Tweet

Effects of education upon child schooling and cognitive development: The Indirect Effects of Investment in Human Capital

Written by: African Development Bank

Article Overview: Children are typically more likely to go to school if their parents are educated. They also tend to perform better in school and in some cases may earn higher incomes in adulthood.

Effects of education upon child schooling and cognitive development: The Indirect Effects of Investment in Human Capital

Children are typically more likely to go to school if their parents are educated. They also tend to
perform better in school and in some cases may earn higher incomes in adulthood. For example, a
study of Kenya and Tanzania compared the probability of manufacturing workers having completed
lower secondary schooling as a function of the education of their parents. In Kenya those entering
school around 1960 were predicted to have a 21% chance of completing lower secondary if both their
parents were uneducated and an 83% chance if one of their parent had at least secondary education
and the other at least primary education. The figures were similar Tanzania. Since most secondary
schools at that time were state schools, where access was rationed by performance in the primary-leaving examination, these figures also suggest large differentials in academic performance by parental
education. More recent research drawing upon data from Kenya in 1993, also found a large differential
in performance on the primary-leaving examination - around half of which was explained by the different
local neighbourhoods and primary schools which children from different educational backgrounds
attended (Appleton, 1995b).
These results suggest that educating one generation will have favourable effects both on the cognitive
skills and the health of the next. They also imply that there may be a “ratchet effect” to educational
expansions: parents may be reluctant to see their children obtaining less education than they received.
Investments in health also have long-term dynamic intergenerational effects, which are partly biological.
Consequently, a mother’s nutrition affects the health not only of her children, but of her daughter’s
children. Compared to much physical capital, human capital is long-lived and more irreversible: if people
are not given adequate nutrition, health care and education in childhood, this is will have consequences
that cannot be remedied in adulthood. For these reasons, investments in human capital cannot be put
off until economic conditions are better.

Human Capital and Economic Development
Simon Appleton and Francis Teal

Related Articles
  Conclusion: Human Capital and Economic Development
  Effects of education upon health and nutrition: The Indirect Effects of Investment in Human Capital
  Effects of health on child schooling and cognitive development: The Indirect Effects of Investment in Human Capital
  Effects of education upon fertility: The Indirect Effects of Investment in Human Capital
  Summary: HUMAN CAPITAL FORMATION AND FOREIGN DIRECT INVESTMENT IN DEVELOPING COUNTRIES

Article Tags: academic performance, adequate nutrition, adulthood, appleton, cognitive skills, differential, differentials, educational backgrounds, entering school, expansions, favourable effects, incomes, neighbourhoods, nutrition health, parental education, primary education, probability, secondary education, secondary schooling, secondary schools



Related Forum Posts
HRPreneur - Hi everyone, I am new to the forum and I recently started my own Human Capital (HR) consulting firm called HRPreneur Inc. HRP focuses on making human capital a strategic differentiator for SME's. Below is a summary about HRP; Who We Are: HRP is a Human Capital consulting firm with 30 years of experience that becomes an extension of your company by providing a full array of services to help you create a highly engaged workforce focused on achieving strategic results in order to build a long lasting great company! Mission: HRP provides small and medium sized businesses a Strategic HR Business Partner to increase employee engagement, resulting in cost savings, increased productivity and results at an affordable rate! Vision: To inspire and warrant SME's reach their full competency! Cost Effectiveness: We provide over 30 years of experience at a fraction of the cost at a strategic executive HR business level You will save between 50% to 60% in costs per year on salary, bonus, benefits, training, office space alone We will provide you additional cost efficiencies through our services Services: • Strategic Human Resources Planning • Organizational Redesign • Change Management • Organizational Culture Development • Employee Engagement Programs • Leadership Assessment and Development • Compensation Design • Talent Acquisition • Assimilation and On-Boarding • Performance Management • Talent Management & Succession Planning • Human Resources Due Diligence • Human Resources Audit • Full Service HR Outsourcing
How to valuate a business - Hi Garth - here is how we did it at Northern Crown Capital when I was helping them raise venture capital for Toronto-based entrepreneurs. Assume the start date is 2003 so 2008 projections are 5 years out: How Northern Crown Capital Valuates a Business 2008 Financial Projections Earnings Before Tax $5,865,000 Tax Rate 42% Taxes $2,463,300 Net Earnings $3,401,700 Amount Seeking to Raise Today $3,500,000 Discounted Value of Future Opportunity, 5 Years Out 2008 P/E Ratio 15 Value of Company in 2008 $51,025,500 Discount Rate Applied 30% Year 2008 $51,025,500 Year 2007 $35,717,850 Year 2006 $25,002,495 Year 2005 $17,501,747 Year 2004 $12,251,223 Value of Company at Investment in 2003 $12,251,223 Less: Investment Amount $3,500,000 Present Value $8,751,223 Discount for Risk & Private Company 40% Less: Discount for Risk & Private Company $3,500,489 Private Company Value $5,250,734 Present Value (What the Owner Keeps) $5,250,734 60.00% Financing (What the Investor Gets) $3,500,000 40.00% Total $8,750,734 100.00% I hope this helps!
Del Castienne - International Business and Project Brokers - In addition to the above, Del Castienne is an international brokerage firm specializing in various entrepreneural services. Del Castienne is more than just a brokerage, as we facilitate Private International Venture Capital for Business and Projects from Commodity Speculation Transactions, MBO, MBI, M&A, Bridging Finance, Patents, Branding, JV, Corporate Advisory Services, Business Plan Development, etc.. Del Castienne is linked to 1200 private international Venture Capital consortiums and Funding Syndicates with a funding capacity of $ 115 billion and 5000 international Investment Bankers and Business & Project Brokers. This in itself should provide you with a gateway to the best source of funding in the world. Through Del Castienne any entrepreneur can have up to a potential success rate of 25% (conditions apply) with absolutely no up front costs. Del Castienne charges a maximum of 5% commission which is far below the international standard of 10% - 12% on project value. If you are tired of running back and forth with countless dissappointments, please give us an opportunity to assist you. Our minimum Venture Capital amount is $1 million and we a Commitment Letter can be provided with in 30 days after formalities are in place and your information was received.
New Small Business Topic - Hello everyone, I'm on the lookout for new topics to add to my site. We just launched a Franchising section and are planning Human Resources section. Do you have any thoughts for a new section? Here's a list of what we currently have: Angel Investors Branding Bank Loans Business Coaching Business Plan Franchises (New) Insurance Legal Marketing Public Relations Sales Small Biz Loans Venture Capital
Worzel - HI! Lots of his stuff is still 'out there', like the idea of the personal assistant modeled after 'Rosie' on the Jetsons. He does talk about the huge opportunities to be made in education, ie. recognizing that children learn through a variety of senses, and that the online schooling/training world will continue to grow. He predicts the use of microchipping as a way of grocery shopping and a variety of other things. I havent found a website for him, but the book is an interesting read. You never know what you'll get! J


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Fighting the Saw-Tooth Affect

When the Going Gets Tough, the Tough Log On

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.