Economics of Education and Health

Do you remember getting polio drops in your childhood? Have you felt the contrast between your parents’ school times and your schooling? Times have changed, so has the economy when it comes to Education and Health. This article aims to shed light on one of the most important fields of economics, in terms of productivity and human capital.  

In any economy, education and health are the basic objectives of development. And if you remember getting vaccinated or the quality of education which has changed so much in just one generation, you’d agree that they are fundamental to enhancing the quality of human life and ensuring economic progress. Education is essential for providing basic moral values, getting ready to face the world by learning modern technology, and developing a capacity for self-sustained growth. Heath is a prerequisite to ensure that a person is productive and is able to perform to his full potential by being in the right state, physically and emotionally, which is necessary for education to thrive.  Their dual role as inputs and outputs gives them a central place in economic development. 

Healthcare comprises hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism, health insurance and medical equipment. There have been some dramatic improvements in world health and education in the last 50 years. Let us look at the major healthcare changes in the last decade:

• India has been polio-free since 2014. We have also eliminated tetanus since 2015.
  

• Swachh Bharat Abhiyan was launched in 2014. Subsequently, the percentage of the population that defecated in the open has come down from 65 to 20. ADD(acute diarrheal disease) has fallen from 64% to 46%. These have resulted in improved health, fewer deaths, and better nutrition.
  

• There has been increased usage of AI and modern technologies. ANMOL and eVIN are two such digital health tools. ANMOL provides better care services to the needy and eVIN helps in tracking immunization.
  

• The average life expectancy of Indians has risen steadily from 64 to 68 years between 2005 and 2015.
  

• The government has claimed to be more accountable in the coming years, they have planned to increase the GDP allocated to healthcare from 1.15% to 2.5% in the next 4 years.
  

The above points show that healthcare has become one of India’s largest sectors, both in terms of revenue and employment. The Indian healthcare sector is growing at a brisk pace due to its strengthening coverage, services and increasing expenditure by public as well private players. There have also been investments and an increase in the budget. Some of the notable achievements of the government:

• Pradhan Mantri Jan Arogya Yojana (PMJAY): This scheme enrolled 16,085 hospitals, including 8,059 private hospitals and 7,980 public hospitals. About 50 lakh people received free treatment under this scheme.
  

• The number of medical colleges in India increased to >560 in November 2020 from 412 in 2016.
  

• According to Sample Registration System Bulletin-2016, India has registered a 26.9% reduction in Maternal Mortality Ratio (MMR) since 2013.
  

• In November 2020, National Telemedicine services completed 8 lakh teleconsultations since its launch, enabling patient-to-doctor consultations from the confines of their home, as well as doctor-to-doctor consultations.
  

India has come a long way in terms of improved healthcare at a cheaper rate. We still have a lot of opportunities in the medical industry. Increased high-end diagnostic services with tremendous capital investment for advanced diagnostic facilities need to be made available. India also offers vast opportunities in R&D as well as medical tourism. To sum up, there are vast opportunities for investment in healthcare infrastructure in both urban and rural India.

“Education breeds confidence. Confidence breeds hope. Hope breeds peace.” — Confucius

Around half a century ago, economists would emphasize on physical capital. In recent years, human capital has become equally, if not more important.Human capital, as the name suggests is the ability to perform labour, using one’s knowledge and skills to produce economic value. Education has a key role in economic development, since it enhances human capital. It can be related to the reason why students with a degree are usually paid more than those without one.  Education refers to the devel­opment of human skills and knowledge of the people or labour force. So, how does a nation’s education system relate to its economic development?

Having better-trained workers creates positive externalities. The productivity of an economy rises as the number of educated workers increases since they have better skill sets, and can perform work more efficiently. Let us revisit the major changes in Indian education system over the last decade:

• Draft NEP for an overall development : The 10+2 system of school education has been changed to 5+3+3+4, for a more holistic approach towards education, with also more focus on research
  

• Digital learning platforms and smart classrooms : With the rise of digital education, a lot of platforms have started offering online courses and MOOCs to help the students be market-ready without any physical barriers. Chalk boards have been replaced with smart screens for an enhanced learning experience.
  

• Promotion of entrepreneurship and project based learning.
  

To put it simply, Gone are the days when one had to wait for a teacher to get back to you to clear your doubts. In this age of technology, we can learn things at any time, from any place. 

Education and health are joint investments in an economy, they go hand in hand. A greater health capital may increase return of investment in education by the following means:

• Increased attendance in schools and colleges

• Children will learn more efficiently

• They will be able to use educational resources more productively at any point of time
  

On the other hand, a greater education capital will raise return on investment in health:

• Schools teach basic personal hygiene skills and sanitation

• Health programmes rely on skills learned in school

• An improvement in productive efficiency from investment in education raises the return on lifesaving on health. 
  

Education and health are indispensable to economic development. A balance between the both promotes not only economic development, but productivity, and generates individual income per capita. Its influence is noticeable at the micro level of an individual family.