CHAPTER -11

The role of education in bringing about social status and its

linkage with employment has attracted the attention of researchers and

social sc~entists from very early times. The early attempts to measure

the contribution of education to economlc growth were made by

Schultii (1961) and Dcnison (1962). Schult7's analysis was based, on

'rate of re~urn to tlunian Capital' approach and Denison's was based

on the 'gro\cth accounting' approach. Both of these showed that

education contributes directly to the growth of national income by

improving the skills and productive capacities of labour force. The

'rate of rcrum approach' adopted by Schultz to nieasure the

contribut~on of education to economic growth suggest that a

substantial portion of the rate of growth of output in the U S is due to

investment in education. The 'growth accounting approach' is based

on the concept of an aggregate production function which l ~ n k s output

( Y ) to the ~nput of physical capital (K) and labour (I,). Denison

calculated that between 1930 and 1960 about 23% of the rate of

growth of output in the US was due to increased education of the

labour force.

Literature on Education and Economic growth

Early works by Bowman and Anderson (1963), demonstrated a

correlation between the level of per capita income and level of

educational development. According to them the fact that the rich

countries have higher levels of literacy and spend more on education

than poor countries means that education is both a cause and a result

of economic development.

Choudhuri (1969) has examined the relation between

education and productivity in Indian agriculture. Taking the 1961

data for the level o r education for agricultural workers and the gross

value of agricultural produce in each district he obtained a relationship

between literacy and yield per worker. Baldev Sing (1978) analysed

the inipsct o r education on farm production on the basis of the data

collected from October 1960 to January 1969 in 288 fann households

of Haryana. According to him the level of farm production is

signiticailtly higher in farms where the decision-maker is literate than

where the decision maker is illiterate. The World Bank research

(1980) on the links between education and productivity of farmers

showed that investment in iniproved seeds, irrigation and fertilizers is

niore productive in tenns of increased crop yields when farmers have

tivc years of primary education rather than none.

Wheeler (1980) found that on the average the increase in the

literacy rate from 20% to 30% causes GDP to increase by 8% to 16%.

He considered that general investment has less effect on growth rate

when it is not supported by educational investment.

Easterlin (198 1) examined the relationship between education

and economic growth in twenty five of the largest countries of the

world and concluded that the spread of technology of modem growth

depended on the greater learning potential and motivation arising from

the development of formal education.

John Vaizey et al (1972) contended that a measure of human

capital 1s as elusive as is the concept of physical capital. In their view

the key to understanding the role of education in growth and the

educational demands made by growtli Iles in understanding linkages

and coniplementarities t h ~ t exist between skilled labour, physical

Capital and other factors.

Thc relationsl~ip bctween investment and econonlic growth

was examined by N.Krishna Rao and K. hlukherjee (1967) and they

have worked out correlation coefficients between primary, secondary,

higher, higher tecln~cal and higher non technical educat~on and the

growth of the state per capita income. They have found that except

higher technical education and the rate of growth the correlation

cocfficient for all other levels provcd either insignificant or negative.

The relation between economic development and technical

educat~on in India was drawn by Crane Robert (1966). He concluded

that technical education was inadequate in India before the World War

I and den~onstrated that i t might have been one of the causes for

India's industrial backwardness.

In 'Returns to Education-An International comparison',

G.Psacharapaulos (1973) made an attempt to fill the gaps in the

understanding of the relattonship between education and the economy

as a whole. It explains the connection between the number of

educated persons and the productive efficiency of the economy. He

concluded that education is a good investment but it is the lower

educational levels that exhibit the highest returns. Also private returns

to all levels of education are much higher than social returns.

The findings of John.B.Knight and Richard.H.Sabot (1990) in

'Education productivity and inequality' provide strong backir,g for the

human capital paradigm. In their attempt to highlight the contribution

of human capital to economic development they examine the status of

education as an investment good that increases labour product~vity

and contribute to economic growth.

Jandhyala.B.G.Tilak (1994) examined the growth and

investment in education in the last two or three decades and analysed

the contribution of education to development. After examin~ny some

famous works on the role of education he reafiirmed the faith in the

role of education In fostering development.

N.V. Varghese (1992) contended that at present technology

forms the m a n Instrument of domination of the poor by the rich

nations. 'I'echnology import, according to the author, becomes a threat

to self reliant development. So by all means import of technology

should be restr~cted. This can be facilitated by developing a

professional body at the national level to deal with matters concerning

technology, This will prepare the ground for developing an

indigenous technological base. The author concluded that education

can become an important tool both in the generation and

dissemination of indigenous technology by revitallzing the now

defunct innovation chains.

The document 'T)evelopment and I'ducation' authored by

Brahni Prakash, N.V. Varghese and L.S. Ganesh (2000) polnts to the

reality that ~t is the process of technological Innovation as regulated by

the institution of niarkct forces which Corms the basls of social

development during the modern period. In their view education in the

future will have to address itself to the millions of people who are as

yet uncovered by lhc educational systeni. According to the111

educat~onal developme~it should be closely related to thesc aspects.

There sliould be a detcrniined lnterventlon in terms of plannlng and

managenicnt of education.

Ilarh~son and Myers, have examined the pattern of relationship

between hulnan resource development and economic growth. indices

were constructed on the b a s ~ s of enrolnlent ratios at various stages of

education in different countries and have arrived at various policy

conclusions.

Education and Employment

Mark Blaug, Layard and M.Woodhall(l969) found that there

is a certain sluggishness in the reaction speed In the market for

educated persons. According to them the sluggishness of the labour

market for the educated is due to the difficulties of changing jobs,

preference given to older candidates, non availability of information

on jobs etc. They conclude that the persistence of educated

unemployment in India can be explained by the resistance of educated

people to a fall in earnings which should accompany the increase in

their relative supply.

Richard Layard (1999) in the work entitled 'Tackling

Unemployment' explains what causes unemployment and proposes

what can be done to reduce it. He shows that the most important ways

to reduce unemployment are through welfare reform and improved

wage flexibility. The author suggests that all solutions for

unemployment should be analysed within a single coherent framework

that actually explains why unemployment exists as it is.

Mridul Eapen (1979) made an attempt to understand the

relative acuteness of the problem of unemployment in Kerala. She

made an effort to relate unemployment to the trends in employment

and real output. According to the study the problem is serious in rural

areas. A solution which can be sought is migration.

'Labour Markets in Action' written by RichardLFreeman

(1989) deals with some of the major research topics namely the

market for highly educated workers, comparative labour market

institut~ons etc. According to the author the dynamic force in the

college job market is the demand for graduates which depends to a

large extent on the structure of the economy, industrial activities and

changes in technology. Analysing the American job market for the

college graduates the author is of the opinion that overeducation will

be a problem in the job market for the next two decades also.

Layard and. Saigal (1966) made a study on international

manpower comparisons in their article 'Educational Occupational

characteristics of manpower-an international comparison' in the

British Journal of Industrial Relations. They postulated the

dependence of occupational -educational composition of the labour

force on the sectoral productivity of labour.

George Psacharapaulos and Maureen Woodhall (1985)

explained the hndamental issues which have to be addressed in

choosing an appropriate strategy for educational investment. If

educational investment is coordinated with other forms of investment

it will bring about better results in the development of human

resources.

The book entitled 'Employment and Unemployment in

Kerala'- some neglected issues- presents a comprehensive analysis of

the problem of unemployment in Kerala. In that book the author

E.T. Mathew (1997) is of the opinion that the average Keralite prefers

a salaried job to self employment and that has resulted in undue

emphasis being placed on liberal arts and science education to the

detriment of vocational and technical training which could lead more

easily to employment.

N.V.Varghese (1996) analysed the crucial phenomenon of

continued expansion of enrolments in higher education even when

employment opportunities for university graduates are declining. In

the article 'Higher Education and Employment of the Educated in

India' the author argues that this is primarily due to 'the qualification

escalation' process taking place in the labour market. An escalation of

educational qualification for jobs increases individuals' demand for

higher education.

Joseph. A.Thomas brought out a clear description of the

education-employment situation in Kerala in 1990. According to the

author increasing demand for education in the face of rising levels of

unemployment among the educated and the rising inequality in

economic achievement are two of the problems faced in the state.

In the book, 'Education, Unemployment and Econonlic

growth', the author Alan.L.Sorkin (1982) made an attempt to provide

a comprehensive treatment of the problem of unemployment. He

suggested the need for careful planning of the educational system to

suit the needs of economic development.

According to K.Ramachandran Nair (1995) there is a close

interaction between education, employment and development. He is

of the opinion that education develops not only aptitudes but also

attitudes.

In 'The Market for the Educated in Kerala' Chandan

Mukherjee describes the peculiarities of the job market for the

educated in Kerala. According to the author the main form of

employment desired by the educated is the salaried one.

'Labour Market and Human Resource Planning in Asia'-

perspectives and Evidence- by M.Maqtada and A. Hildeman (1993)

has undertaken a selective approach and is confined to themes that are

related to manpower and skills development, employment and labour

market analysis. The authors consider that planning for human

resource development is being increasingly considered as an

inseparable aspect of overall development planning in an economy. A

major thematic consideration of the work is the connection between

manpower planning and labour market analysis as two approaches to

human resource development.

A Comprehensive study was made by S.S. Khanka (1988) on

the labour force, employment and underemployment in the Kumaon

region of Uttar Pradesh. It examined the occupational structure of the

labour force, unemployment and underemployment of the region. The

study concluded that the problem in the Kumaon region is not

pr~marily that of unemployment but that of low productivity and

income on account of the underdeveloped and virtually stagnant

shucture of economy.

K.V. Easwaraprasad (1979) in his study on the problem of

unemployment of professional manpower in India examined the

influence of several factors on the unemployment of highly qualified

professional manpower. The study showed that the duration of

unemployment varied significantly among different categories of

manpower and unemployment problem was one of mismatch between

job expectations generated by the educational system and the job

opportunities available in the labour market.

The situation of educated unemployment is explained by

M.D.Apte (1975) in his article 'Education and Unemployment in

Kerala'. According to him the progress of education has created the

problems of ever growing expenditure on education, the mounting

problem of unemployment and that of export of educated manpower

in Kerala. The migration of state's educated manpower created a

shortage of skilled manpower.

P.V.Rajeev (1991) examined in detail the problem of

unemployment in Kerala in his work 'Economic Development and the

Unemployed.' According to him the employment generation in Kerala

demands more investment in productive sectors and in public sector

undertakings compared to investment in public administration and

social services. In his view restriction of entry into higher education

will be a solution to the problem of educated unemployment.

K.N.S. Nair (1994) traced the need for proper linkage between

educational planning and employment planning. In the article

'Employment and Unemployment - Regional Dimension Vs National

Strategy, he presented the vlew that educational system needs

restnrcturing in order to integrate it with a general strategy to develop

human resources. In the absence of realistic employment planning in

our educational and economic planning there is the mounting problem

of educated unemployment.

B.A. Prakash (1988) examined the relationship between

economic development and changes in the pattem of employment in

Kerala in his article 'changing structure of employment in Kerala'.

He contended that Kerala's development during the planning era is

associated with a shift in employment from primary to the tertiary

sector bypassing the secondary sector. In another study entitled

'Educated Unemployment in Kerala' the author examined the

magnitude of educated unemployment in the state. In his opinion the

lack of adaptability of educated labour to the changing employment

pattem in the economy has resulted in massive unemployment among

the educated. According to him the lack of suitable avenues of

employment in the productive sectors of the economy lead to a

preference for jobs in the service sector.

Gopinathan Nair and Joseph Thomas (1984) revealed the

paradox of increase in private demand for education even in the face

of high levels of unemployment. Also according to them,

unemployment is acting as a stimulus to private demand for education.

While drawing out the education-job market linkage in Kerala they

identified the existence of serious mismatch between education and

employment in the job market.

Oommen's study (1994) entitled 'Acute Unemployment

Problem of Kerala-some explanatory hypothesis- is a deep and

comprehensive study of the problem of unemployment especially

among the educated. According to him the problem of unemployment

experienced in Kerala is of a structural nature which is being produced

and reproduced through a stereo type formal and informal system of

education.

The work entitled 'Education and Employment Problems in

Developing Countries' written by Mark Blaug (1973) deals with the

fundamentals of educational planning especially in developing

countries. According to the author educated unemployment is due to a

mismatch between aspirations and opportunities. Education converts

underemployment into open unemployment Blaug stressed the fact

that public subsidies to education always result in excess demand for

education and hence in excess supply of educated manpower.

The work 'Graduate Unemployment in India' authored by

J.L.Azad (1975) endeavours to prove that unemployment and under

employment among the educated persons in general and graduates in

particular results in a skewed socio economic development of the

country. According to him the large involvement of educated

personnel in teaching and administrative jobs indicates the suitability

of general education for such activities or the educated prefers !.hose

jobs due to the nature of work involved. The study proves that the

incidence of unemployment among the arts personnel is the maximum

whereas the same among the personnel from the discipline of

education is minimum. The author considers that the rate of

unemployment among the educated persons may be due to their

hesitation towards self employment or due to their oversupply or

preference for wage employment. The author concludes by

emphasizing that the problem of educated unemployment is multi

dimensional.

In the 'Politics of Manpower' T.N.Dhar (1976) stresses that

graduate unemployment can be attributed to the disproportion that

exists between educational provisions and the absorptive capacity of

the economy for educated manpower. According to him limited

employment opportunities for the educated have partly resulted in

increasing the demand for education in order to have a competitive

edge in the job market. He contends that because there are too many

educated seeking jobs, educational requirements of jobs have come to

be constantly upgraded. In his view the responsibility for educational

inflation does not rest with only those who demand it, but also with

those who supply it.

The Problems of Higher Education Regarding cost, finance and

other matters

The Report of the Education commission (1970) Govt, of

India, while refemng to the cost and finance of higher education

remarked that the universities should be Freed From direct public

accountability of their expenditure. The commission recommended

for a reduction of wastage at all levels of education.

Panchamukhi (1965) calculated the cost of education in India

for the period 1950-51 to 1959-60. According to him the total cost of

education constituted 6.2% of GNP in 1959-60.

Ruddar Dutt (1974) studied the cost of education in India with

the aim of analysing growth and variation in educational expenditure

during 1951-61 with respect to objects, institutions, state sources and

management. The study revealed that the total expenditure increased

by 201% and the expenditure per pupil rose by 162% during the

period. He found that the relative contribution of fees to total

expenditure on education was declining.

Tilak (1987) analysed the returns to investment in education of

the weaker sections as compared to others. He found that while social

cost increased with the level of education institutional cost formed

only a small part of total social cost.

Ramachandran (1987) attempted to analyse the problems of

higher education in India with special reference to Kerala. The study

revealed an evergrowing expansion of enrolment, institution and

expenditure over the period. Whereas the total expenditure was

increasing year after year the growth in fee receipt was very low. He

opined that the bulk of the public expenditure on higher education was

spent for the development of Arts and Science Colleges in the state.

He pointed out that salary constituted the largest component in the

total cost of education.

E.T. Mathew (1991) analysed the sources and uses of funds of

private colleges in Kerala for the period 1972-86. He found that

among the institutional sources of finance, grants from the state

govemment constituted over 90%. He revealed that the inadequacy of

govemment grants was overcome by most of the private management

by resorting to compulsory donations.

In his book, 'The cost of Higher Education in India' A.Abdul

Salim (1997) analyses the phenomenal growth of higher education

during the period since independence. According to him the burden

on the govemment is heavy since the receipts from the higher

education sector is extremely low and remains virtually unchanged.

He emphasizes the need for bringing about systematic changes in the

policy of subsidies and pricing of higher education after a careful

analysis of socio economic status of the students.

V.S. Raju (1996) in his article 'Higher Technical Education-

Linkage between academia and Industry' discusses how industry-

institution interaction can be fostered for the betterment and benefits

of both. According to him the quality of graduates is generally found

to be deficient in industry orientation due to the absence of industry

exposure for both the students and the faculty.

Bikas.C.Sanya1 (1996) analysed various issues open to the

countries in tackling the problems of higher education in the article

'Education at the close of the 201h century'. He emphasized that the

education system should cooperate with industries to generate new

technology to industries to respond to the changes in the scientific and

technological domain.

S.J. Patel (1965) in 'Educational Distance between Nations-Its

origin and prospects' found that educational distance between nations

is much narrower than economic distance. According to him the

present day advanced countries have accomplished their educational

transition within a short span of time. Also he found that a faster

development of the higher stages of education constitutes an important

element in educational planning in developing countries.

In the 'Economy and Human Resources' V.P. Batra (1978)

studied how the problems of manpower planning has been

successfully tackled ~n advanced countries like the USA and Russia in

order to derive a conclusion from their experience. But he was unable

to accept their solution because in the context of a developing country

like India the solution offered by the West in inconsequential. The

author suggests that there is the need for setting up an organizaticn at

the central and state levels for the assessment of manpower situations,

forecasting manpower supply and demand etc.

The World Bank Publication (1997) 'China-Higher Education

Reform' reviewed the efforts of China for reform of higher education

over the last ten years in relation to the specification delineated in

'Decision on Education Reforms'- the document adopted by the

Chinese government in 1985. The reform agenda recommended are

the relationship between the universities and the state, changes in

university management, the financing of higher education, quality

improvement in instructional programmes and strategic priorities in

achieving reform goals.

The paper written by U.Antwerp (1998) in Economics of

Education Review entitled 'The demand for higher education in

Belgium' investigated the determinants of the spectacular growth in

higher education and enrolments in Belgium since 1953. In the

Belgian education system the enrolments are solely demand driven

and is not subject to supply constraints. The author used a demand

model integrating consumption and investment aspects and tested the

specification based on time series data between 1953 and 1992.

According to them the income and foregone earnings seem to be

driving emoluments.

The article entitled 'Perceived Rates of Return to Higher

Education in cyprus written by Maria Eliophoton (1997) estimated the

expected rates of return to higher education in Cyprus using logistic

regression analysis. The results of the estimates are supportive to

human capital theory. The mean rate of return to higher education is

considerably higher than that of secondary and other lower levels.

The perceived rate of return to higher education is found to have

significant effect in the pupils' educational intention.

The study group on Resource Mobilisation for education

constituted by the Central Ministry of Education in its report (1970)

reviewed the existing measures adopted by the state governments for

raising resources for education and suggested additional measures for

raising resources and using these resources and other facilities. If

suggested that educational cess should be levied in all the states and

tuition fee may be raised.

Planning and Utilisation of Human Resources

A survey on the utilisation of educated persons in Maharashtra

(1967) was conducted during the 111 plan period by the planning

department of Maharashtra in order to ascertain the utilisation pattern

of educated persons with a view to providing insight into the

relationship between the expansion of courses of study at the college

level and the pattern of employment of graduates belonging to

different disciplines. The study concluded that professional and

technical personnel generally find employment in occupation for

which they have been trained while in the case of general arts and

science graduates occupation is often unrelated to the subject of study.

A detailed study on the problem of utilisation of scientific and

technical manpower in India was made by P.R. Sengupta (1977).

According to him the distortions in the utilisation and employment

pattern of scientific and technical manpower is primarily due to the

undue expansion in educational facilities with a view to meet the

future demands for technical manpower in the development process of

the country.

Kamalesh Ray (1 977) who attempted to study the problems of

scientific manpower utilisation in India noticed that a high degree of

unemployment prevails among the graduates and post graduates in

science. The author contended that there is also a comparatively high

out turn of graduates in Mathematics apart from general arts and

science graduates, which is the outcome of the 'open door' policy of'

the government.

V.K.R.V. Rao (1965) in a seminar on 'Employment

Information and Manpower utilisation' viewed on the vital need for

linkage between utilisation of manpower and manpower planning

which links it up with the training programmes of manpower. For the

efficient planning of manpower it is imperative to have reasonably

accurate information about the existing status in terms of occupational

and industrial classifications, levels of training and interconnection

between these different levels. He emphasized that the educational

system of the country should be closely linked with manpower

requirements.

The planning and social welfare Department of Bangalore

( 1 968) conducted a study on the utilisation pattern of educated persons

in Mysore in order to analyse the utilisation pattern of educated

persons both at the graduate and post graduate levels in general

technical and professional fields of education. The study found that

the degree of underutilization of education was serious in the case of

general education.

R.C. Dutt (1977) who examined the under utilisation of

manpower in India suggested that there is the necessity for

emphasizing labour intensive technology. He pointed out that the

industries in the country have only a narrow base and therefore their

contribution to the solution for the problem of educated

unemployment is insignificant. The encouragement and development

of the agricultural sector will be a fruitful solution to the problem of

unemployment.

IAMR (1978) conducted a study on manpower utilisation in

the power sector with a view to examine the problem of job match

with respect to occupational categories such as executives, supervising

and skilled personnel etc. The study concluded that the power stations

were not having a rational basis for staffing pattern.

A study conducted by the Department of Economics and

Statistics (1983) on the Utilisation of Postgraduates in Medicine

aimed at evaluating the pattern of utilisation of specialists under

modem medicine. It revealed that one third of the post graduates were

not working in the field of their specialization. They suggested the

setting up of more special units to tackle the problem of under

utilisation of specialists.

Another study conducted by the planning Department of the

Government of Kerala (1969) to analyse the utilisation pattern of

educated persons aimed at providing information on the expansion

and starting of courses at the college level and the employability of

those courses. It studied the pattern of employment of graduates and

postgraduates in different faculties and concluded that there is severe

underutilisation of manpower.

'Educational Planning' authored by Frank.W.Banghart and

Albert Trull Junior (1973) is an attempt to synthesize new approaches

with the old approaches to the process of educational planning. It

reveals the general tools of analysis, evaluation and control which can

be used in educational planning process and especially related to the

planning of physical environments conclusive to learning.

In 'Planning educational systems for Economic growth'

Samuel Bowles (1975) opined that the maximization of hture national

income can be made possible through the optimal transformation of

the labour force from the uneducated to educated workers subject to

resource constraints imposed on educational sector. The author

combines theory and practice addressed to the problems of economic

efficiency.

K.S.Chalam (1993) in his work 'Educational policy for Human

Resources Development' attempted to conceptualize human resource

development in the context of Indian realities. He focussed attention

on innovation in the field of education and suggested alternatives.

In the World Bank Economic Review (1998) the article

entitled 'Evaluating Educational Reforms-Four cases in Developing

Countries contributed by Elizabeth M.King and Peter.F.Grazen

discusses the decentralisation reforms in four developing countries-

Latin America, El Salvador, Pakistan and Philippines. It studies the

government subsidy Programme in Pakistan and evaluates a pilot

study programme in the Philippines that uses different school inputs to

prove student enrolment and performance in primary schools.

In 'Economic Dimensions in Education' Martin.0. Donoghue

(1971) showed how education can have significant economic

consequences which can affect both the individual and social demand

for education. In his view the popular way of linking the economic

and educational patterns is to prepare projections of future

employment levels which can be used to derive estimates of the

associated educational levels.

In the article 'Demand supply imbalances of higher education

in Kerala Prabhakaran Nair (1985) showed that imbalance in demand

and supply imposes an increasing cost of higher education in Kerala

and that in turn imposes a serious strain on the state economy. The

author concludes that the demand for higher education in Kerala -

both general and technical - has been very high. He highlights the

problem of under employment. According to him the inability of the

government to absorb the unemployed as productive manpower

creates serious constraints and a heavy burden on the state economy in

view of the high cost of higher education.

In a major study of the efficient utilisation of educational

facilities in Gujarat, Lakdawala and Shah (1976) analysed the

efficiency at school and college levels of education. They provided a

regression analysis in support of the optimum size of enrolment of a

college as suggested by the Education Commission.

This study endeavoured to derive a U-shaped cost curve in education

at the school and college level.

An attempt to build programming model in education was

made by Panchamukhi (1969). This model recognized educational

values in the provision of education which is being ignored in the

attempts at maximising ecoriomic returns to education. The objective

function of the model is the minimisation of the cost of the supply of

education subject to the constraint that the educational level of the

country has an increasing trend. The model reminds of the danger of

over emphasising the economic aspects of education and ignoring the

other aspects.

Mark Blaug et a1 (1973) in their famous work, 'The utilisation

of educated Manpower in industry' investigated the influence of the

education of the labour force on the productivity and profitability of

the firm. According to them any exploitation of the firm's economic

performance that neglects the education element is less than

satisfactory. The underutilization of manpower in industry in terms

of the difference between required and attained years of education is

explained and in their view a relation between the jobs that people do

and the education they have received are significant determinants of

the level of business of the enterprise.

The Report of the Ashok Mitra Commission (1999) seeks to

make a link between 'democratic polity and educational process'.

Unlike the earlier commissions which concentrated on rationality and

management alone, the Ashok Mirtra Commission draws on the

premise of equity and excellence for the people of Kerala. The report

suggests a decentralization (both academic and administrative) of

universities. It calls for a revision of fees and at the same time

recommends for scholarships to deserving students. The commission

considered the extreme politicisation of Kerala education as a

significant challenge faced by Kerala and it suggests people's

education for creating a humane society capable of realising its

economic, cultural and intellectual potential.

Elizabeth.M.King and Peter.F.Orazem (1999) discuss

decentralization reforms in two developing countries - Latin America

and El Salvador. The study examines government subsidy programme

in Pakistan and evaluates a pilot study programme in the Philippines

that uses different school inputs to improve student enrolment and

performance in primary schools.

Bolina (1995) focusses on the gaps and deficiencies in the

system in the present form in the light of academic findings. The

author suggests a pilot programme based on the model of the German

dual system of vocational training on an experimental basis as it is

cost effective and equips the individual with a relatively high level of

skill.

'Economic Analysis for Educational Planning - Resource

allocation in Non Market Systems' edited by Karl.A.Fox (1972)

described several tools of economic theory which are highly relevant

to educational planning. The author utilised the tools of economic

theory, mathematical programming and systems analysis to clarify

important problems of resource allocation in educational systems.

Ramanujam (1969) justified the hnctional relationship of

manpower requirements with output in his work, 'Planning Models

for, Optimum allocation of Resources in Education'. He had done the

estimation of occupation - educated manpower requirements for India

for 1970 - 71, 75 - 76 and 1980 - 81 using the input output data for

the Indian Economy.

'Accelerator Theory in Education' by S.K. Moorthy and Thore

S.A.O. (1959) presented an analysis of the interdependence of the

educational system within itself. They developed a dynamic stodent

flow model which they called 'accelerator theory in education. They

showed that different levels of education are interdependent and the

growth in one level accelerates the growth in the other high level.

The Institute of Applied Manpower Research (1977) had

conducted studies for estimating manpower requirements using fixed

input coefficients. But since education itself is involving a greater

time lag the fixed coefficients approach is irrelevant.

'Economics of education and Education of an Economist'

authored by Mark Blaug (1987) focussed on the theoretical basis of

the economics of education namely human capital theory, screening

hypothesis etc. and addressed the educational priorities in developing

countries particularity the vexed question of educated unemployment.

C. Radhakrishnan (1985) projected the manpower

requirements for Kerala's economic development using the Parnes'

Mediterranean Regional Project (MRP) method to make manpower

projections and estimated the additional requirements of manpower by

occupational groups and educational categories respectively for the

period from 1980 - 8 1 to 1984 - 85.

Migration and Emigration of the educated

'Dynamics of Migration in Kerala- Dimensions, Differentials

and consequences,' is a comprehensive account which gives the

positive as well as negative effects of migration and emigration of

Keralites, the cost and financing of migration etc. According to the

authors outmigration has been on a declining trend. In recent years

the number of outmigrants is even lower than the number of return

migrants. The authors K.C. Zacharia et al (2000) conclude that

emigration will continue to increase for some more years but return

emigration would increase at a faster rate resulting in a period of net

negative international migration. In the view of the authors if

emigration is to be maintained at least for some more years

irrespective of the trend in return emigration, remittances are also

likely to increase for some more years.

In the book 'Migration of Knowledge Workers - the second

generation effects of India's brain drain, Binod Khadria (1999)

proposed various means to turn the exodus of talents or knowledge

workers into the advantage of the home country. He argued for

strengthening the capabilities of the nation in the fields of education

and health in order to restore the productivity of manpower in the

economy. The author took a positive approach to brain drain in

contrast to the predominantly negative approach to the situation.

The article 'Economics of brain drain' written by Rohinipati

Sinha (1968) highlighted the possible causes for the problem of brain

drain. According to the author the relative decline in the income

position of the high level manpower is responsible for the faster rate

of growth of emigration

In 'Brain Drain Again' B.Thornas (1967) contended that

United States is the world's largest exporter of physical capital, and

the largest importer of human capital. According to him there is a

strong presumption that the chief net importers of human capital are

deriving a national advantage while the net exporters particularly the

under developed countries are losers. According to him any

curtailment of the right of the individual to leave his country would be

contrary to the principles of free society.

The Committee on International Migration of talents (1984)

studied the impact of migration on the development process of India.

According to the committee the annual migration represents a

substantial portion of the Indian University graduates produced each

year. But migration and emigration of talents have not constrained

India's economic development. The Committee argues that the

surpluses of Indian talent which tend to push the productivity and

incomes of trained manpower down, will lead to migration only if the

productivity and incomes of the same manpower are relatively greater

in the developed countries.

P.R.Gopinathan Nair(1998) in his uork Dynamics of

Emigration from Kerala-Factors, Trends, Patterns and policies

observed that emigration of Keralities is the result of the activities of

the British who recruited indentured labour from different parts of

India for employment in British Plantations in Singapore, Malaya

Ceylon etc. According to him in Kerala which is ridden with chromic

problems of overpopulation, unemployment and economic

backwardness the large scale migration and exodus of people and

massive inflow of money should have brought substantial

improvements in the economy. But such expectations have not been

realized because consumption is the conspicuous exception in Kerala.

According to Subodh Mohanti (1995) one of the main

resources by which the industrially developed countries sustain their

pace of development is through their brain capital. In his work

'Scientific Communities and Brain Drain' he argued that the

economic dimension of brain drain is a symptomatic manifestation of

complex and deeper issues related to the structure, organisation and

dynamics of the scientific community in the context of its national and

international linkages. He concludes that while the economic and

material factors influence the outflow of scientists and technologists,

these are not the only factors that provide a complete explanation of

brain drain.

The foregoing review of selected literature on different aspects

of the economics of education reveals that most of the studies

concentrated on issues such as cost and returns of higher education,

dimension of unemployment etc. None of the studies endeavoured to

analyse the extent of the mismatch in the job market for the educated

and in that respect the present study is worthwhile.

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