Policy Failure in Achieving Universal Basic Education: A Theoretical Analysis

Abstract

Universal attainment of basic education is recognised as a key development goal; whereas early-age work is considered as a barrier to achieving this goal. The literature suggests that returns to education are larger than those of early-age work, and that child-labour results in long term social loss that reduces human capital. This study evaluates the argument that earlyage work can itself lead to accumulation of human capital when it takes the form of apprenticeship career path. The paper develops a model that allows a rational agent (parent) to compare the early-age work as apprenticeship career path with the formal education career and shows that the parents’ career choice for their child will depend on the lifetime earnings of both careers. The theoretical model is further extended and empirically tested to check whether benefits of education are higher for all levels of education. The simulation analysis suggests that for lower level of education up to Grade-12, the benefits of apprenticeship exceed the net benefits of education whereas, at Grade-12 and beyond, the net benefits of education in terms of earnings outstrip the apprenticeship career. The study implies that early-age work may not necessarily be inefficient when compared with low levels of schooling and that any intervention should ensure universal education for all without compromising skill development of resource poor children. This can be achieved through making skill development complementary to education. JEL Classifications: H44, H52, I26, J24 Keywords: Child-labour, Basic Education, Human Capital, Public Policy