Page 182 - DEDU501_DEVELOPMENT_OF_EDUCATION_SYSTEM_ENGLISH
P. 182
Development of Education System
Notes (i) Secondary Education Contributes to Economic Growth: In India, technological innovations,
openness to world trade, and rapid economic growth have fuelled the demand for skilled
workers. Recent analysis confirms that most of the employment growth over the past ten
years has taken place in skilled services (information technology, financial services,
telecommunications, tourism and retail) and skillintensive manufacturing, all of which
require, at a minimum, a secondary education degree. Meanwhile, employment declined
in low-skilled occupations, and stagnated in agriculture as agricultural value-added growth
decelerated sharply in the second half of the 1990s. Even in rural areas, job prospects are
better for the more qualified. Further, there is a rising overseas demand for highly skilled
and semiskilled workers from India, most notably in the USA, UK, Southeast Asia, and the
Gulf states.
However, employer surveys increasingly indicate that shortages of skilled workers
constitute constraints to new private sector investment and growth. The Federation of
Indian Chambers of Commerce and Industry (FICCI) conducted a survey of Indian industry
in July 2007, whose results clearly showed that “the shortage of skilled and semi-skilled…
workers has emerged as a critical factor impacting the competitiveness of Indian industry”.
The skills shortages appear when trying to expand production (fill new vacancies), upgrade
existing employees to more technology-intensive production processes, or replace loss of
employees to higher paying employers. Shortages were reported across many segments
of industry, including oil and gas, biotechnology, food processing, IT, aviation, health
care, construction, automotive, mining, textiles, plastics, finance, insurance, chemicals and
pharmaceuticals. From industry’s perspective, a more skilled workforce (meaning workers
with at least secondary education) is critical for increasing technical absorption, reducing
rejection levels and enhancing the quality of products for both domestic and international
markets.
Furthermore, a 2008 survey of 600 companies – both Indian and foreign - conducted by a
human resources consulting firm10 showed double-digit salary increases in both 2007 and
2008 in real estate, energy, retail, telecommunications, banking/finance, accounting/legal,
IT and back-office processing (all of which require at least a secondary education), which
suggests employers are having to compete more for scarce skilled personnel. Interestingly,
staff at the junior manager and professional levels received the largest pay increases,
rather than senior/top management. In summary, all of the trends discussed above led a
recent study of the Indian labor market to conclude: “This highlights the importance of
enhancing secondary education, an area where India is still lagging.”11 Quantitative
economic analysis supports this conclusion - the marginal private returns to additional
education have been highest in secondary education, although in recent years the increases
have been greatest at the senior secondary and tertiary levels. Given that skilled workers
and professionals can migrate abroad much more easily to search for greater opportunities,
if the earnings of Indian overseas workers were taken into account, the returns to secondary
and higher education would be even greater12. The marginal returns to girls’ education
have consistently been higher than those for boys and, comparing 1999 and 2004 calculations,
the returns to girls’ senior secondary and tertiary education increased much faster than the
returns to boys’ education.
The extraordinarily high rates of return for girls compared to boys are caused by the size
of the earnings differentials between males and females at different levels of education.
Females earn less than men at all levels of education, but the relative disadvantage is less
for female secondary education graduates than at the elementary education level. The
difference in earnings between girls with a secondary education and those with an upper
primary degree is much greater than the difference between boys at these two levels.
High returns for girls also reflect a selection bias, as girls who complete secondary education
tend to be more able and motivated, and come from better socio-economic backgrounds,
than the general population of girls.13 As a result, girls realize a much higher rate of
return on secondary education investments than boys (World Bank, 2002b). This selectivity
bias will decrease as more girls attend secondary schooling.
176 LOVELY PROFESSIONAL UNIVERSITY