How primary education can save billions

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Southeast Asian countries stand to lose billions of dollars in the near future unless urgent measures are taken to enrol millions of out-of-school children in the region, a recent report from Unesco Bangkok showed.

The report, titled the “Economic Cost of Out-of-School Children in Southeast Asia” and co-published by Unesco Bangkok and the Washington-based Results for Development Institute (R4D), focuses on seven Southeast Asian countries: Cambodia, Indonesia, Laos, the Philippines, Thailand, Timor-Leste and Vietnam.It estimates that if primary school enrolment patterns do not change, the unskilled workforce that emerges will cost countries anywhere from 0.1 per cent of their GDP in the case of Vietnam to as much as 4 per cent in Timor-Leste. These estimates are on forfeited earnings alone – they tripled on average when researchers factored in indirect, non-earnings costs associated with out-of-school children. In Timor-Leste, the projected costs outstrip the country’s average annual economic growth.

The report shows that enrolling children in primary school is not only a moral imperative, it also makes sound financial sense, with projected economic gains exceeding estimated increases in public spending in all countries, even those with relatively few out-of-school children, such as Vietnam.

Young people from the poorest households in the region are overwhelmingly over-represented among out-of-school children, as their families are unable to finance their schooling.

“Universal primary enrolment would reduce inequality in the region, which is high particularly in the three largest economies we analysed [Indonesia, the Philippines and Thailand],” the report said. “Thus, there are strong equity and efficiency arguments in favour of endowing out-of-school children with quality primary education.”

An estimated 7 million children are out of school in East Asia and the Pacific, according to the Unesco Institute for Statistics. “This new study makes the economic case for just how much countries stand to benefit from aggressively pushing ahead with measures to get them in school,” says Ichiro Miyazawa, Unesco Bangkok Programme Specialist in Literacy and Lifelong Learning.

“Asean countries have made tremendous strides toward universal primary education; however, this study shows that complacency would be extremely costly when it comes to the millions of out-of-school children remaining in this sub-region,” Miyazawa said. “We hope this report provides decision-makers in this region with a clear understanding of the significant economic benefits of educating out-of-school children in this region.”

The report uses labour market data to estimate the total earnings that will be lost as a result of an uneducated workforce if current primary school enrolment patterns do not change and also estimates the relationship between national education attainment and per capita income in East Asia.

The new study is part of a wider Unesco Bangkok project in partnership with Educate A Child (EAC) that seeks to eradicate obstacles to primary education for children in Southeast Asia, both in policy and practice. The project targets out-of-school children, including those born into poverty, the disabled, migrant and stateless children, girls, those living in remote areas and ethnic minorities.

The losses caused by out-of-school children tallies up to 0.64 per cent or Bt2.47 billion of gross domestic product;

The number out-of-school children is a major economic failure – an under-investment in human capital that results in large income gaps, even though primary school is mandatory;

Mandatory primary education would greatly reduce inequality in the region, particularly in Thailand, Indonesia and the Philippines.