Education as an Integral Element in Economic Development
Education has been regarded as an integral element in the development of modern economies. The development of human capital in many countries has proved to be fundamental to economic growth and development. Efficient human resource tends to be more productive at workplace most especially in manufacturing firms and other service-related organizations. Whenever Education is looked at as human capital, Arnold's Microeconomics theory clarifies it that numerous traits exist between education shares and physical capital, (Arnold, 2013). The theory uses this relationship on the basis that both categories need an investment to be created. Moreover, both investments result in economic value after creation. The investment in education by the private individuals has risen of the recent years and it continues due to the desire of people, (Arnold, 2013). Private individuals invest a lot resource in the system with the hope of gaining returns at a future date. The rate of return is viewed from the wage rates, salaries earned by individuals after their college degrees, and other academic awarding that accrue in the end. The individual experience and technical competence have are some of the factors that influence the rate of return on an investment in education. Investment in the education normally involves the opportunity cost for workers. It involves foregoing any things in life, spending many hours in the class and spending money on education rather than spending it other luxury things. The major objective of this paper is to analyze the investment in education by utilizing Arnold's Microeconomics theory.
Thesis Statement: Education Shares Create Economic Value
Thesis statement: Education shares create economic value similar to the one created by physical capital after investment since they all contribute towards the development of modern economies.
The Importance of Human Capital in Organizations
The employees that possess the high level of skills and expertise tend to be demanded more and some organizations involve in head hunting for the experts. Education has been regarded to be inseparable from human capital accumulation since human capital is the most important asset that an organization can possess. It is from the augment that human capital has the brain and it can reason which is not the case with other resources like physical capital. The development of economies has hinged on the nature of the human resource and it contributes greatly the unit output levels and gross domestic product of an economy. The research paper analyzes the various education systems that influence the level of understanding of students and effectiveness of policies in relation to the Microeconomic theories. The paper further addresses the relevance of education of education in the development of an economy and impact of career choice by education (Marchant, " William, 2007).
Career Choice
The microeconomic models about career choice have highlighted planning, learning, choosing, and adjusting to at the centre stage of determining career choice. The process of career choice is a sequential process and involves many uncertainties at each stage. These models assert that the differences in background and aptitude play a crucial role in making choices related to career. The background of an individual tends to affect the career the path to be taken. Some people come from families where most children are engineers. It implies every in that family aims at being an engineer and this entices the young ones from the family to take up that career. Furthermore, the influence of family is also at the centre of influencing career to be chosen by most high school students and college students. The parents encourage their students to take up certain careers that they think are on demand on the market (Segal, 2007). The effect relates to the price theory, which focuses on the demand and supply of commonalities. It implies that wages paid to such labor in form of price are always high due bigger periods required to train such labor.
Market Forces of Labor on Career Choices
The demand and supply theories content that the market forces of labor influence career choices. It implies that when the supply of labor in a certain field is high, the demand will reduce. It sends a bad signal to the academic world, which makes the students at higher institutions of learning to shift and change in the choices they make in terms of career. Most students at college wish e enrolled for courses that are on market and make them get employment opportunities with ease. From the investment perspective, no one would wish to invest in a venture, which not productive in nature (Arnold, 2013).The same scenario surrounds the education setting where students and sponsors wish to invest in careers that will yield high rates of return. High supply of labor reduces the price paid to labor. The price is normally in terms wages, salaries, and other fringe benefits that are awarded to the worker force. The current global trends lay in the engineering and another scientific course whose demand for labor is on rising due to their limited supply trends. It acts as the determinant factor as to why most students wish to enroll for such courses. The wages and salaries paid to such educated workforce are always high and the labor has proved to be irrepressible in the short run.
Education Policy
In early years, education in America was majorly religious and private in nature as it focused primarily on how to write and read the bible and laws of a settlement. Massachusetts General Courts enacted the first law relating to education in 1642. The major emphasis of the law necessitated the guardians and parents to take a sole responsibility for ensuring that their children understand various principles of the religion and laws relating to the Commonwealth. During this era, children often taught at home but due to failure by parents to comply with the enacted law of 1642, another law of 1647 was enacted. It required the parents to hire the schoolmaster to take up the responsibility. The trend of education went on changing up today where many institutions are forcing on the transformation of the education sector in America (Canals et al 2014).
In 2001, the United States Congress enacted No Child Left behind Act. The act focused mainly on the outcomes of schools, which were supposed to be measurable. It intended to improve the performance levels of the public schools in the United States. It necessitated individual states to formulate standardized tests and other assessment to be given to the students. The main aim was to select the students based on that assessment to be given the state funding. The main idea was all State children were entitled to better and quality education (U.S. Department of Education, 2001).
The United States president Barrack Obama announced $ 435 billion grant fund for the Race to the Top. This plan was initiated mainly to introduce improvement initiatives and promote innovations. The funds were given to the individual states to develop plans for improving the education sector, (Schmitz, 2012).The fiscal policy comes into play as it determines the government expenditure and revenue with aim improving the economy. The grant was given was purposely to revamp the education section with an attempt to modernizing the economy. Reforms were meant to implement and the data systems for all schools were to be installed to track the education performance of schools. All the states were to develop frames and criteria on how to Identify the student who the standards.
Importance of Education in Economic Development
Education has been regarded to be fundamental in the development of an economy. Well-educated human capital makes it possible to achieve the necessary development in an economy and this is based on human mind. The health setting and agricultural innovations are based on education and they are key indicators of development. A well-educated population has proved to be cautious in most aspects of life and this has increased the quality of life of individuals. This, in turn, reduces the spending patterns of individuals on the treatment of diseases and other illnesses. The biggest portion of individual savings invested in other productive ventures that led to the growth of an economy. Such investment increases the total output levels produced in the economy and it increases the quality of life in the country.
The Role of Education in the Workforce
Education plays a greater role in producing educated workforce and increases the productive capacity of the country. Well-educated labor force tends to be efficient when carrying out various tasks, (Cooper, and John, 2011). The tasks that require critical thinking and analysis require the educated workforce since they can think outside the box. It is not always the case that the uneducated labor cannot handle technical works of the organization. This calls for countries to invest in the education system that trains workers that more technical and competent to handle complex tasks. The education system should be streamlined right from the lower levels of education, post-primary and up to higher levels of education at college level. It implies that the investment in human capital would yield better results and workers will be trained in critical areas (Gaurav, 2016).
Intellectual Ability as an Asset to Businesses
The intellectual ability of employees that emanates from education and training is regarded as an asset to the business community. An asset helps organizations in the creative services and products. It implies that quality is always produced and sold to the market. It, in turn, increases customer satisfaction and profits earned. It comes from the fact that a satisfied customer buys more of company products, which increases sales and leads to greater profits. Basing on this background, companies should always recruit and employ well-trained worker forced to produce efficiently and economies with the well-trained worker are regarded as a knowledge-based economy. In order to maintain this economy, further investment in education is required booster it and accelerated development (Elizabeth, 2011)
Conclusion
Education is crucial to the social and economic transformation of an economy. It plays a great role in the economic development of the country as it increases the productive capacity of the worker force. The current market demands in the industry surround around the technical competence of the labor force. It implies that professionalism is required from the employees and they must be in the position of delivering quality services to the employers. This requires heavy investment in the education system by parents and other stakeholders to improve the quality of the education in an economy. It should be noted that investment in education by an individual involves an opportunity that must be foregone. The returns from education come after several years of an investment and they come in form of high wages and salaries. The policies enacted by states play a crucial role in ensuring the quality of education in the country and quality of labor force that produced by the college and other higher institutions of learning.
References
Arnold, A. (2013).Microeconomics 11th Edition. Library of economics and liberty.
Segal, I. (2007). Lecture Notes in Contract Theory.Stanford University.
Marchant, A"William, M. (2007) “Microeconomic and International Policy Terms. The University of Kentucky.
ELIZABETH, K. (2011). Education is Fundamental to Development and Growth. Theworld Bank
Gaurav, K. (2016) What's the economic benefit of education?Retrieved from https://www.weforum.org/agenda/2016/01/whats-the-economic-benefit-of-education/
U.S. Department of Education.(2001) Race to the Top Fund – Executive Summary.Notice of Proposed Priorities.Retrieved from http://www.ed.gov/programs/racetothetop/executive-summary.pdf.
Canals. J. et al (2014), Education communication of the State, no state left behind. The challenges and opportunities of ESEA 2001.
Cooper, R., and John, A. (2011). Microeconomics: Theory Through Applications. FlatWorld Economics Textbooks.pdf
Schmitz, A. (2012). Theory and Applications of Microeconomics (v. 1.0).Lardbucket.Pdf
