EAPE 422: PLANNING AND ECONOMIS OF EDUCATION

LECTURER: DR. MBURUGU.J.M

Course Purpose
The course aims at equipping the student with knowledge on planning strategically for
education

Expected Learning Outcomes

By the end of the course, 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
 History and rationale of Educational planning.
 Considerations of Educational planning.
 Professional process of logical steps.
 Types of plans in Educational planning.
 Social and psychological factors in Educational planning in developing countries.
 Approaches (methods) to problems and issues of concern.
 Administrative factors in Educational planning.
 Programme and efficiency of operation in developing countries such as Kenya.
 General concerns of economics and their application to Education: investment,
consumption, capital demand and supply.
 Measures of returns to investment in Education.
 Educational role in economic growth.
 Financing Education.
 Education equity and efficiency.

Teaching/ Learning Methodologies

Lectures, Class discussion, Class presentations, Question and Answer Method,
Demonstrations, Drawing
Course Assessment
Continuous Assessment Tests (CATs) and assignments 30%, End of semester Examinations
70%, Total 100%

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PLANNING
Definition
Educational planning is a process that involves a systematic and scientific set of decisions for
future actions with the aim of achieving set educational goals and objectives through effective
use of scarce resources
Various scholars have defined planning as follows;
Plan-It’s a recommended future course of action
Plan – It is a guide to achieving previously established objectives in an optimum manner
Planning-It’s a process that helps administrators to answer certain questions that are relevant to
decision making process e.g. What is to be done, where shall it be done or when will it be done,
who will do it or how will it be done?
• It’s a rational process of preparing a set of decision for future actions directed at achieving
objectives already set
• Ackoff (1970) Is the process that involves making and evaluating each of a set of interrelated
decisions before action is required in a situation in which it is believed than unless action is
taken, desired future state is not likely to occur

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 • Door 1963 is a process of preparing a set of decisions for action in the future directed at
achieving goals by optimal means
• Kaufman (1972) is the process of determining where to go and identify the requirement for
getting there in the most effective and efficient manner possible
Strategic plan- it’s a document used to communicate organizational goals, action needed to
achieve those goals and all other critical elements developed during the planning exercise
Strategic planning- it’s an organizational process of defining its strategy, or direction and making
decisions on allocating resources to pursue the strategies
Educational planning is a continuous process geared towards ensuring adequate educational
services, quality control/assurances, efficient administrative and management control, adequate
provision of human, financial, time and material resources to power the continued growth and
development of education as a vital sector of any countries economy
Deng in Mbipom (2000) viewed educational planning in terms of formulation of
educational policies and objectives, the compilation of various educational proposals, the
projection of enrolments, compilation of school statistics, educational costing and budgeting,
establishment of new schools and expansion of existing ones
Educational planning according to Droor and Coombs (1969) it’s the application of rational,
systematic analysis to the process of educational development with the aim of making education
more effective and efficient in terms of responding to the needs and goals of the students and
society at large

REASONS FOR STUDYING EDUCATIONAL PLANNING

1. It enhances learner’s knowledge of education as a discipline
2. It helps to determine the objectives and goals of educational system and devises means of
achieving them i.e. enable learners to internalize the process of setting educational goals and
objectives which are essential for educational planning
3. It aligns our limitless needs, desires, expectations and aspirations with our available and
limited resources in pursuit of desirable educational goals. I.e., equips learners with skills for
efficient utilization of available educational resources
4. Enables the teachers to know their role and haw they fit into the whole area of educational
studies and their contribution to human capital development
5. It helps in decision making about the education systems in terms of programmes and
operations
6. Enables the learners to make a comparison of effectiveness of education in respect to other
sectors of economy. i.e. planning ensures that provisions is made for different competing sectors
of the education system
7. Planning helps to reduce and avoid wastage in the educational system

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 8. Investment made in education demands planning to ensure adequate dividends such as
production of goods, well developed students and adequate manpower for the country
9. Planning in education helps to ensure that the quality of education provided meets the
challenges of the global world. i.e. it makes learners aware of the effects of global social,
economic and technical changes

HISTORICAL BACKGROUND AND RATIONALE OF EDUCATIONAL PLANNING

THE DEVELOPMENT OF EDUCATIONAL PLANNING
Education in any country responds to the social, economic, and political objectives of the country
This theory has roots in traditional societies more particularly in the ancient civilization of the
Nile, Athens (capital of Greece) and Sparta (prominent city in Greece)
In these societies, education was meant to suit the aspiration of people and achieve the goals of
the society There was a relationship between education and the philosophy of the society e.g. In
Sparta the aim of education was to produce an ideal citizen soldier who was honest, loyal and
courageous.
Therefore, the education offered included skills in gymnastics, sports and games, dancing and
military training.
Education aimed at producing people who would defend the state.
The development of education planning in Europe started in the 20th century. The concept of
education planning is traced in the young Soviet Union after 1917
After the revolution in 1923 the Soviet Union developed a five-year development plan. It was
one of its kind in which education plan was included.
Before then education was dominated by philosophy whose view was to produce catechists or
priests
Education was also viewed as a means of promoting moral values into the people
In African countries, colonies provided education geared towards producing enlightened labor
force, hence provided education to acquire skills in simple arithmetic, writing and reading useful
on Masters’ farm. Since African education was only meant towards achieving white collar jobs.
This indicates that there was no organized education planning until 1917.

CHARACTERISTICS OF EDUCATION PLANNING BEFORE 2ND WORLD WAR

• Education planning was short range. It only focused on the one-year budget plan
• It was fragmented- that is different parts of education were planned independently
• It was non-integrated - planning of institutions did not have linkages with the economy of the
society.
• It was static- there was no dynamism and education system would not adapt the prevailing
social circumstances
Planning education in the early twentieth century developed in response to the need for
professionals in architecture, landscape architecture, engineering, public health, and law to
understand and address the unique challenges of rapidly growing cities and regions. It was in
the United States and the United Kingdom that the first standalone planning education
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programs flourished prior to World War II. Former colonial nations expanded planning
education initially on the model provided by the West, often because their leading educators
were products of the Anglo-American system. The proliferation of planning education
programs in Eastern Europe, sections of Asia and Africa and especially in China since the end
of 1980s owes to increased global engagements coupled with continuing challenges of
urbanization. Throughout the twentieth century, transnational exchanges of ideas and strategies
have helped to shape the global planning education movement

CONSIDERATIONS WHEN MAKING AN EDUCATIONAL PLAN

What is the general process for developing an Education Sector Plan? The general process for
developing an Education Sector Plan (ESP) involves extensive consultation at every stage. The
development of ESPs is typically coordinated by the Ministry of Education (MoE), with the
engagement of other actors, including development partners. The five steps are described in brief
below, with more detail following.

Step 1: Set up the taskforce

Considerations are:
• Identify all stakeholders.
• Get buy-in from government and other stakeholders (e.g. non-government providers, non-
government organisations (NGOs), teacher unions).
• Identify roles and responsibilities of key actors.
• Ensure a process of engaging key parties from the beginning through to finalisation and release.
For further information refer to The Role of Key Stakeholders in Education and Aid
Effectiveness Principles Foundation and Practitioner level modules.
Step 2: Analyze the sector
Considerations are:
• Identify the information required, which will include
(i) demographic projections impacting on size and distribution of targeted populations,
(ii) enrolment projections,
(iii) educational institutions related data,
(iv) financial data, and (v) relevant government plans and strategies.
• Ensure mechanisms to source and collect required information.
• Identify the roles and budgets of all institutions that shape the education sector.
• Identify any key service delivery areas which might benefit from a costeffectiveness study
to improve value for money.
Step 3: Prioritize policies and programs Establish general goals and specific objectives
(long and short term).
Considerations are:
• Stakeholder consultations.

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 • Identifying key constraints (resources).
• Develop a demographic financial model of the sector. Step 4: Develop the plan
Considerations are:
• Develop program components.
• Plan the budget and timelines of all programs.
• Consult with stakeholders on a regular basis.
• Plan agreed and finalised, following national systems and templates.

STEP 4:DEVELOP THE PLAN

Develop program components
Plan the budget and timelines of all programs
consult with stake holders at a regular basis
Ensure you follow national systems and template

Step 5: Implement, monitor and evaluate

Considerations are:
• Ensure adequate resource allocation for effective implementation, as well as monitoring and
evaluation systems.
• Ensure development of required systems for delegation, action and implementation,
monitoring and evaluation.
• Ensure a specific timeframe for monitoring and evaluation is agreed upon.
Many factors and situational variables impact greatly on our educational system; the
effect of these variables make educational planning imperative. These factors include but
not limited to:
1. The increasing cost of education in Nigeria.
2. The impact of technological development all over the world.
3. The impact of globalization on national development.
4. Unemployment.
5. Social changes.
6. Global citizenship and competitiveness.
7. Inflationary trend.
8. Poverty.
9. Increasing demand for and access to education.

PROFESSIONAL PROCESS AND STEPS IN EDUCATIONAL PLANNING

A planning process/Cycle refers to the changes and activities followed by planners, the task of
translating a thought/idea into a plan and the plan into an operation

STAGE 1: THE NEED IDENTIFICATION

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Involves visiting specific institutions and talking to stakeholders involved to collect data on the
needs that should demand planning.

STAGE 2. FIELD STUDY/FEASIBILITY STUDIES AND SITUATION ANALYSIS.

 Involves collecting credible data from consumers regarding the current situation of
education.
 Data collected to be analyses in order to find facts about the problems identified and then
establish priorities.
 The two stages (I and II) are referred to as preparatory stages of planning.

STAGE 3; drafting of the plan (sometimes called plan formulation).

 Involves the following

 Educational policies and goals.
 Should involve schools of diverse environments eg. Urban, rural ASAl etc ( This reveals
the practical difficulties/hardships to ensure all these are effectively addressed in the plan.

STAGE 4: CONTROL PLAN

 Involves drawing of plan indicating alternative policies, methods and approaches in order
to act as a control experiment and sometimes a point of reference for the planners.

STAGE 5 PILOTING (TRYING OUT THE PLAN)

 Implementation of the plan in a small scale to establish its feasibility ( in selected schools
which must truly represent all categories and types of schools in the nation.
 The cost of achieving them. And the time taken to do so must be measured.

STAGE 6: IMPLEMENTATION OF THE PLAN

Expansion of the pilot programme in large scale to cover the whole nation.

In this stage, all the planning agents ( or implementation agents are supposed to work closely
together eg Government, parents, religious groups, education providers etc.

Things to be done during implementation process

1. A plan should have enough details/should not be sketchy).

2. Plan should be put in very specific and simple manner (not in jaggous or technical
language).
3. There should be very efficient administrative system to ensure coordination of the effrts
of all agents.
4. An efficient system of communication to inform people (citizen of what is on the way in
education.

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STAGE 7: EVALUATION OF PLAN (APPRAISAL)

 This has the purpose of measuring the extent to which objectives are being achieved.
 Compares the plan with actual achievement.
 Considers and relates fulfillment of objectives,
 Setting of objectives- must be clear, specific and achievable.
 Identify a control system (involving leadership eg. Who is the origin and who will lead,
who must be dynamic and innovative enough to ensure success.
 Resource identify action; human resources, financial, material,, physical facilities
 Budgeting and general costing- done with consultation of other experts eg accountants.
 Time scheduling (time tabling) they must set time limitations which a certain stage and
activity will be implemented.
 Establish information system
 Involve establishment of a healthy and efficient communication system both vertical and
horizontal to ensure overflow of information and efficient feedback.

CONCLUSION

It is important to carry out a continuous evaluation in order to help planners to determine

whether objectives are being achieved at various stages and finally an evaluation of the entire
process.

FUNCTIONS OF EDUCATIONAL PLANNING

• Decision making
• Technical function
• Implementation function
• Control function

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a) Decision making
It's carried out by politicians, high ranking influential citizens and professionals in the country.
For instance, in Kenya it is carried out by cabinet secretaries and other professionals. It involves
goal setting and goal approval. For instance, during independence, the government first set
national goals of education which would guide the country on educational development

b) Technical function
It focuses on formation of plans, identification of targets and evaluation of required resources It
is carried out by designated planners who are technicians well trained in statistics and social
sciences
The technicians as found in the Ministry of education and they deal with both the quantitative
and qualitative aspects of educational planning
NB. Give examples of quantitative and qualitative aspect
c) Implementation function
Refers to procedures for fulfilling the plan targets. It's performed by administrators of the system
the national. County and sub county level

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The administrators oversee and coordinate the implementation of plans
d) Control function
It leads to the discovery of discrepancies between actual and planned achievement as well as
identifying the errors and problems experience during the implementation stage

Dimensions of educational planning

• Educational planning must be significant to the community for which they are being made
• Educational plans should be feasible/realistic in relation to technical appropriateness and cost
• Educational plans must be relevant in order to facilitate appropriate implementation
• Educational plans should be definitive/ conclusive i.e., They should specify the maximum
number of contingencies to be given prior consideration
• Educational plans are described as parsimonious. That is, they must be outlines in the simplest
manner possible
• Planning has time dimensions divided into long term, medium term and short term
• Long term planning- it’s also called forecasting and usually take 20 years to be implemented.
The objectives are stated in general terms and materials covered in a
general nature.
• Medium term - referred to as actual planning. They are derived from the long term plans and
they specify when the full results are expected to be achieved. They cover a period of five years
• Short term planning – they are referred to as programming. They obtain direction from the
medium level plans.

APPROACHES (METHODS) TO PROBLEMS AND ISSUES

IN EDUCATION PLANNING

There are two categories of approaches used in educational planning:

1. Classical (traditional) approaches

2. Emergent/Conventional (modern) approaches

Why should these approaches be used in educational planning?

1. The approaches constitutes general Government policies, broad guidelines and goals to
education planning eg the approaches give justification/reason why the expenditure and
allocation of resources to education sector.

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 2. The approaches direct education planners in executing their activities such as setting
priorities, cost and programme timetabling

CLASSICAL APPROACHES

1.Social demand approach

2.Manpower requirement approach

3.Rate of return approach

1.Social Demand Approach:

This approach was used in the Robbins Committee Report on Higher Education in Britain. In
India too, this approach is a popular one while opening new schools and colleges in particular.

In this method are involved the following steps:

(a)To estimate the proportion of students completing school education and are likely to enter into
higher education.
(b)To estimate how many of these successful school leaving students would actually apply for
admission to colleges.
(c)To determine how many of the applicants should be given admission to higher education.
(d)To determine the length and duration of the study.
Thus, the major issue involved in this approach is to forecast future demands for seats keeping
in mind social and educational trends as well as demographic changes. The underlying
assumption in this approach is that expansion of education is beneficial to the economy and
thus, additional expenditure on education would not create a burden too heavy to bear.

This approach is more prevalent in those societies which favour traditional cultural values, where
decisions are taken on the basis of public opinions (in a fragile polity and sometimes in a
democracy) and in societies where the social environment is generally pessimistic in nature.

The approach is based on currently expressed preferences and does not take into account public
expenditure on education vis-a-vis the benefits as the demand for education may far exceed the
resources available in a vast country like India. Also, it sometimes leads to a mismatch between
the output of higher education and the demands of the economy.

LIMITATIONS OF THE APPROACH

1. The approach has no control over factors such as the price of education

2. The approach has no control over absorptive capacity of the economy for the trained
personnel.

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3. The approach does not in any way lay claim to whether the resources expended are
economically allotted and to that extent, the approach is poor.

4. The approach does not provide guidance we need as to how best to meet the identified needs

2.Rate of Returns Approach:

According to this approach, investment in education should take place in such a way that the
returns from the investment are equal to the returns from other kinds of investment of
capital, e.g., investment in industry. This principle is known as ‘equi-marginal returns’ in
economic theory and could be extended to educational sector.

This approach treats education as an investment in human capital and uses rate of returns as a
criterion in allocation of financial resources. The approach implies that if the rate of return is
low, expenditure on education should be curtailed.

However, in reality, it is difficult to apply this approach to education due to problems associated
with measuring rate of returns in education.

An educated person’s earnings or rate of returns depend upon his/her innate intelligence, parental
socio-economic status, motivation and aspirations. Hence, it is not easy to attribute the rate of
returns only to education acquired. Hence, this approach is least frequently applied to
education.

3. Manpower Planning Approach:

In this method, the general demand for and the capacity of supply of human resources in
different streams of and at different levels of the educational sector are estimated.

The approach asserts that the system of education produces the right quality of human
resources with desirable knowledge, attitudes and skills in the right numbers and thus,
education is directly linked with economic development.

The application of the manpower planning approach depends on these factors:

(a) An appraisal and analysis of the existing employment conditions and the system of education,

(b) Planning the system of education vis-a-vis the manpower needs of the economy, and

(c) Using the financial resources (which are limited) in an optimum way so as to fulfill the
demands of the employment sector without incurring wastage on account of unemployment.

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(d) Making an appraisal of the number of students enrolled, the number of existing teachers and
their qualifications, enrolment in teacher education institutions (availability of future teachers),
as well as the existing number of school buildings, equipments, infrastructure and other facilities.

(e) The requirements of the employers regarding occupational and/ or professional qualifications
for employees, their levels of training and abilities should also be assessed.

The manpower planning approach takes note of the fact that the teaching profession requires
approximately 60% of the highly qualified human resources of a country which competes with
the demand for manpower in other economic sectors.

A detailed projection of the demand for human resources is difficult due to the uncertainty of
productivity trends. Some developed countries such as Norway, France and Sweden estimate
their future manpower needs so as to meet the demands of the economy whereas others such as
Great Britain estimate the numbers to be educated on the basis of students’ demands.

ADVANTAGES OF MAN-POWER APPROACH

1. Man-Power could usefully call attention to extreme gaps and imbalances in the education out-
put pattern that need remedy. This does not need elaborate statistical studies.

2. It gives educators useful guidance on how roughly educational qualifications of the labour
force ought to be developed in the future. That is, the relative proportion of people who would
have primary education, secondary education and various amount of post-secondary training.

3. The unemployment and underemployment which may result from some over- emphasis on
man-power approach may become a challenge to move towards the right kind of education
which may be development-oriented, and thereby creating its own job.

WEAKNESSES OF THE APPROACH

1. It gives educational planner a limited guidance in the sense that it does not tell what can be
actually achieved in every level of education e.g. primary education, secondary education, etc

2. The approach says nothing about primary education, which is not considered to be work
connected. By implication, manpower approach suggests the curbing of the expansion of primary
education until the nation is rich enough to expand it. Hence, attention is focused on the cream of
education that will contribute to manpower development in the society

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3. Most manpower needs are mostly needed in the urban employment. Thus, the planner who
may be called to plan is not given any useful clauses about education requirements to those
people like semi-skilled and unskilled workers in the cities and vast majority of workers that live
in rural areas

4. The employment classifications and manpower ratios such as desirable ratio of engineers to
technicians; doctors to nurses etc. and the assumed education qualifications corresponding to
each category of job borrowed ideas from industrialized countries or economy. This does not fit
into the realities of less developed countries of Africa

5. It is impossible to make reliable fore-cast of manpower requirements far enough ahead of time
because of many economic, technological and other uncertainties which are involved.

EMERGENT/CONVENTIONAL APPROACHES

1.Education Output Rates Approach.

In this approach ,a comparison is made of the educated people(output) and the goods and
services (productivity) acquired from these people to determine the value of education

QUESTION

Does increased/investing in education make the learner (educated)

More productive?

2.Simple correlation Approach

Concerned with correlating education expenditure with the gross National Product (GDP) to
enable the country to determine future educational development.

This approach is concerned with planning education within the National budget without making
it too expensive thereby jeopardizing provisions of other national services.

3.Cost Effect Approach

Focuses on the cost change and whether this cost change leads to effectiveness in productivity or
not.

QUESTION

Do high cost schools offer better education and vice versa?

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4.Labour Market Analysis Approach.

This method proposes that Education planning should be dictated by the labour need he principle
here is to reduce imbalances and mismatches in the manpower production. The courses/training
offered in preparation for manpower should be in the area where employment (demand for
manpower)

This approach emphasizes that educational planning should scrap those courses/training areas
where labour market is saturated and increase enrolment in courses which lead to available jobs.

5.The Aggregate Approach

Norms are drawn from international comparisons involving countries with similar features such
as climatic conditions, population rates, educational needs of a given country. These norms may
indicate whether we need similar education, manpower etc.

6.Use of Tracer Studies

This refers to holistic facts.

The approach works on the assumption that history is bound to repeat itself. Therefore, we
should use lessons from the past in order to plan for the future

SIGNIFICANCE/IMPORTANCE OF EDUCATIONAL PLANNING: -

1. To make every programme of an educational institution or organisation grand success.

2. Proper educational planning saves time, effort and money as planning in every field is a
time-saving, an effort-saving and a money-saving activity.

3. Educational planning is a sound method of solving educational problems by avoiding the

trial and error method of doing things.

4. Educational planning is essential for the best utilization of available resources.

5. Educational planning checks wastage and failure and contributes to the smoothness, ease and
efficiency of the administrative process in the field of education.

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6. Through proper planning in education, education can be the best means by which society will
preserve and develop its future value system, way of life of an individual, knowledge, skills and
applications, and culture of the country.

7. Through proper educational planning, the means and ends of the society can be properly
interacted through educational system. It implies that the educational system utilizes a large
proportion of the country’s educated talents and a major part of public expenditure.

8. Educational planning is highly essential for preparing a blueprint or plan of action for
every programme of an educational institution or organisation.

9. Planning in education is necessary for making one’s educational journey goal-oriented and
purposeful.

10. It is essential to maintain, sustain and enhance the thinking process of an individual,
institution or organisation.

11. Planning in education is necessary to highlight the universal aims of education required for
every nation for its development in every respect.

12. To bring total development of a nation in time, in which educational development is one
among its various aspects.

13. To reflect the modern developments like explosion of knowledge, advancement of science
and technology, development of research and innovation while reformulating the aims and
objectives of education in the light of the particular situation a country is facing.

14. It explores and provides the best possible means of making the wide use of available
resources leading to maximum realization of the educational goals.

15. Educational planning facilitates gathering of educational experts, teachers, supervisors and
administrators for taking decision in relation to the realisation of purposes of educational
programme.

16. Educational planning gives equal importance to the purposes of different classes of experts
such as sociologists, economists, scientists, politicians, educationists etc.

CONSTRAINTS OF EDUCATIONAL PLANNING

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1) Youth population expansion: This gives rise to demand in excess of capacity in education.
In developing countries today, the high birth rate, decreasing death rate, unpopularity of family
planning (compounded by sensitive cultural and religious taboos on birth control), etc., make the
countries the centres of the world’s teeming youths. The result is that even bold educational
targets (enrolment projections) very quickly become moving targets, as such targets often find
themselves deficient up to the tune of 45% to 50%. This is more so where the demographic data
(e.g., from population census) are most unreliable and the social demand for education is very
pressing.

2. Wasteful imbalance within the educational system: In most developing countries such as
Nigeria, the educational pyramid shows a very broad base with a very sharp apex, indicating an
acute lack of co-ordination between the primary, secondary and tertiary levels of education. In
addition, the flows of input components such as teachers, buildings, equipment, facilitates, text
books, etc. are difficult to accurately project, schedule or programme. The result is inevitable
discordance, disjunctions and disparities in the plans at the different levels. This is often the
situation in Nigeria where development targets and promises for the various levels of education
are segmented, and often handled by policy makers in isolation. For example, at the launching of
the universal primary education scheme (1976), all efforts were concentrated on the primary
level without corresponding appropriate consideration of the secondary and perhaps the tertiary
levels. What results usually is that the products of the primary schools would find inadequate
spaces, facilities or programmes to meet their demands at the secondary level.

3. The rising costs of education: The major concern of educational planning and, in fact,
policies is the optimization of resources, and such optimization leans heavily on costs. But when
owing to political and other pressures, there are unprecedented rises in student enrolment, the
facilities required and the services demanded, When the budget is unable to keep up with the
costs, planning becomes pointless.

Many of the educational expansion initiatives in various nations (as is seen in some states of
Nigeria) do not undergo appropriate economic feasibility testing since it is assumed that the
necessary funding will somehow materialize. But as should be expected, the necessary means
fail to arrive, educational planners are constrained to either cut back the initial targets (which the
politicians will reject on political grounds) to lower the efficiency level expected by improvising
or “managing” the essential facilities, or to spread the available resources (teachers, funds,
facilities, plant, etc.) over a greater number of educational services. Such measures invariably
lower the quality of education.

4. Inadequate planning facilities: Planning facilities comprise such things, as qualified staff
(trained data analysts, programmers, evaluators, etc.); essential planning equipment (computers,
office spaces, tools, etc.); and systemized procedures for processing plans.

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Inadequacies of these facilities or lack of the educational planning process adversely affect
educational process. In Nigeria specifically, the above constraints are apparent.

There are in addition certain other constraints to educational planning which are related to the
unique historical, political, administrative and social circumstances of the country. These
include:

(5) Historical: The European missionaries who brought education to Kenya dominated its
management up to the end of the end of Mau Mau struggle for independence when all schools
came under the state control. Prior to 1963, the educational system as a whole was characterized
by plan lessness. Even with the government take over of the schools, educational planning has
not been accepted as one of the most crucial activities (for example as crucial as political
expediency) in educational development.

(6) The blurred vision of educational planning: The idea of educational planning appears to
have come from public administration as the government’s interest in education grew.
Originally, educational planners were deployed from the Ministry of Economic Development
and Planning. These attachees who were basically technical experts formed the nucleus of the
planning division of the Ministry of Education. The planners saw their roles in the Ministry of
Education as that of data collection, preparation of statistics (mainly graphs, charts on school
population and materials), and construction of quantitative plans on idealized educational
programmes for the minister or politicians responsible for educational matters.

Such educational plans and graphs were expressed in broad and highly technical terms often
unrelated to any specific educational issues or situations. The school administrators had trouble
locating comparable or equi-potential parallels or concerns to the assumptions in the plans when
they were publicized by the government. The planners and administrators had unrelated, non-
communicating functions. As a result, there was often a negative correlation between the
activities of professional planners and those of school administrators. In such a situation where
planning and administration were regarded as parallel functions, where the planner was only
responsible to the political interest group and had no direct involvement in the milieu in which
education occurred, gaps inevitably occurred between planning and implementation.

(7) Political instability: This has tended to characterize the African scene since the early
seventies, and Kenya has not been an exception. The quality, stability or continuity of the
political leadership tended to affect the quality and reliability of development plans and National
Education Council (NEC) acted as more or less occasional advisers to the government and did
not, therefore, see their roles as that of commitment on a continuous basis. Recently, however,
the planning division of the Ministry of Education has been reinforced with experts in
educational planning, and their roles are becoming more clearly defined, continuous and more
effective.

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(8) Inadequate information: This emanates from the absence of valid data on which useful
educational plans can be based. Population census data are usually good sources of data, but
these had ended up in deadlocks and doubts.

CHARACTERISTICS OF A GOOD EDUCATION PLAN

Education is the key that unlocks the door for the development of any nation. It is the
instrument that facilitates political, economic, social and technological development of a
country. For education to play its key role on the transformation of a nation, it needs to be
adequately and effectively planned because a faulty educational planning can jeopardize a
country’s development for decades. Therefore, the importance of educational planning cannot
be over-emphasized.
A good and effective educational planning should have the following features:
1. It should be dynamic: We are living in asociety and environment that are not static
and changes occur daily. Educational planning should be dynamic in order to keep
pace with changes in the society.
2. It should be comprehensive: Planning should take the overall view of the entire
educational system. If planning is concerned with national educational system, the
overall view of the national educational system must be done in order to have
adequate information for planning. If the planning is for one level of education, for
example,secondary education, an overall assessment of the secondary educational
system must be carried out.
3. Educational planning should be integrated: This implies that educational planning
should aim at maximizing output through the use of limited resources. Efforts should
be made to link the various planning operations and the focus should be to improve
the outcome of educational services provided.
4. Educational planning should be iterative: Planning should require redefining
educational goals and objectives because of serendipity and unforeseen obstacles. The
planning should be flexible to give room for adjustment.
5. Planning should provide for exploration of alternatives: This would enhance
choice of possible alternatives, in terms of methods, strategies and approaches for
effectiveness and efficiency.
6. Educational planning should be goal-oriented: It should focus on achievement of
set educational goals and objectives. Planning should be based on clearly defined
goals that are simple and easy to understand.
7. Educational planning should be future-oriented: It should focus on the
improvement of future educational development.
8. Educational planning should be pragmatic: This means that the plan should be
good and effective. The pragmatic nature of educational planning can be evaluated by
how good the plan is and how well it is implemented.

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9. Planning of education should be a continuous process that takes into consideration
current changes in the society.
10. Educational planning is a deliberate action It does not happen by accident.
11. Educational planning is a formal activity. It has a structured plan and some procedures
in a written form to follow.

TYPES OF PLANNING
Types of planning refer to forms of educational planning adopted by planners in
conjunction with the polity to map out the direction of future education of a country within a
specified time-frame. Planning is a rational process of decision making aimed at achieving set
goals in the future. It is a deliberate action involving prediction of the future and arranging
the means and procedures for achieving set target. The various types of planning based
on
classification include
1. Planning by time horizon
Planning under this classification specifies clearly the time -frame for the
implementation of the plan. It includes long-term planning, medium -term planning and
short-term planning.
a) Long-term planning: This type of planning is usually carried out by top management
of an enterprise or school organization. It covers a period of 5-10 years and above. It
is strategic in nature and deals with matters relating to diversification of school
curriculum and planning for effective and quality instruction in schools. A typical
lexample of long-term planning in education was the 10-year education plan of 1944
in Nigeria.
b) Medium-term planning: This type of planning defines the future goals and objectives
of education with greater clarity and provides clear-cut strategies and procedures or
action plans for achievement of future targets. It covers a period of 2-4 years.
Example is the 2016-2019 education plan by the Burhari’s administration aimed at
repositioning the Nigerian education system to play a central role in the federal
governments’ philosophy of change.
c) Short-term planning: This is a type of planning designed to achieve immediate future
goals. It covers a time frame of one year or less than one year. It helps the
organization to progress gradually to achievement of long-term goals. Examples
include planning to make school personnel ICT compliance and planning for inter-
house sports competition in school.

2) Planning by time Dynamism

a) Rolling-term planning: This involves extending the time frame of a plan for one year
at a time based on the extent of the success of the plan implementation. It involves the
continuous revision of the plan target in relation to performance and maintenance of
constant plan period (Okwori, 2011). This means a plan that is not accomplished
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during the specified time frame is rolled over into another period or year. In other
words, rolling term planning rolls over a new year and add one year each time to
replace expired one in terms of tasks to be accomplished. The rolling plan tends to
eliminate the need for short-term plan.

b) Fixed term planning: This has a specific duration of years such as 3 years or 5 years
and it has fixed targets and objectives to be accomplished within a fixed period of
time. Fixed term planning provides for relative stability within the educational system
with regards to policy design and implementation.

3) Planning by management level

a) Strategic Planning: This is normally developed by top level management. It sets the
direction of education which a country wants to proceed in future. It involves time
duration of more than one year and in most cases ranges from 3-5 years. Strategic
planning usually involves setting up of future educational goals and objectives by top
management or executive level (e.g ministerial level). The future target is on long-
term survival of the system, resources, human potentials, flexibility and adaptability
to changing conditions in the environment or educational system. Strategic planning
provides a set of decision that gives direction for task performance, activities and
programmes at the lower level of management. It is result-oriented and involves
participatory decision making, accountability and openness to change. It takes into
account interactive planning, performance monitoring and flexible plan
implementation. Strategic educational planning is therefore a systematic planning of
the direction and total resource of an educational system so as to achieve specified
objectivesover the medium to long-term. It can take place at the top management of a
country’s educational system as well as at the management level of an educational
institution (e.g. University). A typical example of a strategic educational planning was
the 4-year strategic plan for the development of education sector in Nigeria, 2011-
2015.
b) Tactical planning
It is a systematic determination and scheduling of the immediate or short-term
activities required to achieve the objectives of strategic planning. Tactical planning is
done by middle level mangers such as Deans of Faculties, Heads of Departments or
units and Directors of Institutes in a university. In tactical planning managers outline
what the various units or parts will do for the institution to successfully achieve
strategic goals and objectives in the future. Tactical planning is a short-term planning.
Tactical plan is used to explain and interpret the goals of strategic plan to operational
personnel. Examples of tactical planning include planning on how to train
examination officers for collecting examination grades from lecturers after two weeks
from date of examination and training of teaching personnel on quality instructional
delivery. Tactical plans are narrower in scope than the strategic plans but their
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objectives must align with the objectives of strategic plans.
c) Operational planning: Operational planning involves planning activities that facilitate
the accomplishment of everyday activities of first-level or low level managers in an
institution or enterprise. Planning here involves work scheduling, preventive-
maintenance scheduling and the design of work methods. Operational planners
include vice principals, teachers, school prefects, games masters, guidance
counsellors etc. They are the real implementers of the strategic plan.
d) Standing planning: This is a type of planning that produces a plan which seldom
changesand is used year after year. Standing plans include policies, procedures, rules
and other repetitive-use plans.
e) Single-use planning: This is a type of planning that involves planning one activity or
project and is used up once the activity or project is completed. Example is planning
to raise fund for the purchase of a school bus.

4. Planning by scope
Planning by scope include
a) Macro-planning
b) Micro-planning
a, Macro-planning
This is planning at the national and state levels. It is aimed at achieving national
success and high productivity in education. It is also aimed at ensuring that the quantity and
quality of resource inputs produce high outputs at minimum cost. The components of macro-
level planning include policy formulation,financing of education, integration of education
into the national development plan, education reform,teacher education and administrative
strategies for implementation of the plan. It requires a detailed budgetary plan. Macro
planning takes into account national perspective of education.
b) Micro-planning
This is planning at the local government level or institutional level. Micro-level
planning of education is aimed at efficiency while macro-planning is aimed at effectiveness.
This type of planning focuses on the inputs and processes of educational practice. It deals
with educational problems at the institutional level. It tries to ensure appropriate combination
of educational resources with processes so as to obtain high productivity Okwori (2011)
states that micro-planning deals with the problems linked to access to the educational system,
acquisition and maintenance of teaching facilities and equipment, attitude of parents, pupils
and teachers to education. Other areas of concern in micro-planning include planning for
recreational services, health and safety, guidance and counseling services, organization of
school programmes and curriculum implementation. It also deals with school mapping.
Generally, educational planning at the micro-level deals with the problems of education at the
institutional level.

5. Planning by approach
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Under this classification, there are two types of planning
a) Proactive planning: This type of planning involves designing appropriate and suitable
course of action in an anticipation of changes in the society or relevant environment that may
affect the educational system. This type planning allows decisions to be taken in advance
concerning changes.
b) Reactive planning: Reactive planning involves the process whereby future action is
dictated as a response to an already occurring event. In other words, educational problem has
already erupted or emerged before action plan is put in place for future reoccurrence.

6. Planning based on degree of formalization

There are two types of planning under this classification. They are
formal planning and informal planning.
a) Formal planning: This is a structured plan that has well documented procedures and
strategies to follow in executing the plan. An example is a 5-year development plan of
a country. Well planned techniques are used in formal planning.
b) Informal planning: Informal planning is a type of planning without definite attribute
or coordination. The planning does not have a defined framework for action and work
is done as it occurs. There are no documented procedures to be followed. However,
informal planning occurs in the mind of the manager. Innovative tools and techniques
are used in informal planning. It is unstructured and no record is maintained for future
purpose.
7. Development planning
This type of planning involves a systematic ordering of a nation’s priorities. It deals
with economic,political and social development of a country. It can be classified into
two phases that include sectoral planning and sectional planning.
Sectoral planning is the first step in development planning. It focuses on allocating the
available resources of a country to the different areas of development that include
education, agriculture, health, defense etc. Appropriate formulae need to be usedhere
to allocate the resources because of the competing demands of the various sectors of
the economy.
Sectional planning involves planning within each sector of the national
development e.g. health, education etc. Educational planning finds it expression in
sectional planning.

Other types of planning include

a) Corporate planning
b) Functional planning
c) Participatory planning

a) Corporate planning
Corporate planning is a process used to map out a course of action that will result in
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revenue growth, increase profits and quality output. Effective corporate planning requires the
planners to gather data about the projected growth of an industry or the projected education
needs of the country taking into consideration the strengths and weaknesses of the current
educational system. Planners start by analyzing these needs and also determine how to create
services to meet these needs. The next step is to formulate goals and objectives which may
include revenue targets. This step is followed by designing strategies and action plans for
implementation. Action plans are specific activities that are to be performed in order to
achieve set goals and objectives. Corporate planning determines the long-term objectives of
an organization or a system. It generatesplans to achieve these objectives. It is really future
oriented and well integrated. Corporate planning is based on activities to be covered in the
plan. Therefore, it is a systematic approach to clarifying corporate objectives, strategic
decision-making and checking progress towards objectives. Corporate planning is sometimes
called strategic planning.
b) Functional planning
This is the type of planning undertaken for sub-functions within each major function.
It is derived from corporate planning and it is segmental in approach. This form of planning
is aimed at ensuring the smooth working of an enterprise, taking into consideration the needs
of each unit and department in the organization. It is also focused on ensuring quality
management practices for corporate function. It involves functional guidance of managers In
other words; managers must be told what to do in order to properly manage corporate
functions in the organization. The goals of functional planning must be set in such a way that
they are meaningful, achievable and measurable. Functional assessment method needsto be
put on ground. Assessment should compare the goal setting and goal achievement.
c) Participatory planning
This form of planning takes into account the functional involvement of every area of a
nation’s economy. It also involves representatives of education stakeholders such as
government, community, pressure groups, students,teachers, employers of labour, interested
individuals and corporate organizations in the planning process. Any planning process that
calls for inputs in terms of ideas, knowledge and opinions from various sections of the society
is participatory planning

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FACTORS AFFECTING EDUCATIONAL PLANNING IN DEVELOPING COUNTRIES

The factors affecting educational planning revolve around social, economic, political and
psychological
• Existing educational policies. Most of educational policies in Kenya are based on political
patronage rather than technical grounds. This affects planning e.g. Establishment of schools in
many developing countries is determined on the basis of political patronage rather than technical
grounds such as concentration of schools, age, population, location size of existing schools,
transportation and other infrastructural facilities.
The interference of politicians frustrates the effort of educational planners which would have
brought change desired by the majority of people. For instance, the development of CDF schools
grossly ignores the suggestion of educational planners.
• Inadequate funds
Most developing countries have no adequate resources to allocate in various sectors of the
economy. For instance, in Kenya 30% of the national budget is allocated to education sector
which has to be distributed to all the three sectors of education. Even within the sector, the funds
have to be distributed for infrastructure, teaching and learning materials, salaries and teachers’
education. The challenge facing the planners is how much should be in each sector and section of
education
This leads to thinly spread of education resources, hence having little impact, hence affecting the
quality of education
• Inaccurate population data
In most cases, data on population is inaccurate because individuals tend to give wrong
information on their ages e.g. Women tend to underreport their age, while men tend over report
their ages. Either way it works to their advantage. This makes it difficult for education planners
to adequately forecast school enrollment by age and even by sex. Hence difficult to estimate the
number of classrooms, books, desks, and teachers that will be needed for the planning year. They
also cannot determine the amount of money required, where it will come from, how and when
they will be spent.
• Shortage of physical facilities/resources
With an absence of funds leads to minimize development because other facilities and resources
cannot be acquired. For instance, due to scarcity of funds some schools in pastoralist, arid and
semi-arid areas or in slums have semi-permanent building Science based subjects lack well
equipped laboratories. This affects the quality of education
• Non-involvement of educational planners of government
At independence, there was a shortage of qualified personnel e.g. The inspectorate and other
people charged with supervisory roles. However, Currently the major problem is non-
involvement of the planner by politicians

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 • Time elemen
Producing people with skills requires time. This means that as people undergo training work will
not be done. As graduate trainees undergo training the number of enrollment increases, hence
surpassing the number of graduate being trained.
• Slower economic growth in less developed countries
• Ever increasing social demand for education
• Lack of political will and support
• Lack of collaboration between labor market institutions and training organizations

POSSIBLE SOLUTIONS
• Political authority to create an enabling environment for educational planner and adapt their
recommendations
• Educational planner to have a clear idea as to what their responsibilities are
• Serious attention should be directed towards the development of clear educational policies and
priorities so that educational planners have a better notion of what they are planning
• Policy makers must refrain from creating the development alternatives and political decisions
rather than a technical matter.
• Educational administrators must actively support changes in educational planning.
• Generally, there should be mutual coordination of all those concerned with the development
of education as a whole
• Reduce corruption
• Public sensitization to give accurate data
• Involve all stakeholders when planning for education, e.g. Involving employers

SOCIAL AND PSYCHOLOGICAL FACTORS AFFECTING EDUCATION PLANNING

 Funding and budgeting

This includes all the money allotted toward salary, infrastructure, purchases, benefits,
maintenance, and every other expenditure for a specific period of time. This period of time is
called a fiscal year. By definition, a fiscal year is the length of time that a budget is supposed to
last for an educational year.
 The human factor
Outsourcing and in-sourcing workers means finding enough people to man the different needs-
based services that either provide the education, protect the premises, or maintain the grounds.
Think of the amount of teachers needed to educate. Add to that the slots for the people who will
support the mission of the organization by providing the teachers with what they need. Then,
think about the other stakeholders in the community at large. All of these factors are equally
important in the long run.

 Laws
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 There are such things as educational laws that protect both students and educators. As such, legal
protection is also an expenditure to think about. Laws also dictate work hours, hourly wages,
licensing and workman's compensation among many other things.

 School Board regulations

While educators meet and plan for curriculum and standards, the school board acts as a major
political force that curbs, moderates and votes in favor or against changes made to the
educational system. In some states the school board has as much power as to fire and hire
superintendents and principals. Some school boards have the power to forbid the teaching of
some things over others. As they are members of the community voted in by other board
members, there are allegiances and circles of trust that directly affect educational planning.

 The community
The community must be taken into consideration as far as the services it will need, the type of
infrastructure it can support, the resources that can be found, and the demographics of the clients.
A high-risk community cannot support or be educated by an institution that cannot meet its
immediate needs. This in no way implies that high-risk communities (where there is high crime
and minimal parental support) cannot be rehabilitated through education. It CAN. However, to
get to a point of total change, small steps of immediate importance must be met. These include
safety and security, meeting nutritional needs, addressing special populations, language services,
and much more.

ADMINISTRATIVE FACTORS IN EDUCATIONAL PLANNING

1. Structural factors
2. Operating factors
3. Expertise of managers in regard to implementation of plans
4. Adequacy of required resources
5. Political interference
6. Inefficiency in supervision, monitoring and evaluation of progress

ECONOMICS OF EDUCATION
Education economics or the economics of education is the study of economic issues relating
to education, including
 the demand for education
 the financing of education
 provision of education
 In addition, the comparative efficiency of various educational programs and policies.

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 From early works on the relationship between schooling and labor market outcomes for
individuals, the field of the economics of education has grown rapidly to cover virtually all areas
with linkages to education.
Education as an investment
Economics distinguishes in addition to physical capital another form of capital that is no less
critical as a means of production – human capital. With investments in human capital, such as
education, three major economic effects can be expected.

 increased expenses as the accumulation of human capital requires investments just as

physical capital does,
 increased productivity as people gain characteristics that enable them to produce more
output and hence
 return on investment in the form of higher incomes.
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
Returns on investment
Human capital in the form of education shares many characteristics with physical capital.
 Both require an investment to create
 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 it is worthy 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.
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 uneducated 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, as is shown by the upper left
figure. It is less clear, however, how much of a high GDP is explained by education. After all, it
is also possible that rich countries can simply afford more education.
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To distinguish the part of GDP explained with education from other causes, economists have
calculated how much one would expect each country's GDP to be higher based on the data on
average schooling.
Educated workers can bring new technologies, methods and information to the consideration of
others. They can teach things to others and act as an example. Among the benefits of education
include the effects of personal networks and the roles educated workers play in them.
These benefits from human capital are one explanation for why governments are involved in
education. If people were left on their own, they would not take into account the full social
benefit of education – in other words, the rise in the output and wages of others – so the amount
they would choose to obtain would be lower than the social optimum.
Demand for Education
The dominant model of the demand for education is based on human capital theory. 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). An increase in human capital can follow technological
progress as knowledgeable employees are in demand due to the need for their skills, whether it
be in understanding the production process or in operating machines. Studies from 1958
attempted to calculate the returns from additional schooling (the percent increase in income
acquired through an additional year of schooling). Later results attempted to allow for different
returns across persons or by level of education.
Statistics have shown that countries with high enrollment/graduation rates have grown faster than
countries without. The United States has been the world leader in educational advances,
beginning with the high school movement (1910–1950). There also seems to be a correlation
between gender differences in education with the level of growth; more development is observed
in countries that have an equal distribution of the percentage of women versus men who
graduated from high school. When looking at correlations in the data, education seems to
generate economic growth; however, it could be that we have this causality relationship
backwards. For example, if education is seen as a luxury good, it may be that richer households
are seeking out educational attainment as a symbol of status, rather than the relationship of
education leading to wealth.
IS EDUCATION ACONSUMPTION OR AN INVESTMENT?
Education as an investment
Education is viewed as an investment particularly in developing countries like Kenya where
unemployment is a critical issue. The society invest huge amount of resources to empower their
children in terms of education advancement with the focus of getting monetary returns after
completion of the studies in terms of well paying jobs.
Education as a consumer good

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When education is offered just for the sake of acquiring the education for improvement of human
resource and not necessarily for monetary gain as key focus, education is therefore regarded as
consumption. This is the focus for developed countries.

Financing and Provision of education

In most countries school education is predominantly financed and provided by governments.
Public funding and provision also plays a major role in higher education. Although there is wide
agreement on the principle that education, at least at school level, should be financed mainly by
governments, there is considerable debate over the desirable extent of public provision of
education. Supporters of public education argue that universal public provision promotes
equality of opportunity and social cohesion. Opponents of public provision advocate alternatives
such as vouchers.
Pre-primary education financing
Compared to other areas of basic education, globally comparable data on pre-primary education
financing remain scarce. While much of existing non-formal and private programmes may not be
fully accounted for, it can be deduced from the level of provision that pre-primary financing
remains inadequate, especially when considered against expected benefits. Globally, pre-primary
education accounts for the lowest proportion of the total public expenditure on education, in spite
of the much-documented positive impact of quality early childhood care and education on later
learning and other social outcomes.

Education Production Function

An education production function is an application of the economic concept of a production
function to the field of education. It relates various inputs affecting a student's learning (schools,
families, peers, neighborhoods, etc.) to measured outputs including subsequent labor market
success, college attendance, graduation rates, and, most frequently, standardized test scores. The
original study that eventually prompted interest in the idea of education production functions was
by a sociologist, James S. Coleman. The Coleman Report, published in 1966, concluded that the
marginal effect of various school inputs on student achievement was small compared to the
impact of families and friends. Later work, by Eric A. Hanushek, Richard Murnane, and other
economists introduced the structure of "production" to the consideration of student learning
outcomes. Hanushek et al. (2008, 2015) reported a very high correlation between "adjusted
growth rate" and "adjusted test scores".
A large number of successive studies, increasingly involving economists, produced inconsistent
results about the impact of school resources on student performance, leading to considerable
controversy in policy discussions. The interpretation of the various studies has been very
controversial, in part because the findings have directly influenced policy debates. Two separate
lines of study have been particularly widely debated. The overall question of whether added

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funds to schools are likely to produce higher achievement (the “money doesn’t matter” debate)
has entered into legislative debates and court consideration of school finance
systems.Additionally, policy discussions about class size reduction heightened academic study of
the relationship of class size and achievement.

Estimates of the rates of return to education

There exists now a great wealth of empirical literature on the returns to education. Consequently
a detailed picture has emerged on how returns are distributed across countries at different stages
of development, for different levels of education and across different groups.
Overall returns
Some estimates of social rates of return show that, on average, one additional year of education
yields a global average rate of return of around 10% (Psacharopoulos, 2004), which compares
very favourably with alternative investments.
Returns to different types of education studies
On returns specific to different types of studies, Psacharopoulos (1994) and Psacharopoulos and
Patrinos (2004) report that private returns to tertiary education are highest for engineering, law
and economics, and that average returns are higher for women at all levels, except primary
education
Returns to different levels of education
Globally, according to Psacharopoulos and Patrinos (2002), average social returns are 18.9% for
primary education, 13.1% for secondary education, and Chapter 2 Returns to investment in
human capital: literature review London Economics August 2005 17 10.8% for tertiary
education.

The Role of Education in Economic Development!

Till recently economists have been considering physical capital as the most important factor
determining economic growth and have been recommending that rate of physical capital
formation in developing countries must be increased to accelerate the process of economic
growth and raise the living standards of the people. But in the last three decades economic
research has revealed the importance of education as a crucial factor in economic development.
Education refers to the development of human skills and knowledge of the people or labour
force.
It is not only the quantitative expansion of educational opportunities but also the qualitative
improvement of the type of education which is imparted to the labour force that holds the key to
economic development. Because of its significant contribution to economic development,
education has been called as human capital and expenditure on education of the people as
investment in man or human capital.

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Speaking of the importance of educational capital or human capital Prof. Harbison writes:
“human resources constitute the ultimate basis of production human beings are the active agents
who accumulate capital, exploit natural resources, build social, economic and political
organisations, and carry forward national development. Clearly, a country which is unable to
develop the skills and knowledge of its people and to utilise them effectively in the national
economy will be unable to develop anything else.”

Education and Economic Growth:

Several empirical studies made in developed countries, especially the U.S.A. regarding the
sources of growth or, in other words, contributions made by various factors such as physical
capital, man- hours, (i.e., physical labour), education etc. have shown that education or the
development of human capital is a significant source of economic growth.
Professor Solow who was one of the first economists to measure the contribution of human
capital to economic growth estimated that for United States between 1909 and 1949, 57.5 per
cent of the growth in output per man hour could be attributed to the residual factor which
represents the effect of the technological change and of the improvement in the quality of labour
mainly as a consequence of education.
He estimated this residual factor determining the increase in the total output on account of the
measurable inputs of capital and labour (man-hours). He then subtracted this figure from the total
output to get the contribution of residual factor which represented the effect of education and
technological change, the physically immeasurable factors.
Denison, another American economist made further refinement in estimating the contribution to
economic growth of various factors. Denison tried to separate and measure the contributions of
various elements of ‘residual factor’.
According to the estimates of Denison that over the period 1929-82 in the USA during which
total national output grew at the rate of 2.9 per cent per annum, increase in labour input
accounted for 32 per cent, the remaining 68 per cent was due to the increase in productivity per
worker.
He then measured the contributions of education of per worker, capital formation, technological
change and economies of scale. Denison found that 28 per cent points of contribution to growth
in output due to growth in labour-productivity was due to technological change, 19 per cent
points due to capital formation and 14 per cent points due to education per workers, and 9 per
cent points due to economies of scale. It is thus clear that education and technological progress
together made 42 per cent (14 + 28) contribution to growth in national product .

Rate of Return Approach:

The contribution of education to economic growth has also been measured through the rate of
return approach. In this approach rate of return is calculated from expenditure made by
individuals on education and the measurement of the flow of an individual’s future earnings
expected to result from education.

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The present value of these is then calculated by using appropriate discount rate. This method has
been used by Gary S. Backer who measured income differential arising from the cost or
expenditure incurred on acquiring a college education in the United States. His estimates show
that the rates of return on education in the U.S.A. for urban white population were 12.5 per cent
in 1940 and 10 per cent in 1950.
Renshaw also adopted this approach. He used Schultz earlier estimates of total earning foregone
and expenditure (cost) incurred in acquiring high-school, college and university education in the
U.S.A. He estimated that the average return on education ranged between 5 and 10 per cent for
the period 1900 to 1950 in the U.S.A.
It is worth noting that estimates of rate of return on investment in education are based upon
private rates of returns to individuals receiving education. However, by assuming that differences
in earnings in a market economy reflect differences in productivity, the rate of return on
investment in education is taken to be the effect of education on the output of the country.
Expenditure on Education and Income:
Another approach to measure the contribution of education is based upon the analysis of the
relationship between expenditure on education and income. Using this approach Schultz studied
the relationship between expenditure on education and consumer’s income and also the
relationship between expenditure on education and physical capital formation for the United
States during the period 1900 to 1956. He found that when measured in constant dollars, “the
resources allocated to education rose about three and a half times (a) relative to consumer
income in dollars, (b) relative to the gross formation of physical capital in dollars”.
This implies that the “income elasticity” of the demand for education was about 3.5 over the
period or, in other words, education considered as an investment could be regarded as 3.5 times
more attractive than investment in physical capital. It may, however, be noted that these
estimates of Schultz only indirectly reflect the contribution of education to economic growth.
In our above analysis we have explained that education is regarded as investment and like
investment in physical capital, it raises productivity of the labour and thus contributes to growth
of national income. The increased earnings or higher wages made by more educated workers
have been considered as benefits not only to the private individuals, but also to the society as a
whole. This is because higher earnings presumably reflect higher productivity, increased output
in real as well as monetary terms.

Consumption Benefits of Education:

We have explained above the investment benefits of education and therefore its effects on
productivity and national output. But investment benefits are not the only benefits flowing from
education. Education also yields consumption benefits for the individual as he may “enjoy” more
education derive increased satisfaction from his present and future personal life.
If the welfare of society depends on the welfare of its individual members, then the society as a
whole also gains in welfare as a result of the increased consumption benefits of individuals from

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more education. Economic theory also helps us in quantifying the consumption benefits derived
from education.
In economic theory, to measure the marginal value of a product or service to a consumer we
consider how much he has paid for it. An individual would not have purchased a product or
service if it were not worth its price to him. Besides, an individual would have bought more units
of a product if he thought that the marginal utility he was getting was more than the price he was
paying.
Thus relative prices of various products reflect the marginal values of different products and the
amount consumed of various products multiplied by their prices would, therefore, indicate the
consumption benefits derived by the individuals.
It may, however, be pointed out that the prices in a free economy are influenced by a given
income distribution and the presence of monopolies and imperfections in the market structure
and therefore they do not reflect the true marginal social values of different goods.
However, an objective measure of consumption benefits of education may be difficult and has
yet to be found out, but it should not lead any one to ignore the consumption benefits of
education and its policy relevance. It may also be noted that, according to the new view,
economic development is not merely concerned with the growth of output but also with the
increase in consumption and well-being of the society. Therefore, consumption benefits of
education may also be regarded as developmental benefits.

External Benefits of Education:

We have explained above the investment benefits and consumption benefits flowing from more
education both for the individual and for society. The analysis of benefits has been based on the
assumption that private interests of individuals are consistent with the social good.

MEASURING EFFICIENCY IN EDUCATION

The word efficiency appears to have originated from Economics. The concept arose from the fact
that every organized human activity start by defining the objectives to be achieved or output
expected. In order to achieve the objectives, certain inputs must be available.

Efficiency, according Arinze in Bosah and Eneasator (1996: 1974) is defined in terms of the
optimal relationship between inputs and outputs in an enterprise. We usually say that an activity
is performed efficiently if a given quantity of outputs is obtained with a minimum number of
inputs or, alternatively if a given quantity of inputs yields maximum outputs.

This concept can be applied on education to establish the efficiency of education in regard to
output of learners as they go through one level of education to another

Education is a very significant sector in any economy. The gains from education include the
formation of human capital necessary for both private and public sectors. Despite increased

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government funding in education, many pupils in schools do not benefit due to drop outs,
absenteeism and repetition. This leads to wastage and hence affects internal efficiency in
education.

Despite introduction of free primary education and free tuition in secondary schools, the idea of
achieving perfect internal efficiency in education in Kenyan public schools has not been
achieved. There is still significant loss of public resources through many forms in schools. To
develop education and training the government and its partners have to ensure that education
system is efficiently managed at national, county and school levels. Each level of education has
its role to play in eliminating wastage. The government focus on education is critical in
addressing education ‘output’ in order to justify huge annual public expenditure on basic
education. Since primary school level of education forms the ideal basis for transition to higher
levels of education, then great attention should address issues of dropouts, absenteeism, andcases
repetition.

MEANING OF EFFICIENCY

The word efficiency appears to have originated from Economics. The concept arose from the fact
that every organized human activity start by defining the objectives to be achieved or output
expected. In order to achieve the objectives, certain inputs must be available.

Efficiency, according Arinze in Bosah and Eneasator (1996: 1974) is defined in terms of the
optimal relationship between inputs and outputs in an enterprise. We usually say that an activity
is performed efficiently if a given quantity of outputs is obtained with a minimum number of
inputs or, alternatively if a given quantity of inputs yields maximum outputs.

Arinze in Bosah and Eneasator (1996) stated that depending on the type of organisation and its
objectives, that efficiency is measured by the number of deaths per doctor, the number of
supervisees per supervisor. Kilometres covered by a car per litre of petrol. However in education,
some efficiency

measures include:

 Cost per full time equivalent student

 Student – faculty ratio
 Student – teacher ratio
 Percentage of classroom time utilized.
Education and economics are all concerned with production. The concept of efficiency is used to
analyse production which one kind of goods or services is transformed into another. Education,
as we mentioned, is also concerned with production.

A number of inputs (teachers, students, content, buildings, books instructional materials, etc) are
combined in different ways in order to achieve educational ends. In other words, various inputs

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are transformed in order to achieve outputs. It is therefore obvious from all this that when people
talk about improvement in the efficiency of the educational system, they are generally referring
to change in the way different inputs are combined to yield outputs.

Generally, efficiency in education has two dimensions. These are according

to Arinze (1996) the flow of students through the system with a minimum of wastage and the
quality of learning achieved in the system at given levels or periods

It must be pointed out that wastage in the flow of students manifest quantitatively in the form of
drop out and repetition. The quality of learning is determined by the inputs and outputs of the
educational system. The second aspect of efficiency is more controversial and uncertain. This is
the quality of learning. It may have to deal with the extent to which the learning outcomes are in
agreement with what the society or nation desires.

THE TWO CONCEPTS OF EFFICIENCY

From all that has been said in the previous paragraph, we can see that there are two concepts of
efficiency when we consider the overall context. These include:

 Internal efficiency
 External efficiency
First, an educational system is said to be internally efficient when it produces graduates
without wasting any student-year, or without drop-outs and repeaters. In other words, an
internally efficient educational system is one which produces graduates without wasting any
student year or without dropout and repeaters.

However, one must point out that the same system may be externally quite inefficient if the
graduates it turns out are not what the society, economy, or higher levels of education wants. The
graduates so turned out may be wrongly qualified, not meeting the university entrance
requirements. They may be unemployable and redundant.

Arinze in Bosah and Eneasator (1976) stated that the external efficiency of an educational system
involves relationships between general and vocational education and between schools and world
of work. This means that the external efficiency of an educational system has to do with the
relationship between general and vocational education and also between schools and the world of
work. An educational system is said to be eternally efficient if the graduates turned out fits into
the world of work.

In order to promote external efficiency, it may be necessary to estimate the number and skills
that will be required in the country at a future date. In other words, if we can estimate the number

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and kinds of skills that will be required in the country at a future date, we are promoting external
efficiency.

However, this exercise (the estimation of the number and types of skills that will be required in
the country at a future date) is extremely difficult in this fast-changing world. Whatever is the
case, serious efforts have to be made by both curriculum specialists, educational administrators
and planners to reduce the level of external inefficiency of the educational system.

1. WASTAGE IN EDUCATION (an example of Nigeria)

The Concept of Wastage

In the previous unit, you were exposed to the concept of efficiency. We also identified the two
types of efficiency, namely, internal and external efficiency. We saw that efficiency is defined in
terms of the optimal relationship between inputs and outputs in an enterprise. We made the point
and an activity is performed efficiently if a given quantity of outputs is obtained with a minimum
number of inputs. Efficiency, as was stated, is measured by the number of deaths per doctor, the
number of supervisees per supervisor, the number of kilometres covered by a car per litre of
petrol.

In education, some measures of efficiency include cost per full time equivalent student, student
faculty ratio, student-teacher ratio and percentage of classroom time utilized. We also saw that
efficiency in education has two dimensions which include the flow of students through the
system with a minimum of wastage and the quality of learning achieved in the system with a
minimum of wastage and the quality of learning achieved in the system at given levels or
periods.

Wastage in education cannot be separated from efficiency. Educational wastage means the
inefficient us of educational resources. Obviously, educational wastage includes drop-outs,
repeater, non-employment of school leavers, brain drain and even inadequate utilization of
educational resources including teacher and buildings. Inadequate utilization of educational
resources implies that in a school system, for example, the teachers posted to the school are not
properly utilized. In this situation, it is possible that some teachers do not have classes to teach. It
is also possible that some buildings are lying waste.

CAUSES OF EDUCATIONAL WASTAGE

There are many different kinds of wastage in education. We shall borrow from the classification
of Arinze in Bosah and Eneasator (1996:176) who grouped the causes of wastage in education
into three, name;

 the nature of educational inputs

 the nature of processing
 the nature of outputs

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The causes of educational wastage are largely due to the nature of educational inputs. This
includes the nature and ability of students, the nature and types of educational resources, the
goals of the educational system, and the nature of the content (curriculum). One aspect of
manifestation is drop-outs within our educational system.

We find cases of drop-outs in primary schools, secondary schools and tertiary institutions. The
main reasons for drop-outs are ill-health and death, truancy financial difficulty or poverty,
learning difficulties among students, and at times, parents wish, some pupils or students fell sick
during their academic career and the ill-health is so serious that they cannot continue with their
education.

Some even die in the process. Some students also enrol into a programme but habitually absent
themselves from lessons or lectures. In some cases, they abandon the programme. Some students
face financial problems due to the socio-economic background of their parents or guardians.
There are also students who have learning difficulties. They find it difficult to grasp what is
taught.

Another cause of educational wastage is the nature and types of educational resources, including
teachers and facilities available for education. Secondary schools, particularly, those in the rural
areas of the country lack sufficient apparatus for science practicals. Some schools in the rural
areas of the

The nature of the goals of the educational system is also another cause of wastage in education.
We find out that where the goals of the educational system are practical-oriented, then the
products would be gainfully employed on graduation. But where the goals emphasize merely
literacy and general education, then the products would be unemployed.

The nature of the content of the curriculum could also be a cause of wastage. In a situation where
the content of the curriculum consists of English Literature, History, Christian or Islamic
Religious Knowledge, Music Geography, Igbo Language and French, then the products of the
school may graduate without any hope.

The cause of educational wastage could be process-based; say administration or management,

the examination or certificate system.

The nature of administration or management of the school system could be faulty in the sense of
the administrator being autocratic or high-handed. It could also be a liazze faire administrator –
who allows everything to go its own way without making effort to put things right. It could be
that the nature of the examination system where emphasis is laid on one-shot examination
instead of continuous assessment, is the cause of the wastage

The last but not the least cause of wastage in the Nigerian Educational System is the nature of the
outputs. It could be that the graduates from the educational system do not conform to the initial

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objectives or even that the graduates find it difficult to fit into the society. Somebody who
studied literacy subjects, for example, may not fit in very well in a computer-literate society. The
graduates may not be fully employed, or it could be that they have not acquired the changes and
thoughts desired by the larger society.

HOW TO REDUCE EDUCATIONAL WASTAGE (an example of Nigeria)

What you have been studying in the previous paragraphs are the causes of wastage – i.e. the
causes of educational wastage. In this section, you will learn about how to reduce educational
wastage. For those who drop-out from school for reasons of ill-health, school heads and medical
units of schools should monitor student’s health so as to detect those who are sick and need
medical attention. The Federal and

State Ministries of Education, Voluntary organizations, Financial institutions like banks and
wealthy individuals should award bursaries and scholarships to students to enable those who may
drop-out to complete their programmes.

The National Educational Technology Centre in Kaduna should assist schools by donating
instructional materials to them. The quality of the teacher should be improved for better
performance on the job.

Educational institutions should organize conferences, seminars and workshops for serving
teachers on the improvement of teaching methods and techniques.

There is now more emphasis on science and technology, computer science and allied courses.
So, the contents of our curriculum should be in line with science, technical and computer areas.

The management or administration in our educational institutions should be re-examined with a

view to improving its quality. First of all, the various Federal and State Ministries of Education
and their agencies should as a matter of necessity appoint qualified and competent educational
administrators to head various institutions.

Politics should not influence the appointment of educational managers or administrators of our
institutions. Administrator of our educational institutions, be the Primary school Headmasters,
Secondary school

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Principals, Provosts of our Colleges of Education, Rectors of Polytechnics and Vice-chancellors
of our Universities should be democratic in the management of affairs of their institutions.

Educational institutions should continue to lay emphasis on continuous assessment. Certificate

acquisition, should as much as possible be de-emphasized.

The graduates of our various schools or educational institutions should acquire changes in
behaviours and thoughts as desired by the society. Our graduates should fit well into the society.

2. REPETITION RATE

Definition:

Repetition rate is the proportion of pupils from a cohort enrolled in a given grade who are
enrolled in the same grade in the following school year.

Method of Computation:

Divide the number of repeaters in a given grade in a given school year by the total number of
pupils enrolled in that grade the previous school year. For example, the repetition rate for second
grade in 2003 is the number of students repeating second grade in 2003 divided by the total
second grade enrolment in 2002.

3. SURVIVAL RATE BY GRADE

Definition:

The survival rate is the percentage of a cohort of pupils enrolled in first grade of primary school
in a given school year who are expected to reach a successive grade, typically fourth or fifth

Method of Computation:

This indicator is typically estimated based on enrollment and repetition by grade for two
consecutive years, using a procedure called the reconstructed cohort method. A cohort’s flow is
constructed beginning in year one and assuming the existing pattern of repetition and enrollment
by grade will carry forward. The survival rate to a particular grade is the percentage of the cohort
that reaches the specified grade. When estimated from household survey data, the proportion is
estimated as the product of the proportions of transition for each grade up to the given grade.

4. COMPLETION RATE

Definition:

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The primary completion rate is the ratio of the total number of students successfully completing
or graduating from the last year of primary school in a given year to the total number of children
of official graduation age in the population.

Method of Computation:

Divide the number of pupils now graduating successfully by the total number of children of
official graduation age in the population and multiply the result by 100. A proxy completion rate
is calculated as the ratio of the difference between the total number of students enrolled in the
final year of primary school and the number of students who repeat the grade in a typical year to
the total number of children of official school age in the population for that grade, multiplied by
100. For example, in Uganda, primary school consists of grades one through seven with an
official age of six to twelve. The completion rate using this second method was calculated by
dividing the difference between total enrollment in grade seven and the average number of
repeaters during the past two to three years by the total population of 12 year olds.

5. ENROLMENT RATE

The number of children/Students of official primary Secondary school age who are enrolled in
primary secondary education as a percentage of the total children of the official school age
population.

GENERAL CONCERNS OF ECONOMICS AND THEIR APPLICATION IN EDUCATION

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