EMP 412: Economics of Education -

Comprehensive Revision Answers

QUESTION ONE (Compulsory)
a) Identify four branches of Economics (4 Marks)

 Microeconomics: Studies individual economic units (households, firms) and their

decision-making processes
 Macroeconomics: Examines the economy as a whole, focusing on aggregate indicators
like GDP, unemployment rates, and inflation
 Development Economics: Analyzes economic aspects of the development process in
low-income countries with focus on improving policies
 Labor Economics: Studies the functioning of labor markets, wage determination, and
employment relationships
 Public Economics: Examines government policy through the lens of economic
efficiency and equity
 International Economics: Studies global economic interactions including trade flows,
capital movements, and exchange rates

b) Citing examples, explain the following Concepts (8 Marks):

i. Scarcity and Economic Resources (4 Marks)

 Definition: The fundamental economic problem that arises because human wants exceed
available resources
 Example in Education: Limited number of qualified teachers to meet educational
demands in rural Kenyan schools
 Resource Categories in Education:
o Physical resources (classrooms, textbooks, computers)
o Human resources (teachers, administrators)
o Financial resources (budgets, funding)
 Implications: Necessitates choices and trade-offs in educational resource allocation
 Practical Example: Government choosing between building more primary schools or
investing in university infrastructure

ii. The Opportunity Cost of Educational Investment (4 Marks)

 Definition: The value of the next best alternative foregone when choosing to invest in
education
 Individual Level Example: A student choosing university education forgoes immediate
income from entering the workforce
 Government Level Example: Resources allocated to education sector cannot be used for
healthcare or infrastructure
  Practical Application: Kenya's budget allocation to free primary education means fewer
resources for tertiary education
 Time Dimension: Years spent in education represent time that could be used for work
experience or entrepreneurship

c) Highlight the reasons why developing countries have invested in education (9

Marks)

 Human Capital Development:

o Education increases productivity and efficiency of workforce
o Creates skilled labor force necessary for economic growth
o Enables technological adoption and innovation capacity
o Empirical evidence shows correlation between educational attainment and
economic development
 Social Returns and Externalities:
o Reduced fertility rates and improved family planning
o Better health outcomes through increased health awareness
o Decreased crime rates and social instability
o Enhanced social cohesion and democratic participation
 Poverty Reduction:
o Education increases earning potential and employment opportunities
o Reduces income inequality and promotes social mobility
o Enables access to better-paying formal sector jobs
o Breaks intergenerational poverty cycles
 Global Competitiveness:
o Education creates workforce that can participate in knowledge economy
o Attracts foreign direct investment seeking skilled labor
o Enables economic diversification beyond primary commodity production
o Supports integration into global value chains
 Meeting International Development Goals:
o Alignment with Sustainable Development Goals (particularly SDG 4)
o Compliance with international agreements on education rights
o Access to development funding tied to educational initiatives

d) Discuss the factors that may influence the supply of education in Kenya today
(9 Marks)

 Government Policy and Funding:

o Free Primary Education (FPE) initiative increasing access
o Subsidized secondary education through Free Day Secondary Education (FDSE)
o Budget allocation priorities among education levels (primary, secondary, tertiary)
o Capitation grants and their adequacy for school operations
 Teacher Availability and Training:
o Teacher training capacity and quality of teacher education programs
o Teacher deployment policies, particularly to rural and marginalized areas
 o Teacher retention issues and brain drain to private schools or other sectors
o Teacher-student ratios and their impact on educational quality
 Infrastructure and Resources:
o School construction programs and regional distribution
o Availability of learning materials and textbooks
o Technology infrastructure (electricity, internet, computers)
o Support facilities like laboratories, libraries, and sanitation
 Private Sector Participation:
o Growth of private schools at all education levels
o Public-private partnerships in educational provision
o Corporate social responsibility initiatives supporting education
o Faith-based organizations' contributions to education supply
 Demographic Factors:
o Population growth creating demand pressure on educational facilities
o Urban migration affecting urban-rural distribution of schools
o Age structure of population and corresponding educational needs
o Regional population densities affecting economic viability of schools
 Socioeconomic Factors:
o Economic growth providing resources for educational expansion
o Poverty levels affecting ability to meet hidden costs of education
o Local community capacity to support schools through harambee initiatives
o Parents' educational levels influencing demand for quality education

QUESTION TWO
a) Explain the various types of educational costs (5 Marks)

 Direct Costs:
o Fixed costs (buildings, facilities, equipment)
o Recurrent costs (teacher salaries, learning materials, utilities)
o Administrative costs (management, supervision, quality assurance)
o Student-specific costs (textbooks, uniforms, examination fees)
 Indirect/Opportunity Costs:
o Foregone earnings during school attendance
o Productive labor lost to households when children attend school
o Alternative uses of time spent in education
o Delayed entry into labor market and income generation
 Social Costs:
o Total resource commitment by society toward education
o Externalities from educational institutions (traffic congestion, environmental
impacts)
o Resource diversion from other sectors to education
o Long-term cultural or social changes resulting from education systems
 Private Costs:
o Costs borne directly by students and families
 o Tuition and fees paid to educational institutions
o Supplementary costs (transportation, accommodation, private tutoring)
o Psychological costs (stress, adaptation challenges)
 Monetary vs. Non-monetary Costs:
o Tangible financial expenditures
o Intangible costs like time, effort, and emotional investment

b) Discuss the various intangible benefits of education to the society (10 Marks)

 Enhanced Social Cohesion:

o Common educational experiences creating shared values and national identity
o Reduction in ethnic tensions through integrated learning environments
o Development of tolerance and appreciation for diversity
o Creation of common language and communication frameworks
 Improved Civic Participation:
o Higher levels of democratic engagement and voting
o Better understanding of civic rights and responsibilities
o Increased capacity for informed political decision-making
o Greater participation in community development initiatives
o Enhanced ability to hold government accountable
 Cultural Preservation and Evolution:
o Documentation and transmission of cultural heritage
o Critical evaluation and adaptation of cultural practices
o Artistic and creative expression enriching cultural life
o Integration of traditional knowledge with modern understanding
 Health and Environmental Benefits:
o Improved health practices and preventive care knowledge
o Better nutrition and family health management
o Increased environmental awareness and conservation practices
o Enhanced epidemic response through better public health communication
 Crime Reduction and Social Stability:
o Lower crime rates correlated with higher educational attainment
o Alternative pathways to success beyond criminal activities
o Development of conflict resolution skills
o Greater compliance with laws and social norms
 Intergenerational Benefits:
o More effective parenting practices
o Enhanced early childhood development in educated households
o Higher educational aspirations transmitted to future generations
o Breaking cycles of disadvantage across generations
 Innovation and Knowledge Creation:
o Cultural climate fostering creativity and innovation
o Support for research and development activities
o Preservation and expansion of collective knowledge
o Adaptability to technological and social changes
  Social Mobility and Equity:
o Pathways for disadvantaged groups to improve social status
o Reduction in predetermined life outcomes based on birth circumstances
o More equitable distribution of opportunities
o Breaking down of social barriers and prejudices

QUESTION THREE
a) Identify the various ways in which inequity may enter schools in Kenya today
(5 Marks)

 Geographical Disparities:
o Urban-rural divide in school quality and resources
o Arid and semi-arid lands (ASAL) disadvantages in educational infrastructure
o Concentration of quality schools in major urban centers
o Distance to schools creating access barriers in remote areas
 Socioeconomic Factors:
o Hidden costs of "free" education (uniforms, learning materials, meals)
o Ability to afford extra tuition and exam preparation
o Digital divide limiting access to online educational resources
o Housing instability affecting consistent school attendance
 Gender-Based Inequities:
o Cultural barriers to girls' education in certain communities
o Early marriage and pregnancy interrupting girls' education
o Gender stereotyping in subject choice and career guidance
o Insufficient sanitation facilities for adolescent girls
 Special Needs and Disability:
o Limited facilities for learners with physical disabilities
o Inadequate specialized teaching for different learning abilities
o Lack of assistive technologies and adapted learning materials
o Insufficient teacher training for inclusive education
 Quality Disparities:
o Teacher distribution favoring certain schools and regions
o Variations in teaching quality and teacher absenteeism
o Differences in physical infrastructure and learning resources
o Examination outcomes showing persistent regional disparities
 Language and Cultural Barriers:
o Medium of instruction disadvantaging non-native speakers
o Cultural biases in curriculum and assessment methods
o Marginalization of indigenous knowledge systems
o Lack of culturally responsive teaching approaches

b) Citing examples, discuss the programs that support Free Schooling initiatives
in Kenya (10 Marks)
  Free Primary Education (FPE) Program:
o Launched in 2003 to eliminate school fees at primary level
o Government capitation grants of approximately Ksh 1,420 per pupil annually
o Direct disbursement to school accounts for learning materials and operations
o Example: Provision of textbooks through centralized procurement system
o Challenge: Inadequate funding leading to informal levies in many schools
 Free Day Secondary Education (FDSE):
o Introduced in 2008 and expanded in 2018
o Government subsidy of Ksh 22,244 per student annually
o Covers tuition, learning materials, and administrative costs
o Example: Elimination of tuition fees in all public day secondary schools
o Impact: Increased transition rates from primary to secondary education
 School Feeding Programs:
o Home Grown School Meals Program in food-insecure regions
o Collaboration with World Food Programme in ASAL areas
o Example: Provision of midday meals in primary schools in Turkana County
o Benefits: Improved attendance, concentration, and retention rates
o Implementation: Community involvement in food preparation and supply
 Subsidized Boarding Schools in Marginalized Areas:
o Special funding for boarding facilities in ASAL regions
o Lower fees structure for schools in marginalized communities
o Example: Special girls' boarding schools in pastoral communities
o Purpose: Ensuring access for nomadic and remote populations
 Educational Support for Vulnerable Children:
o Presidential Secondary School Bursary Fund for orphans and vulnerable children
o Equity Bank's Wings to Fly scholarship program
o Example: Full scholarships for high-achieving students from disadvantaged
backgrounds
o Implementation: Collaboration between government, NGOs, and private sector
 Digital Learning Program:
o Initiative to provide digital devices to primary schools
o Example: Distribution of tablets to Standard One pupils
o Infrastructure: Development of digital content and teacher training
o Challenges: Implementation issues including electricity access and maintenance
 Sanitary Towels Program:
o Government provision of sanitary products to schoolgirls
o Example: Distribution through county education offices to schools
o Impact: Reduced absenteeism among adolescent girls
o Challenge: Inconsistent distribution and insufficient quantities

QUESTION FOUR
a) Identify any five goals of education in Kenya (5 Marks)

 National Unity and Identity Formation:

 o Fostering patriotism and national cohesion
o Promoting appreciation of Kenya's diverse cultures and traditions
o Creating shared values and common identity among diverse populations
o Supporting vision of "one indivisible sovereign nation"
 Human Resource Development for Economic Growth:
o Creating skilled workforce aligned with Kenya Vision 2030
o Supporting industrialization and technological advancement
o Preparing graduates for both formal and informal economic sectors
o Developing entrepreneurial skills and innovation capacity
 Individual Development and Self-Fulfillment:
o Developing individual talents and capabilities to full potential
o Promoting critical thinking and problem-solving abilities
o Fostering creativity and personal expression
o Supporting holistic development (physical, intellectual, social, emotional)
 Social Equality and Social Justice:
o Providing equal educational opportunities regardless of background
o Using education as tool for social mobility
o Addressing historical marginalization through inclusive education
o Promoting gender equality through educational access
 Cultural Preservation and Environmental Responsibility:
o Preserving and enhancing cultural heritage and indigenous knowledge
o Promoting sustainable development and environmental stewardship
o Creating ecological awareness and conservation ethics
o Balancing modernization with cultural values and traditions
 Global Competitiveness and International Integration:
o Developing globally competitive skills and qualifications
o Meeting international educational standards
o Preparing students for participation in global economy
o Fostering understanding of Kenya's place in international community

b) With examples, explain the relationship between education and life expectancy
(10 Marks)

 Health Knowledge and Preventive Behaviors:

o Education increases understanding of disease prevention and health promotion
o Example: Higher vaccination rates among children of educated mothers in Kenya
o Example: Better adherence to HIV/AIDS prevention strategies among educated
populations
o Statistical correlation: Each additional year of maternal education associated with
5-10% reduction in child mortality
 Improved Maternal and Child Health Outcomes:
o Educated women more likely to use prenatal care and skilled birth attendants
o Example: Nyanza Province data showing higher survival rates for infants of
secondary-educated mothers
o Delayed first pregnancy through longer school attendance
 o Example: Girls Empowerment Program in Kisumu reducing teenage pregnancies
by keeping girls in school
 Income Effects and Living Standards:
o Education increases earning potential and household income
o Example: Secondary education graduates earn 40-60% more than primary
graduates in Kenya
o Higher income enables better nutrition, housing, and healthcare access
o Example: Educational attainment strongly correlated with improved housing
conditions in urban areas
 Health-Seeking Behaviors:
o Educated individuals more likely to seek timely medical care
o Example: Higher rates of early cancer detection among educated populations
o Better adherence to treatment regimens for chronic conditions
o Example: Diabetes management outcomes correlated with patient education levels
 Lifestyle and Risk Reduction:
o Education associated with lower smoking rates and reduced alcohol abuse
o Example: Secondary school health education programs reducing substance use
o Higher physical activity levels and better dietary choices
o Example: School-based nutrition programs influencing long-term eating habits
 Psychological and Social Benefits:
o Education provides social networks and support systems
o Example: Alumni associations providing social capital during health crises
o Reduced stress through better employment stability and financial security
o Example: Lower depression rates among consistently employed educated
individuals
 Intergenerational Effects:
o Educated parents raise healthier children, creating cycle of improved health
o Example: Children of educated parents in Kenya have lower stunting rates
o Knowledge transfer within families regarding health practices
o Example: Family health practices in educated households showing better
outcomes across generations
 Policy Understanding and Advocacy:
o Education enables better navigation of health systems and policies
o Example: Higher utilization of NHIF benefits among educated populations
o Enhanced ability to advocate for better health services
o Example: Community health initiatives led by teacher associations in rural areas

QUESTION FIVE
a) Apart from Human Capital, identify THREE other forms of Capital (3
Marks)

 Physical Capital:
o Tangible assets like buildings, equipment, infrastructure, and machinery
o Examples in education: School buildings, computers, laboratories, libraries
 o Characteristics: Depreciates over time, requires maintenance, tangible and visible
 Financial Capital:
o Monetary assets available for investment, including cash, credit, loans, and
investments
o Examples in education: Endowment funds, school development accounts,
education bonds
o Characteristics: Highly liquid, can be quickly converted to other capital forms
 Social Capital:
o Networks, relationships, and social connections that facilitate cooperation
o Examples in education: Alumni networks, parent-teacher associations,
professional learning communities
o Characteristics: Based on trust and reciprocity, enables information sharing and
collective action
 Cultural Capital:
o Knowledge, skills, education, and advantages that provide higher status in society
o Examples in education: Academic credentials, cultural literacy, linguistic
competence
o Characteristics: Often inherited or developed through socialization, influences
educational success
 Natural Capital:
o Natural resources and ecosystem services available for human use
o Examples in education: School land, agricultural areas for practical training,
natural learning environments
o Characteristics: Limited supply, increasingly valuable, subject to conservation
concerns

b) Examine the implications of Human Capital Theory (HCT) for Kenya's

university education (12 Marks)

 Curriculum Design and Relevance:

o HCT implies curricula should develop marketable skills aligned with economic
needs
o Shift toward competency-based curricula in Kenyan universities
o Example: Engineering courses redesigned with industry input at Kenyan
universities
o Challenge: Balancing specific vocational skills with broader educational
objectives
o Implementation: Regular curriculum reviews with stakeholder participation
 Expansion of Higher Education Access:
o HCT justifies increased investment in university capacity
o Rapid expansion of public universities (from 7 to over 30 in two decades)
o Example: Establishment of new constituent colleges in previously underserved
regions
o Challenge: Maintaining quality while increasing quantity
o Consequence: Strain on resources affecting educational quality
 Funding Priorities and Resource Allocation:
 o Differential funding based on economic returns of various programs
o Emphasis on STEM fields perceived to yield higher human capital returns
o Example: Higher funding allocation for engineering and technology faculties
o Challenge: Potential neglect of humanities and social sciences
o Debate: What constitutes valuable human capital in contemporary knowledge
economy
 University-Industry Linkages:
o HCT emphasizes alignment between education and labor market needs
o Development of industry partnerships and internship programs
o Example: IBM collaborations with Kenyan universities on technology curriculum
o Implementation: Industrial attachment requirements in degree programs
o Challenge: Limited absorption capacity in formal employment sector
 Cost-Sharing and Private Returns:
o HCT recognizes private returns to education, justifying student contribution
o Introduction and gradual increase of tuition fees and cost-sharing policies
o Example: Differentiated Unit Cost model for funding university programs
o Challenge: Balancing affordability with sustainability
o Consequence: Rising student debt through HELB loans
 Quality Assurance Mechanisms:
o HCT demands demonstrable acquisition of valuable skills
o Strengthening of quality assurance frameworks and accreditation
o Example: Commission for University Education's quality standards
o Implementation: Learning outcome assessments and graduate tracer studies
o Challenge: Meaningful measurement of human capital formation
 Graduate Employability Focus:
o Increasing emphasis on employability metrics as success indicators
o Career services and entrepreneurship training within universities
o Example: Entrepreneurship incubation centers at Kenyan universities
o Challenge: Graduate unemployment despite increased educational attainment
o Debate: Whether universities should focus primarily on employment preparation
 Research and Innovation Orientation:
o HCT recognizes knowledge creation as economic driver
o Increased focus on research outputs and commercialization
o Example: National Research Fund prioritizing commercially viable research
o Challenge: Limited research funding and infrastructure
o Implementation: University ranking systems emphasizing research productivity

QUESTION SIX
Examine the reasons why teacher trainees in university should study "Economics
of Education" (15 Marks)

 Resource Allocation Understanding:

o Enables teachers to comprehend educational funding mechanisms
o Develops awareness of how resources impact educational delivery
 o Helps teachers maximize limited resources in classrooms
o Prepares teachers to participate in school budgeting processes
o Example: Teachers making informed equipment requests based on cost-benefit
understanding
 Educational Policy Analysis:
o Equips teachers to critically analyze education policies
o Provides framework for understanding policy impacts on classroom reality
o Enables informed contribution to policy debates and formulation
o Develops capacity to advocate for evidence-based policy changes
o Example: Teacher participation in curriculum reform consultations with economic
insights
 Understanding Education as Investment:
o Helps teachers appreciate both private and social returns to education
o Enables teachers to communicate education's value to students and parents
o Motivates teachers by clarifying their role in economic development
o Provides framework for understanding education's long-term impacts
o Example: Career guidance informed by labor market outcome data
 Educational Efficiency and Effectiveness:
o Develops teacher awareness of input-output relationships in education
o Enables cost-effective teaching approaches and resource utilization
o Provides metrics for evaluating educational interventions
o Encourages focus on measurable learning outcomes
o Example: Using assessment data to optimize teaching strategies for maximum
impact
 Educational Access and Equity Considerations:
o Sensitizes teachers to economic barriers facing students
o Develops understanding of education's role in social mobility
o Enables teachers to identify and address opportunity costs for vulnerable students
o Provides framework for promoting inclusive educational practices
o Example: Accommodating working students with flexible assessment schedules
 Labor Market Connection:
o Helps teachers understand education-employment linkages
o Enables relevant skill development aligned with economic needs
o Provides insights into changing workforce requirements
o Assists in preparing students for diverse economic futures
o Example: Incorporating marketable skills into lesson content and pedagogy
 School Management Competencies:
o Prepares teachers for administrative roles requiring economic understanding
o Develops capacity for school financial management
o Enables data-driven decision-making in educational leadership
o Provides framework for efficient school operations
o Example: Department heads optimizing subject resource allocation based on
economic principles
 Education Financing Literacy:
o Creates understanding of education funding sources and mechanisms
 o Enables teachers to navigate scholarship and financial aid systems
o Develops awareness of international aid impacts on education
o Prepares teachers to guide students on educational investment decisions
o Example: Advising students on cost-effective higher education pathways
 Contextual Understanding of Educational Challenges:
o Places educational issues within broader economic context
o Enables teachers to understand structural constraints on educational systems
o Develops awareness of how economic factors influence student performance
o Provides framework for addressing economic disadvantages in classroom
o Example: Adapting teaching approaches during economic hardship periods
 Professional Development Perspective:
o Helps teachers understand education market and career progression
o Enables strategic investment in relevant professional development
o Provides framework for assessing returns on further education
o Develops teachers as informed economic agents in education sector
o Example: Making informed decisions about pursuing additional qualifications