
and the benefits of alternative projects before choosing.
• What is foregone once one makes a given choice is the opportunity cost.
• Opportunity cost the highest valued alternative we forego for selecting an alternative
choice.

ECONOMICS OF EDUCATION
• Economics of education has been a popular subject to politicians, economists, educators
and ordinary citizens for ages in the past since the time of ancient Greeks and Romans.
• Human society has been keen to discuss the contribution of education to social welfare of
society and to allocate the contribution of education to actual economic development in
statistical terms of human capital versus production outputs for economic growth.
Definition

 Economics of education is the use/ application of economic tools to analyze problems

affecting education.

ECONOMIC TOOLS OF ANALYSIS APPLIED IN EDUCATION

 The economic tools of analysis include:
Cost- Benefit Analysis (CBA),
Cost-effectiveness Analysis (CEA),
Education Production Theory and

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Cost Analysis.
 The tools of analysis enable the economist to evaluate investment choices and thus
offer a rational guideline on how best to allocate profitable resources in the education
sector.

1. Cost- Benefit Analysis (CBA)

 Economic tool which is designed to provide an economic appraised of an investment
possibility.
 Gives a systematic comparison of the magnitude of the cost and benefits of some form of
investment in order to assess its profitability.
 It is measured by rate of return in an investment. The returns are mainly in terms of
productivity hence earning.

2. Cost-Effectiveness Analysis (CEA)

 Economic tool of analysis that compares the output achieved by a combination of various
inputs which can allow for identification of the lowest cost of achieving a designed output.
It can also access the greatest level of output that can be achieved at a given cost.
 Measured by cost-effectiveness ratio which is defined as the cost of a program divided by
its effectiveness. Effectiveness is measured by scores in a standard examination.

3. Education Production Function (EPF)

 It is also known as the input output relationship. Education inputs include teachers,
learning materials school physical plant.
 Output is the pupils’ achievement.

4. Cost analysis
 This is done by setting up a budgeting and accounting system in a way that allows programme
managers to determine the unit cost or cost per unit of service.

WHY ECONOMISTS ARE INTERESTED IN EDUCATION?

• Education has both private and social benefits hence economists are interested in
measuring the benefits.
• Education has non-monetary returns (neighborhood externalities) and economists want to
measure them e.g. indirect economic returns such as external benefits affecting the income
of other members of the society.
• Education makes people productive by equipping them with relevant skills.
• Education leads to economic development, economists need to link between education and
economic development.

WHY STUDY ECONOMICS IN EDUCATION?

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• Education is a costly investment to individuals and the society and hence necessary to
subject the education sector to the economic tools of analysis and make it more efficient
and productive.
• Economics of education helps us to create awareness of the issue of scarcity of resources
and hence the need for a choice in allocating these scarce resources effectively and
efficiently.
• Economics of education can be used to find the benefits of various levels of education
• By applying economic tools of analysis we can determine the contribution of education to
economic growth.
• Due to changing demographic and ideological environment one needs to understand basic
economics of education. Policy makers in the society also need an understanding of
economics of education to be able to explain why the government should reduce education
subsidies, why cost sharing is necessary and why we have students’ loans.
• Because economics of education is concerned with queries about choice in educational
investments amidst scarce resources it can assist the planner on how, why and where to
advocate for more resources e.g. primary and secondary education considering the rate of
return.
• Economics of education analyses and provides policy makers with the implication of
various policy decisions especially in the area of training and management. E.g. what are
the financial implication of starting another stream in a school?
• Economics of education has the ability to highlight the difficulty involved in any attempt
to measure satisfactorily the effect of education on health, income distribution, economic
growth, poverty etc.

Microeconomics vs. Macroeconomics: An Overview

Economics is divided into two categories: microeconomics and macroeconomics.
Microeconomics is the study of individuals and business decisions,
while macroeconomics looks at the decisions of countries and governments.

Though these two branches of economics appear different, they are actually
interdependent and complement one another. Many overlapping issues exist
between the two fields.

KEY TAKEAWAYS

 Microeconomics studies individuals and business decisions,

while macroeconomics analyzes the decisions made by countries and
governments.
 Microeconomics focuses on supply and demand, and other forces that
determine price levels, making it a bottom-up approach.
 Macroeconomics takes a top-down approach and looks at the economy as
a whole, trying to determine its course and nature.

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 Investors can use microeconomics in their investment decisions, while

macroeconomics is an analytical tool mainly used to craft economic and
fiscal policy.
Microeconomics
Microeconomics is the study of decisions made by people and businesses
regarding the allocation of resources, and prices at which they trade goods and
services. It considers taxes, regulations and government legislation.

Microeconomics focuses on supply and demand and other forces that determine
price levels in the economy. It takes a bottom-up approach to analyzing the
economy. In other words, microeconomics tries to understand human choices,
decisions and the allocation of resources.

Having said that, microeconomics does not try to answer or explain what forces
should take place in a market. Rather, it tries to explain what happens when
there are changes in certain conditions.

For example, microeconomics examines how a company could maximize its

production and capacity so that it could lower prices and better compete. A lot of
microeconomic information can be gleaned from company financial statements.

Microeconomics involves several key principles, including (but not limited to):

 Demand, Supply and Equilibrium: Prices are determined by the law of

supply and demand. In a perfectly competitive market, suppliers offer the
same price demanded by consumers. This creates economic equilibrium.
 Production Theory: This principle is the study of how goods and services
are created or manufactured.
 Costs of Production: According to this theory, the price of goods or
services is determined by the cost of the resources used during
production.
 Labor Economics: This principle looks at workers and employers, and
tries to understand patterns of wages, employment and income.

The rules in microeconomics flow from a set of compatible laws and theorems,
rather than beginning with empirical study.

Macroeconomics
Macroeconomics, on the other hand, studies the behavior of a country and how
its policies impact the economy as a whole. It analyzes entire industries and
economies, rather than individuals or specific companies, which is why it's a top-

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down approach. It tries to answer questions such as, "What should the rate of
inflation be?" or "What stimulates economic growth?"

Macroeconomics examines economy-wide phenomena such as gross domestic

product (GDP) and how it is affected by changes in unemployment, national
income, rates of growth and price levels.

Macroeconomics analyzes how an increase or decrease in net exports impacts a

nation's capital account, or how gross domestic product (GDP) is impacted by
the unemployment rate.

Macroeconomics focuses on aggregates and econometric correlations, which is

why governments and their agencies rely on macroeconomics to formulate
economic and fiscal policy. Investors who buy interest-rate sensitive securities
should keep a close eye on monetary and fiscal policy. Outside a few meaningful
and measurable impacts, macroeconomics doesn't offer much for specific
investments.

John Maynard Keynes is often credited as the founder of macroeconomics, as he

initiated the use of monetary aggregates to study broad phenomena. Some
economists dispute his theories, while many Keynesians disagree on how to
interpret his work.

TOPIC TWO: EDUCATION AS A CONSUMPTION AND

INVESTMENT SAVING AND INVESTMENT
SAVING
Decision to abstain from consumption now with the expectation of being able to consume later.
INVESTMENT
• Refers to expenditure on goods and services that do not directly satisfy the consumer
wants at the present but are used for production of other goods and services in the future
e.g when we invest in education we expect we expect to reap some returns in the future.
• Refers to the net capital formation i.e. the act of increasing the community stock of
productive capacity. Savings leads to investment.
CONSUMPTION

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Utilization of goods and services for persons or societies immediate satisfaction.

• Means the disposal of the rest of the income apart from the one which is saved. Hoarding
is also a consumption since hoarding is only delaying purchase of goods and services for
current satisfaction.

INVESTMENT COSTS
Investments in human capital entail an investment cost, just as any investment does. Typically
in European countries most education expenditure takes the form of government consumption,
although some costs are also borne by individuals. These investments can be rather costly. EU
governments spent between 3% and 8% of GDP on education in 2005, the average being 5%.
However, measuring the spending this way alone greatly underestimates the costs because a
more subtle form of costs is completely overlooked: the opportunity cost of forgone wages as
students cannot work while they study. It has been estimated that the total costs, including
opportunity costs, of education are as much as double the direct costs.

RETURNS ON INVESTMENT
Human capital in the form of education shares many characteristics with physical capital. Both
require an investment to create and, once created, both have economic value. Physical capital
earns a return because people are willing to pay to use a piece of physical capital in work as it
allows them to produce more output. To measure the productive value of physical capital, we can
simply measure how much of a return it commands in the market. In the case of human capital
calculating returns is more complicated – after all, we cannot separate education from the person
to see how much it rents for. To get around this problem the returns to human capital are
generally inferred from differences in wages among people with different levels of education.
Hall and Jones have calculated from international data that on average that the returns on
education are 13.4% per year for first four years of schooling (grades 1–4), 10.1% per year for
the next four years (grades 5–8) and 6.8% for each year beyond eight years. Thus someone with
12 years of schooling can be expected to earn, on average, 1.1344 × 1.1014 × 1.0684 = 3.161
times as much as someone

EFFECTS ON PRODUCTIVITY
Economy-wide, the effect of human capital on incomes has been estimated to be rather
significant: 65% of wages paid in developed countries is payments to human capital and only
35% to raw labor. The higher productivity of well-educated workers is one of the factors that
explain higher GDPs and, therefore, higher incomes in developed countries. A strong correlation
between GDP and education is clearly visible among the countries of the world.

INVESTMENT IN EDUCATION
Education as an investment is supported by the theory of human capital i.e. equipping people to
be more productive in the future. Education leads to the formation of human capital by equipping
individuals to be more productive. Investment in human capital, such as education, has three
major Economic effects:

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o Increased expenses as the accumulation of human capital requires investments just

as physical capital does,
o Increased productivity as people gain characteristics that enable them to produce
more output and hence
o Return on investment in the form of higher incomes
 The central idea is that undertaking education is investment in the acquisition of skills and
knowledge which will increase earnings, or provide long-term benefits such as an appreciation of
literature (sometimes referred to as cultural capital).
There are Two Types of Investment in Education
i. Social investment (public)
ii. Private investment (households)

The objective of investing public resources in education are:

i. To promote equality and social mobility
ii. Contribute to high and sustainable economic growth
iii. Enhance human development

Private households invest resources in education because of the following reasons:

i. Improve employment prospects
ii. Improve earnings
iii. Improve social status

Options for education- investments

There are three options for education investments.
i. Increase private sector investment and participation in education
 Since the students attending private schools and education institutions are likely to be
drawn from upper income families, it would release more public funds on per student basis
for students from poorer families.

 It would provide an alternative mode of service delivery with considerable power and
responsibility at the level of individual education institutions such as private schools and
institutions. Those private institutions would be compelled to offer high quality services to
remain viable on an economic context where they are in competition with free public
education institutions.

ii. Increase Public Investment in Education

 Government should improve the quality of education. Improving quality of education
requires investment of resources in the education system.
 Given the low level and decreasing trend of real public spending, the major challenges the
developing countries face in improving the quality of education is economic. It is
important that the governments preserve the current level of real expenditure in short term
and to increase public investment in education gradually over medium terms.

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iii. Increase Cost Effective Education

 To reduce the cost of education can be done by:
 School rationalization
 Done by consolidating small and uneconomic schools. This can be done without reducing
access to schooling and affecting enrolment and attendance.
 Increasing teacher pupil ratio
 Less teachers will be employed without compromising quality. Countries with outstanding
educational systems such as South Korea, Singapore, and Hong Kong started with very
high teacher pupil ratio, before it was gradually reduced as the population was becoming
richer.

EDUCATION AS A CONSUMPTION
 Consumption is the utilization of the final goods and services for immediate satisfaction.
Before human capital revolution in the 1960’s, education was considered to be a
consumption good.
Why Education is a Consumption Good.
 Education and especially higher education enables individuals to choose from a broader
spectrum of jobs that are mostly considered more interesting and more challenging.
 The consumption aspect of education while acquiring it consists of the joy of;
• Learning new things
• Meeting new people
• Moving to a new city or town
• Increased status in the society that often comes from being a student of a partner field
• Some people choose to become students mostly to be able to take part in some way of
life. Their aim is principally directed towards immediate consumption and they
consider the other effects like positive monetary returns as pure positive by products.
• Education is also considered a consumption as it:
• Helps individuals become better citizens
• To become law abiding
• Self-actualization
• Social recognition

Education and social & Economic Development Economic growth

• According to Todre (1982):
Economic growth is the steady process by which the productive capacity of the economy
is increased over time to bring about rising levels of national income. It actually refers to
the GNP of a country.
 Economic development-means an improvement in the quality of life and living
standards, e.g. measures of literacy, life-expectancy and health care. Higher
real GDP enables more to be spent on health care and education.
 Underdevelopment-this refers to low level of development characterized by low real per
capita income, widespread poverty, lower level of literacy, low life expectancy and
underutilization of resources etc.

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• Education contribute to economic growth by:

i. Through creation of new knowledge, more highly educated individuals translate
into more scientists, analysts and inventors working to increase the stock of human
knowledge through development of new processes and technologies.
ii. It affects growth through diffusion and transmission of knowledge. Schools
provide the education level necessary to understand and digest new information,
and a way to transmit new information, education is an important contributor to
technological capability and technological change in industry.
iii. There is a positive feedback from improved education to greater income equally
which in turn favours higher rates of growth. As more education becomes more
broadly based, low income people are better able to seek out economic
opportunities. iv. Education has a positive impact on the nature and growth of
exports, which I turn affects the growth rates. The education and skills of
developing nation’s labour force influence the nature and composition of its trade.
Investigation has shown that there is a significant correlation between the growth
of manufactured exports and growth of skilled manpower.
v. The higher the level of education of the work place the higher the overall
productivity of capital because the more educated are more likely to be innovative
and thus affects everyone’s productivity.
vi. The amount of education an individual receives not only affects his earnings, but
also the quality of his employment as well. Educated workers have three
advantages:
 Higher wages
 Greater employment stability
 Greater upward mobility in income
vii. There is also fringe benefits which accrue when one is employed. The fringe
benefits include allowances, bonuses, or an individual may be appointed in a
position of influence, like decision making positions.

TOPIC THREE: EDUCATION AND SOCIAL DEVELOPMENT

Social development
Refers to the progress in social welfare of country’s population e.g. reduced inequality in various
classes of people in the society and also positive development in people’s culture.
Education contributes to social development in the following ways:
1. Education and democracy
 Education increases democracy, political stability, improved civil participation and social
cohesion. Educated people read more about issues, watch more news programmes to stay more
informed and take more active interests in politics.
2. Education and Criminal activities
 Education reduces criminal activities and crime rate. People have alternative income
generating activities

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3. Education reduces fertility

• The more education women have, the fewer children they have. An educated woman
can understand family planning techniques more readily.
• Education raises the age of marriage, because they spend more years in school, and my
delay the first sexual encounter.
• Child rearing and bearing affects woman’s ability to learn and progress.

4. Education and agriculture production

 Four years of farmer education is associated with a 6.1% increase in agricultural production.
Educated farmers are more innovative and flexible to change. They readily adopt the modern
farming methods.

5. Education, nutrition and health

• Educated mothers are associated with better nutrition and therefore a better health for
their children.
• People’s health is affected by their purchasing power, which enables them to eat good
and ample food, have proper housing, water, fuel and medical services. Of great
importance is the level of women’s understanding of matters concerning nutrition,
hygiene and health. People who are health, well-nourished and educated contribute
more to economic growth.
6. Education and mortality rate
• More educated mothers have lower mortality rates for their children. Educated women
have fewer children therefore the health of their children and their health is improved.
• Educated mothers know the importance of good diet, cleanness, good sanitation, what
medical service are available and when and how to use them. This also increases the
life expectancy of the population.
• Literacy of the people correlates positively with life expectancy.
7. Education and migration
• Young educated people are likely to move to the cities and other parts of the country,
whenever job opportunities are available.
• Education in itself can be an attraction in that there is often a better chance of securing
a place in schools in urban areas.
• The remittances made to the rural areas help to develop the rural areas.
• Migration also eases pressure on land, migration also breaks down traditional attitudes
and customs that often inhibits development.
• International migration is very important today. Many workers from Kenya has moved
to other countries such as S.Africa , Namibia , Botswana in Africa and other
developed countries such as the U.K , Germany , U.S.A and Australia. They remit a
lot of money in terms of billions of shillings ( this money is greater than the money
earned from tourism sector and it spurs economic development )

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TOPIC FOUR: DEMAND & SUPPLY OF EDUCATION

- The demand for education is always influenced by economic, political, social and
cultural factors.
- Supply depends on human and materials resources.
- Government around the world spend significant resources on education, while such
outlays have led to a tremendous expansion of schooling, they have not reduced the level
of disadvantaged for many groups especially those in;
• Rural areas
• Poor of the poorest
• Women
• Ethnic or religious minorities
• Indigenous people
- Some government are using demand financing, whereby public funds are channeled
directly to individuals or to institutions e.g in Mexico where students are given stipend for
attending school (poorer pupils).
- In Kenya each primary school is given about 1,000/= while secondary students are given
10,268/= per annum.
- In many developing countries demand side financing incentives as well as in kind transfer
are incentives to boost education enrolment e.g. Bangladesh’s food for the Education
Incentives, is designed to entice families to send their children to school.
- The materials resources can lead to higher school attendance rated and lower school
dropout rates.
- It can lead to reduction of child labour, increased educational attainment and improved
health and nutrition for the poor.

1. Demand for Education is affected by :

- The cost to the individual of that education, including both the direct and indirect costs.
- Earning accruing as a result of the extra education.
- The unemployment rate amongst the educated (e.g. some courses as forestry
anthropology). When the unemployment rate of one level of education increases it many
lead to increase in demand for the next level (M.SC or M.A).
- Change of income of individuals and the society. When the national income rises,
expenditure in education also rises. This is also true for individuals. The poor often
respond significantly to arise in income by increasing their expenditure in education.

2. Supply education is affected by :

- Supply of Education of all levels is determined by a political process rather than economic
factors and the level of private demand determines the amount supplied.
- When the government has exhausted its funds, then the demand for education may result
in the growth of private sector of education.
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DEMAND AND SUPPLY OF TEACHERS

1. Demand of teachers
- Depends on the number of teachers leaving the system and needed to be replaced
(retirement, changing jobs).
- The number of teachers required because of increased or decreased learner enrolment
(Trends of young people of school age).
- Other exceptional factors include mortality rate due to HIV/AIDs among young teachers.
- Migration of families from rural areas into urban and metropolitan centers.
- Variables affecting demand include teacher pupil ratio, number of learning subjects
offered by a school, the areas of specialization and the number of hours per day that
teachers teach.
- Participation rates and the duration of compulsory education.

2. Supply Side
- Ministry qualifications for teaching P1 for primary diploma or degree for secondary.
- Criteria for registration.
- The number of graduates from initial teacher education programme who make themselves
available for employment as teachers for the first time.
- The graduate output is reduced by the number of students who do not complete their
programme and by those who chose not to teach.
- The number of qualification teachers who are not currently employed in education (doing
other jobs other than teaching).
- Teachers returning from leave. Those are teachers who return to classroom as permanent,
fulltime or part time teachers after a period of extended leave.
- Teachers who resign & return at older stage. Some of the teachers resigned from teaching
only because they were unable to secure leave of absence long enough for their needs.
Those teachers intended from the start to return to teaching i.e they are a kin to those
teachers who go on extended leave. Others however, would leave with no intention or
returning to teaching.
- Oversees migration especially in South Africa & Developed countries e.g Australia.
- Relative wages and remuneration of teachers. When the labour demand is high and the
wages of teachers are low, more teaching graduates opt for jobs outside the teaching
professions.
- Perceived status of teaching where teaching is regarded highly traditionally more teachers
are retained. However where the status of teachers have been eroded, the retention of
teachers is very low.
- Career prospects factors such as the potential for career progression, the pace at which
remuneration increases with experiences and the possibilities to change roles within
teaching (e.g to administration) influences retention.

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- Nature of teaching jobs; increased demands on teachers that can reduce retention include
curricula changes, overcrowded classes, new subjects truancy, violence, indiscipline and
advent of ICT.

HUMAN CAPITAL THEORY

• When the concept of human capital was introduced in 1960 by Schultz T. W. and
elaborated by Gary Becker economics attempts to study the relationship between
education and economic growth.
• Until this date, most economists held a concept of capital restricted to physical capital.
They recognized that the main influence on country’s volume of production is the quality
and the quality of factors of production i.e inputs used in the production of goods and
services.
• The inputs were classified as land, labour capital.
• Before 1960 and the work of Schultz, economics realized that the human factors was
important but avoided the idea of investment in human beings, which seemed to put
people in the category of machines.
• They saw education as essentially consumption, but not as an investment. Education was
not seen as key factor in economic growth through its effects on the skills and knowledge
of the labour force.
• The traditional approach to the analysis of factor of production did not seem to explain
rapid rate of economic growth that had taken place in many industrialized nations after 2 nd
world war.
• Their calculations using only capital, labour and lands as factors of promoting growth
seemed to reveal a bonus of output that was unexplained. This unexplained output was due
to human capital or ‘residual factors’.
• The human capital was brought about by;
i) Investing in human beings through formal education
ii) On-the-job training
iii) improved health
iv) Adult education
v) Migration of workers so that they could respond to changing job opportunities.

TYPES OF CAPITAL
1. Financial Capital
It facilitates economic production, though it is not itself productive referring rather to a system of
ownership or control of physical capital. You pay for inputs before you can profit on outputs.

2. National Capital
It is made up of resources and the ecosystem services of the national world e.g water systems,
forest, fishes, clean environment etc.

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3. Produced or Physical Capital

Consist of physical assets generated by applying productive activities to natural capital &
capable of providing a flow of good & services e.g factories machine. They are used for the
further production of goods & services so as to increase productivity in the future.

4. Human Capital
 Refers to the productive capacities of an individual, both inherited and acquired through
education and training.
5. Social Capital
• Consists of a stock of trust, mutual understanding, shared values and socially held
knowledge.
• It is most often used to refer to characteristics of society that encourages co-operation
among a group of people (workers or managers) to achieve a greater and efficient
production.

Sources of human capital differences

i) Innate ability
Workers can have different amounts of skills or human capital because of innate difference.
Research in biology or social biology has documented that there is some component of IQ which
is genetic in origin, the relevance of this observation can be supported by the fact that there is a
difference in human capital even id individuals have access to some schooling opportunities.
ii) Schooling
It is more observable component of human capital investment. Schooling differences account
for relatively small fraction of the differences in earnings.
iii) School quality and non-schooling investment
• The higher quality of school. The better the human capital. The differences in school
quality may make one study for special subjects, more variety of choices; one may
become more assertive or better in communicating.
• Non schooling investments include hardwork, keeping time etc.
iv) Training
• This is the component of human capital that workers acquire after schooling.
• It is often associated with some sets of skills useful with a particular set of
technologies.

v) Pre-labour market influence

 Peer group influence effects to which individuals are exposed before they join the labour
market may also affect their human capital significantly e.g. where the parents live will affect
their children’s pre-labour market influence.

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Views on Human Capital

1) Adam Smith
• He considered human capital to be the centre of economic theory and the main source
of economic growth.
• He believed that the production of human capital yields a considerable return inform
of higher lifetime income.

2) Heinrich von Thunen

 Since a more schooled nation equipped with the same material goods, creates a much larger
income than an uneducated people and since this higher schooling can only be obtained through
educational process which requires a larger consumption of material goods, the more educated
nation also possess a larger capital, the returns of which is expressed in the larger production of
labour.

3) Alfred Marshall
 Defined personal wealth to consist of energies, faculties and habits which directly contribute to
making people industrially efficient, if they are to be known as wealth, they should also be
known as capital.
4) Becker G.
• Human capital is directly useful in the production process i.e human capital enhances
worker’s productivity in all tasks.

5) Schultz T. W.
• Human capital is viewed mostly as a capacity to adapt. Human capital is very useful
when dealing in which there is a changing environment and workers have to adapt to
this.

6) Bowles
 Human capital is the capacity to work in an organization obey orders, in short, adapt to life in
a capitalist society. According to this view, the main role of school is instill is individuals the
correct ideology approach towards life.

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METHODS USED TO COLLECT DATA FOR MANPOWER FORECAST

Forecasting Workforce Needs

The organization’s strategic plan and allied business plan provide guidance as to the number and
type of employees that the organization needs during the planning period. Expansion,
retrenchment, new products or services, introduction of new technology, entrance of new
competitors in the market, economic conditions, employee retirements, workforce turnover, and
so forth must be considered when forecasting workforce needs. Forecasting is the process of
using both historical data and predicted scenarios to determine workforce needs during a stated
planning period. Following is a discussion of several forecasting methods that are often used.
Trend Analysis
Trend analysis involves studying historical organizational employment levels to predict future
employment levels. For example: If, on average, employment levels in the organization have
increase 5% per year, it might be logical to forecast a 5% increase for the next planning period.
A more accurate forecast using this method might be to evaluate trends in separate departments
or other organizational subentities and then aggregate the increases (or, potentially, decreases) at
the organizational level. Doing so provides more specificity as to not only the numbers of
employees but also the types of employees needed.
Trend analysis assumes that history will repeat itself. In today’s more volatile times that might
not be the case. However, trend analysis provides some data on which a final forecast can be
made.
Ratio Analysis
Ratio analysis is a forecasting technique that assumes a set relationship between one variable
and another, and that the relationship allows for the prediction of workforce needs. Assuming no
increases in productivity, an organization might be able to predict total workforce requirements
based on predicted total sales or total productivity. For example: If, historically, it takes five
employees for each 100,000 unit of product produced, a projected increase of 1,000,000 units
per year will require an additional 50 employees.
Organizations often have standard staffing tables that can be used in ratio analysis. As an
example, a restaurant chain would know how many servers, cooks, managers, and so forth are
needed to staff a restaurant. Based on a projected expansion in terms of number of restaurants,
increase in workforce needs can be forecast.
Turnover
Analysis of historical turnover—in reality a type of trend analysis—provides additional data for
forecasts. Average turnover rates provide an indication of the number of new employees
required just to maintain current employment levels. Obviously, turnover is affected by many
environmental factors, most notably unemployment rates, so other variables must be considered
when using these data for forecasting.
Nominal Group Technique
The nominal group technique is a group-forecasting and decision-making method that requires
each member of the group to make an independent forecast prior to discussion of any forecasts.
Members of the group meet and independently develop a forecast. Each member must present
his or her forecast before any of the forecasts are discussed. After all presentations are made and
clarifying questions addressed, the group works to come up with a final forecast.
Delphi Technique
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The Delphi technique is another group forecasting method in which experts independently
develop forecasts that are shared with each other, but in this approach the experts never actually
meet. Each of the members refines his or her forecasts until a group consensus is reached.

TOPIC FIVE: EFFICIENCY AND EQUALITY IN EDUCATION

Efficiency
• Efficiency as applied to education refers to the extent to which education yields desirable
results to the society and its constituent individuals (Ayodo, Gatimu and Gravenir, 1991).
• Efficiency is a functional of two major factors, namely, the level of investment in the
education system and the rate of student flow between entry and exit cut off points.
• The amount of resource spent on education influence its quality and the amount of
learning achieved.
• Efficiency is about raising production and enhancing value for money. An efficiency
gain is made when for a given area of activity, an organization is able to;
i) Reduce inputs for the same outputs (money is released and can be used
elsewhere).
ii) Get greater output or improved quality for same inputs.
• Education efficiency is defined and a measure of how resources allocated to the
educational system (in terms of funds, expertise, human resources and time) are
converted into individual outputs e.g. educational achievements, employability earnings
as well as outcomes for the economy of society.
THERE ARE TWO TYPES OF EDUCATIONAL EFFICIENCY
1) Internal efficiency: relates the outcomes within education & training system e.g course
enrolment & completion rates or average duration of the study.
2) External efficiency: relates to outcomes measured very broadly i.e in terms of increments
to economic welfare or societal outcomes such as improved health, reduction in fertility
etc.

Internal efficiency indicators Include;

i) Net intake rate in the first grade of primary
education.
ii) Grade passing rate
iii) grade failure rate
iv) grade repeater rate

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v) drops out rate

vi) grade promotion rate

Internal Efficiency of Education in Kenya

Assessments of internal efficiency are typically done for a specific level of education; say
primary education and the simplest indicator of internal efficiency is the unit cost of producing
one unit of educational output, which maybe a graduate of that level of education or a student
who has attained a minimum level of knowledge .

 Repetition is a major internal efficiency indicator

• The government policy regarding grade repetition rate is that no child should be forced to
repeat a class.
• Children should only repeat on advice from the teacher after consultation with parents and
the child.
 The average repeater rate was 68.9% in primary (2003).
 The high level of repetition is that when children miss school for many days because
of non-payment of levies, this requires them to repeat so that they can catch up.

Causes of inefficiency in education in Kenya

Internal inefficiency in primary education is indicated by high repetition rates, high dropout rates
and high absenteeism rates. The high repetition rates, dropout rates, and absenteeism as a result
of high poverty rates of the households, hence minimizing the chances of student attending
school because of levies charged in schools

Gender Disparities

The girl child continues to be in vulnerable situation. Parental gender bias, cultural norms,
negative impacts of HIV/AIDS pandemic and poverty continue to impact adversely on the girl
child’s participation in education. The world has made continuous progress towards gender
parity showing that gender differences in education can be overcome through public policy and
changes in attitude, but there is still a long way to go as only 59 out of 176 countries have
achieved gender parity in both primary and secondary education. Gender equality in educational
opportunities and outcomes is the most challenging to achieve and is inherently more difficult to
measure. Clearly much remains to be done. Many Sub-Saharan Countries (Kenya inclusive) are
have miles to go before they achieve gender parity and equity in education (EI, 2009).
Future prospects on the girl child education depends on the following factors if EFA goals are to
be realized: added commitment by all the stakeholders to the girls education, enough and
targeted funding by government and donors to the girl child education, strengthening the gender
unit by allocating enough financial and material resources, strengthening the capacity of the
National Task Force on Gender and Education by allocating financial resources for activities,
incorporating gender programmes in pre-service and in-service teacher training, advocacy for the

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girl child education be intensified, appointment of more women in key administrative positions
at school and policy making level, strategies and plans to address the major disparities identified
at primary and secondary school level be formulated (UNESCO, 2000).

High Poverty Levels

Most countries were hopeful that opportunities provided by strengthened democratic governance,
and improving economies will accelerate progress. However, poverty levels still remain high.
On becoming a republic in 1964, Kenyan leaders vowed to eradicate poverty, disease and
illiteracy. Today the proportion of the population living on less than one US dollar a day, that is
the poverty line, is higher than ever before (Sisule, 2001). With high poverty line, compounded
by economic crisis, prevalence of HIV/AIDS pandemic, it could be just a mere dream to attain
Education for all by 2015. Poverty has been recognized as one of the factor that affects
education.

Teacher Supply and Quality

Delivery of good-quality education is ultimately contingent on what happens in the classroom,

and teachers are in the front line of service. The most important determinant of educational
quality is the teacher. Thus education can be improved through supply of quality teachers (EI,
2009). This remains the role of government. It is estimated that the world will need
approximately 18 million additional primary school teachers

by 2015. The most pressing need is in sub-Saharan Africa, where an estimated 3.8 million
additional posts must be recruited and trained by 2015. This remains a challenging task for
Kenyan government. Today, teacher-pupil ratio is still high and teacher demand and supply
remain a major issue. Good quality education depends in part on reasonable class sizes and
Pupil/Teacher ratios (PTR). Yet the GMR (2008) reveals that there are large regional and
national disparities in PTRs. The approximate ceiling PTR usually used is 40:1, but there are
large regional and national disparities.

Research shows that there are a number of factors that affect teacher demand and supply. One of
the key factor is teacher motivation which is affected by other inherent factors like salary.
According to GMR (2006), many countries face a crisis of teacher morale that is mostly related
to poor salaries, working conditions and limited opportunities for professional development.
Other problems include the doubtful use of contract teachers and the lack of evidence for
introducing performance related pay structures. Kenya is a victim of such. Thus there is all
likelihood that the state of affairs can only persist (as we move towards 2015), hence making the
achievement of EFA by 2015 a mere wishful thinking.

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In regard to teacher deployment, there is need thus to address equal distribution of primary
teachers in districts, carry out registration of all pre-school teachers as a symbol of recognition of
ECCDE have all untrained teachers trained through in-service courses, put in place adequate
staffing norms at all levels to make maximum use of teachers, define the concept of a teacher as
a professional within acceptable professional principles (UNESCO, 2000).

HIV/AIDS Pandemic

In many countries, the devastating impact of HIV/AIDS on education systems continues to be

inadequately addressed in education planning. “In many cases the focus has been on curriculum
reform in education to include teaching on HIV/AIDS prevention rather than an integrated
response aimed at addressing the multiple disadvantages faced by children affected by
HIV/AIDS.” (GMR, p.192). Education systems could play a key role in creating awareness and
curbing HIV/AIDs pandemic and thus increasing school enrolment. For instance in Kenya,
access to medicine for families living with HIV/AIDS has improved school attendance.

Despite this impact, many governments in Sub-Sahara Africa have not even developed policies
aimed at supporting children who live with HIV or who have lost parents to the disease. AIDS-
affected children are failing to go to school, and it’s because their governments are failing them.
In sub-Saharan Africa, there are more than 12 million children orphaned by AIDS, not including
the millions of children whose parents are terminally ill. While overall school enrollment rates
have risen to approximately 66% in the continent, AIDS-affected children have been
systematically left behind. According to the report, children suffer de facto discrimination in
access to education from the moment HIV/AIDS afflicts their family. Children leave school to
perform household labor or to bereave their parents’ death. Many cannot afford school fees
because their parents are too sick to earn a living (HRW, 2005).

HIV/AIDs has not only have had effect on children but also teachers. HIV-related health
problems lead to teacher absenteeism (UNESCO, 2005). Although the government has made
certain effort in catering for their needs of the infected teachers, the impact could still be far
much reaching in terms of provision of quality education.

Inadequate Financial Resources

Financing Education For All (EFA) remains one of the core challenges facing many developing
countries in Sub-Saharan Africa. Most of these governments depend upon donor support which
more often than not, come with strings attached (EI, 2009). These government and oftenly
financially strained due to a number of factors ranging from political and economic instability to
weak governance. Thus they are not able to support sustainable implementation of Education for
all. Kenya continues to face a number of challenges following the introduction of Free Primary
education in 2003 and Free Secondary Education in 2008. These challenges are mainly

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associated with lack of adequate teachers (human resources), and equipment and facilities
(physical resources) (UNESCO, 2005). The root cause of all these challenges is lack of adequate
financial resources. Kenya is not about to be free from its state of ‘need’, thus pushing far the
dream of Education for All by 2015.

EQUITY IN EDUCATION
• When we invest in education both equity and efficiency issues must be addressed.
• From the economic point of view, equity refers to ways in which costs and benefits of
education are distributed among different groups and regions in the country.
• We also consider whether men and female at different socio-economic growth have access
to education opportunities.
• According to Odebero (2002) :
Equity not only refers to distribution or sharing of resources among individuals or
groups but it is also tied to the notion of justice.
He argues that equity is not only based on facts about how resources are distributed but
also on normative judgment about how society should distribute resources.
• The population must therefore be classified into exclusive groups such as
a) Sex
b) Social class
c) Income or any other relevant variable

Types of equity
1. Horizontal Equity
• This refers to equal treatment of equals.
• Its assumed that all individuals are equal and therefore mathematically resources must be
used so that the same resources allocated to region X are also allocated to region Y

2. Vertical Equity
• It refers to unequal treatment of unequals.
• It urges that people are never equal in all ways and must be treated differently in allocation
of resources.
• People have different needs. There are those who require special needs e.g. physically
disadvantaged.

3. Integrated Equity
• It ensures that inequality in one generation is not simply generated in the next generation.
• Equity means that the distribution of resources in education is on one for one basis. It
involves quantitative measure

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Why Inequalities Exist

• Economists and educationists alike want to ensure that the resources allocated to education
are efficiently utilized.
• But when we pursue efficiency goals, equity goals are always sacrificed e.g. as university
admissions economists argue that you admit students according to resources available so
that they are optimally utilized.
• This On the other hand denies the chance the other people who have qualified for
university education.
• This means that more people are being admitted in order to be fair and this leads to the
stretching of resources which affect the quality of education.
• When we use price mechanism or consumer sovereignty to influence, to determine the
demand for and supply of education then equity will be sacrificed.
• People in hardship areas are those from low socio-economic background and may not
access higher and quality education.
• Financing education policies can lead to inequality of government subsidies target
university education more people would enroll at that level.
• Differences in peoples IQs are also causes of inequality.

How education inequalities came up in Kenya.

1. Kabiru Kinyanjui (1981) noted that inequality came in existence due to colonial past. There
was segregation in provision of education. the whites got the best education, Asians got 2 nd best
and Africans got the worst education The legacy remained after independence, schools were
categorized as national school, provincial schools, Harambee schools etc. The national schools
had best facilities while Harambee schools maintained the worst facilities
2. Missionaries also led to inequality in education. They developed certain education
institutions in some parts of the country and not others. In some places where good schools were
established they benefited after independence.
3.Geographical differences
Some regions are well endowed with good natural resources e.g. cash crops and hence accrued
high income. Such regions help the government in setting up schools and facilities.
In some areas, parents cannot even afford fees let alone construction of schools.
4.Inequalities due to rural urban differences
On the average urban areas have more schools, improved facilities and teachers compared to
rural areas.
5. Inequalities due to social economic status
The Kenyan society in itself is stratified. We have the high income class, who enjoy the best
education, they influence admission procedures. The middle income earners and low social
economic classes, their children end up in Harambee schools where only a few survive through
the system.
6. Financing education has also led to inequality. Although primary education is free, there
are other costs that those who cannot meet end up dropping out of school. Such costs include
opportunity cost, cost of uniform etc.
7. The loan scheme at the university doesn’t promote equity in the provision of education
because even those who are not needy are given the loans

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8. Inequalities due to gender

By virtue of one being born a male or a female, one can enjoy certain privileges and
disadvantages based on gender.

How the Government has tried to Ensure Equity

• The government of Kenya in all development plans it has included a chapter on education
sector. As early as 1965, the government came up with sessional paper No.10 entitled
African Socialism and its application to planning in Kenya. Equity issues were well
addressed there in.
• Kamunge report of (1988) on education and training highlighted issues on the less
advantaged. It recommended abolition of schools e.g. Harambee and government schools,
provincial, district schools. Recommended only two categories of schools.
• Introduction of school feeding programmes in arid areas
• Introduction of quota method of admission to some educational institutions
• Introduction of university loans scheme by the government to cater for academically bright
students from poor backgrounds to access education.
• Free primary education policy has also addressed inequitable access to education.
• The centrally planned curriculum where people learn same material all over the country.
Same examination, certificate and staffing which are done centrally to achieve equity.

TOPIC SIX: EDUCATION & EMPLOYMENT

Unemployment
Unemployment is a situation in which demand for labour is lower than the supply of it. People
are actually looking for work at the going wage rate but cannot find it.
• The amount of education an individual receive, not only affects his earnings but the quality
of his employment as well.
• Unemployment represents as underutilization of labour and failure of economic system to
efficiently use its scarce resources.

Effects of Unemployment
Negative effect
• It causes permanent loss of output of goods and service. The unemployed are faced with
financial insecurity, resulting in poverty. Many studies have linked unemployment to family
disruption, suicide, ill health (both physical & mental) drug addiction, homelessness,
malnutrition.
• Unemployment can destabilize business expectations as fears of low demand reduce private
investment. Unemployment can also lead to technological stagnation.
• Unemployment can also lead to political instability.

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Positive effects of Unemployment

It provies the system with a pool of available labour from which to draw as the pace of
accumulation increases.
• Unemployment serves to discipline workers who may not fear being laid off in an
environment of full employment.
• Unemployment holds down wages, since one of the ways in which unemployment disciplines
workers is to decrease their bargaining power and thus keep wages from rising for maximum
profit.

TYPE OF UNEMPLOYMENT
1. Open Unemployment
• This can either be voluntary or involuntary
• People can be physically seen lying out at employment areas. In voluntary open
unemployment people decline to take jobs they are qualified for even though the jobs are
available.
• In involuntary open unemployment, job seekers are qualified and willing to render their
services but vacancies maybe unavailable in the job market.

2. under employment
 Refers to a situation where employed people are not maximumly utilized. They are employed
but there conductivity is lower ‘than their wages, being paid more than their production.
Common in public service in low developed countries and also in overstated schools.

3. Frictional unemployment
• Situation in which labourers take some time and resources to locate employment which
exists.
• Indeed people remain unemployed because they don’t have knowledge of which
employment opportunities exist.
• Major reason being lack of information

4. Structured unemployment
 Comes as a result of structured changes in the country’s economy. A situation arises where
quality of the existing labour force doesn’t conform to the needs of the labour market.

5. Educational unemployment
 Refers to those people who have attained some formal education ranging from primary,
secondary and university level and are not able to find wage employment.

Causes of Educated Unemployment

 Slow employment generating growth
 When the economy is growing at a slower rate than the output of the education systems it leads
to mismatch. The 4-5% economic growth rates are not enough to have a noticeable impact on the
level poverty, especially in relation to the population growth. A yearly maximum of 7% growth
can cut poverty into half. When the economy is not doing well, this leads to low income and job
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creation is limited due to limited investments. Some firms are compelled to close down leading
to job loss. In low developed countries like Kenya, education system are growing faster than
economies cause of political and social reasons.
Disequilibrium in the rate of expansion on various sectors of the economy. There is imbalance
because most funds are allocated to education sector at the expense of other sectors.
 High demographic pressure
High demographic growth has increased youth unemployment. The labour force has grown by
2.9% a year in Sub Saharan Africa, putting intense pressure on the labour market. Sub Saharan
Africa needs to create 8 million new jobs a year to absorb ever increasing number of job seekers.
 Inappropriate Education and training policies
This leads to both skill mismatch and low skill supply. African functional literacy is low relative
to other developing countries. The mismatch is due to the education system in Africa being
tailored to suit needs of civil service because few graduates are absorbed in the private sector.
 No enabling environment for investment
Investment in the private sector as still too low to result in sizeable job creation, despite progress
towards restructuring African economies. Macroeconomics volatility, political uncertainty, lack
of access to affordable credit and high transaction costs have been a major impediment to
investment.
 Stiff competition facing firms in export market
The share of firms producing for exports is small, this is because the have failed to increase the
exports. As globalization intensifies, African firms will have difficulty competing in the global
market.
 Economic choices monitored by politics
This may result in inefficiency and political stability. Bad politics in Africa have often led to
imbalance in resource allocation, especially in public goods. E.g. unequal land distribution, the
key asset supporting employment has increased unemployment and inequality. In some counties
social imbalances have resulted in civil unrest , which in turn has destroyed those countries
economy’s.
 High HIV/ AIDS prevalence
Sub Saharan Africa accounts for 75% of AIDS deaths and the people affected are among the
populations most productive workers e.g. schools, hospitals. Civil service, the mining and
construction sector are losing a large number of their personnel due to AIDS related infections.
 Brain Drain
It reduces the supply of skilled and professional workers which reduces employment
opportunities for semi-skilled and unskilled labour in the production process. Workers leaving
Africa are usually young and highly educated, so the continent loses its most creative force.

TOPIC SEVEN: FINANCING EDUCATION IN KENYA

Education is always financed by
 Public (Government)
 Individuals or parents

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Public financing of Education

In developed countries there is free and compulsory education at both primary and secondary
school levels. In developing countries such as Kenya, even though

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