Tree essays on economics of education in developing countries

NOTE TO USERS Page(s) not included in the original manuscript and are unavailable from the author or university. The manuscript was scanned as received. 19, 21-37 This reproduction is the best copy available. ® UMI THREE ESSAYS ON ECONOMICS OF EDUCATION IN DEVELOPING COUNTRIES by Mustafa Seref Akin , B., University of Istanbul, 1996 M., Western Illinois University, 1998 A Dissertation Submitted in Partial Fulfillment of the Requirements for the Doctoral of Philosophy Degree Department of Economics Southern Illinois University Carbondale, IL 62901 April 2004 UMI Number: 3147121 INFORMATION TO USERS The quality of this reproduction is dependent upon the quality of the copy submitted.

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All rights reserved. This microform edition is protected against unauthorized copying under Title 17, United States Code. ProQuest Information and Learning Company 300 North Zeeb Road P. Box 1346 Ann Arbor, MI 48106-1346 Dissertation Approval The Graduate School Southern Iilinois University April 28, 2004 IT hereby recommend that the dissertation prepared under my supervision by Mustafa Akin Entitled Three Essays on Economics of Education in Developing Countries be accepted in partial fulfillment of the requirements for the DOCTOR OF PHILOSOPHY degree Lr £ ¢eee oy in C.*narge of Dissertation i.

waft ean TƯ h kế Cš he! AtiN tới Head of Department Recommendation concurred | in 1. 2 Committee 3 for the Final Examination 4 AN ABSTRACT OF THE DISSERTATION OF Mustafa Seref Akin, for the Doctor of Philosophy degree in Economics, presented on April 28, 2004, at Southern Illinois University at Carbondale. TITLE: Three Essays in Economics of Education in Developing Countries MAJOR PROFESSOR: Professor Kevin Sylwester Education is nota miracle medicine to cure all social problems such as child labor, poverty and unequal income distribution. Moreover, education is an expensive treatment.

The main explicit costs are physical equipment and instructors’ wages. The " major implicit cost is the opportunity cost of foregone earnings. | | In these essays, I deal with three different topics but all strictly related to education. Moreover, I concentrate on developing countries.

This dissertation examines how participation in education is associated with three different characteristics of _ development, namely: fertility, the incidence of child tabor, and urbanization. This can help policy makers better understand how education affects different characteristics of development. The first essay deals with education and fertility in Middle Eastern countries, a region with a very high fertility rate. A model of fertility will be presented to analyze the impact of female and male education and wages on fertility.

Both theoretical and empirical results show that fertility rate is strictly associated with female education rather than male education. Sadly, the women of this region have limited opportunities to receive | education, I collected data for fourteen countries in the Middle East from [980 to 1998. | Panel estimation will be employed. The second topic is child labor.

Much theoretical and empirical research has been conducted at the micro level on this issue. On the other hand, not much macra analysis of. the child labor problem has been investigated. The aim of the research is to assess the association between child labor and education in a cross section of African countries.

This paper focuses on sub-Saharan Africa, which has the highest child labor incidence, between 1960 and 1999. The third topic is: urbanization i in Middle East and North Africa. This research investigates reasons for urbanization in the Middle East and Northern Africa (MENA) between 1980 and 1997, a post-oil period. A theoretical model will be presented to analyze the impact of education to urbanization.

In the Western World, urbanization is an outcome of indstratizaton Results show that imdustrialization, even after oil, is not relevant with urbanization inn MENA, Moreover, poverty in the agricultural sector also does not affect urbanization ini this period. What could be the main reasons? This research suggests: that education; amenities, commercial activities, and income ï are promoting urbanization in MENA. Plus, this paper searches the relevancy of various educational characteristics such as levels (primary, secondary and tertiary), genders and lagged years of education with urbanization. Besides human capital acquisition, the accumulation of university institutions in big cities is another motive for migration in MENA, ii ACKNOWLEDGEMENTS I would like to thank my dissertation chair, Kevin Sylwester, for his continual patience and encouragement.

Talso wish to thank the members of my dissertation committee, Richard Grabowski, Saj al Lahiri, Scott Gilbert and Todde Headrick for their substantial contributions to this dissertation. | Moreover, T would like to thank my mother and father for their unconditional love and support throughout my life and academic career. Your hard work and wisdom made me the person | am today. A special thank goes to my sister for her understanding.

` oe “ : ae Acknowledgment i ee ee 4 POOP em meee ee Ree re een ewe sae ee ‘waved eoton teed v `. ` List of Tables Seee ee ea a. COR e eee eee ee ree eee. VỊ Chapter One: Education and Fertility: “A Panel Data Analysis for Middle Eastern Countries ¬ BH H2 ve ràng ¬¬.

Lune ee Caen ee UAE EAE EE EE EEE E EAE RG EDGE SEE SEER RSENS EEE EES Tu kh nh cky 5 Ill. Theoretical Model: Fertility. cee eee cence eee hen TK TH ch tà tà tà T2 hườn § V. ¬— ""— ees Thun gà casi ¬.

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Methodology and Data Analysis. ¬ sọ "— a severe "—— 50 — VI, Empirical Restlls. co erre? ¬————————— eens bu ky _ beeen Vil. Conclusion ¬ Su —- ¬ ¬ doce eneeseaeeseeesens.

TH HH HH ru 2H kh vê, se. LIST OF TABLES _ Chapter Ï Table 1.1, Summary Statistics by Country: avcrage values over 1980-1999. Panel Data Estimates (Dependent Variable: Fertilify). Income and Education in Ghana.

canes veacecnecesasess Vy xa nhờn 25 | Table 2. Child Labor Participation Rate in Ivory Coast. " ch ng 25 Table 2. Urban versus Rural in Cote )ì) ky.

Children's ‘Time Allocation in Botswana (%). ceeneueaeceueceess mm 28 Table 2. Panel Data Estimates Dependent Variables: Child Labor (%). re 35 Chapter 3 s Table 3.

Industrialization and Urbanization. Location of Universifies ín Saudi Arabia. Location of Universities 1n lran. nh yk 47 : Table 3.4, Location of Universities in Morocco ¬ ¬ Tn ng gue 48 Table 3.

Location of State Universities in Ilinois. Average Values of Variables Between 1980-1997 in | MENA. Panel data Estimates Dependent Variable: Urban Population (%). Panel Data Estimates (Dependent Variable: Urban Population (%) with :.

" ĐN ng ĐH TK ng. kế TT ch nà tà nh tk vờ 38 Vi CHAPTER 1 TITLE: EDUCATION AND FERTILITY: A PANEL DATA ANALYSIS FOR MIDDLE EASTERN COUNTRIES 1. Introduction Research on fertility is limited for Middle Eastern (ME) countries. This paper aims to investigate the relationship between fertility and education (by gender and levels), while controlling for other factors in ME.

Solow (1956) argues that low population growth leads to higher long-run income in a neo-classical framework. Barro (1991) and Mankiw et al. (1992) report that high fertility rates are associated with low economic growth in a cross-country regression of either the level or the growth of GDP. | Increasing human capital through education is one way that has been suggested to lower fertility, Becker et al.

(1990) state that high returns of human capital are reasons for the negative relationship between fertility and growth. According to them, human capital is embodied knowledge and skills, and economic development depends on advancement in technological and scientific knowledge. Development depends on the accumulation of human capital. Higher fertility of the present generation increases the discount on per capita future consumption.

Therefore higher fertility discourages investments in both human and physical capital. Families prefer having few children, and provide cach child with a high level of human capital. The high level of human capital also leads to a high rate of economic growth and So is negatively correlated with fertility. Barro (1991) finds that more human capital per person reduces fertility rates, because human capital is more productive in producing goods than more is having children, Any change that increases the cost of raising children tends to reduce fertility and to increase desired saving per person.

In effect, people shift from saving in the form of children to saving in the form of physical and human capital. _ Gallor and Weil (1996) employ three stages to explain the negative relationship between fertility and growth. According to their theory, in the first stage, an increase in capital per worker raises women's relative wages since capital is more complementary to women’s labor input than is men's. Second increasing women’s relative wages reduces, fertility by1 increasing the # opportunity cost of children more e than household i income.

And third, lower fertility. raises the level ofcapital per p worker. A rapid decline in fertility is accompanied bby aoocleraed output growth. Therefore, according to them, fertility and growth have a causal relationship.

Dowrick (1991) also state that investment, fertility, and income growth form an interactive dynamic system. An initial | negative shock to fertility can have positive effects on investment and income leadin gio a further decline in fertility, reinforcing i income and investment growth until anew steady state is reached. Zhang (1997) claims that an increase of number ofchildren leads to a reduction in parent's time used to produce goods and hence to a decline in income per | capita. However, an increase in the education: subsidy lowers the cost of education relative to the cost of providing for children.

As a result, decreases i in fertility increase | ‘human capital and promote growth. On the other hand, the negative relationship between ˆ female education and fertility do not generally exist and the previous studies are subject to use of different educational attainment proxies (Lorgelly et al. _ The above studies point to reducing fertility as one way to promote economic growth and suggest that education is one mechanism to reduce fertility: One region where this could be particularly important is the Middle East, which has experienced very high fertility and population growth. 1For instance, when we compare OECD countries and Middle Eastern countries, the first & striking result is thất the lowest fertility ratio of Middle Eastern, 2.96 in Israel,1is higher than the highest fertility ratio of OECD, 2.

Female labor market participation ratio in the OECD is two times higher the average of the female ratio in the Middle East. In female secondary education enrollment, almost all OECD countries reached 100%, but in Middle Eastern countries only half of women may be enrolled in secondary education. There has-also been some intra-country research examining fertility and education in Middle East countries as well as other developing countries. More education, especially among women, can lead to higher wages and so toa higher opportunity cost of having children (but it might also promote use of contraception.