Investing in the education of girls yields high returns by cutting through a vicious cycle. Mothers channel much more of their income to expenditures on children than their husbands do, and educated mothers have healtheir children
Investing in the education of girls could be the one investment with the highest return in the developing world, concludes Lawrence Summers, the World Bank's Chief Economist.[1] He makes four arguments to build a compelling case for action.
First, comparisons of the female fraction of the population in different countries suggest that as many as 100 million women are missing worldwide, primarily due to higher death rates for young girls than boys. The higher death rates are symptomatic of a general pattern of female deprivation in the developing world, especially in South Asia (see the box).
Second, underinvestment in girls is not an automatic consequence of poverty. Nor is it made necessary by any religious or cultural tradition. It is an economic problem that results from a vicious cycle of distorted incentives. The expectation that girls will grow to do little other than serve their husbands reduces parents' incentive to invest in their daughters' human capital. Uneducated women then have few alternatives---so the expectation be- comes self-fulfilling, trapping them in a continuous cycle of neglect.
Third, increasing educational opportunities for girls offers the best prospect for cutting into this vicious cycle. As an economic invest-ment, considering both the private benefits and the returns to other family members, increased outlays directed at educating girls may well yield the highest return of all invest-ments in developing countries.
Fourth, major initiatives to increase female education have the potential to transform society over time. If a larger fraction of girls had gone to school a generation ago, millions of infant deaths could have been averted and tens of millions of families could have been healthier and happier.
Elaborating on the third argument, Summers marshals World Bank evidence to show that educating girls yields prolific benefits.
Most obviously, there is the direct effect of increased female education on the wages of female workers. The evidence is that the returns in the form of higher wages are fairly similar for men and women. As a rough approximation, wages increase by more than 10% to 20% for each additional year of schooling. In Africa and South Asia, where literacy and school enrollment rates are low, the returns to education are particularly high.
Although the increased schooling of boys and girls is similar in its wage impact, educating girls is much more effective in generating social benefits.
Educating women yields high returns by cutting through the vicious cycle of illiterate mothers and daughters. But this is only one of the channels through which education improves health.
Educated women also choose to have fewer children. An extra year of female schooling reduces female fertility by about 5% to 10%. So, a $30,000 investment in educating 1,000 women would avert 500 births. How much does the typical family planning program spend to avert one birth? About $65. Averting 500 births would cost about $33,000, the same as educating an additional 1,000 girls, enough to justify education on family planning grounds alone.
There is a final group of beneficiaries of investments in female education---the women. Maternal mortality rates are ten times higher in South Asia than in East Asia. By increasing knowledge about health care practices and reducing the number of pregnancies of these women, female education significantly reduces the risk of maternal mortality. Based only on the impact on the number of births, and not including what surely are significant impacts on the risks associated with any given birth, an additional year of schooling for 1,000 women will prevent three maternal deaths. Achieving similar gains in adult mortality through medical interventions of average cost-effectiveness would cost close to $7,500.
What can be done to make educating girls more attractive to parents? Summers argues that because there are greater social benefits to educating girls than boys, it is appropriate for girls' education to cost parents less. Scholarship funds should be established and free books and other supplies should be provided for girls.
Providing schooling that responds to cultural and practical concerns is also essential. Female enrollment depends heavily on schools being close by, on the provision of appropriate sanitation facilities, and on hiring female teachers---which, of course, is facilitated by raising female enrollment rates. Flexible hours and the provision of care for younger siblings can also help in some cases.
Are these measures affordable? Considering the very low cost of equalizing educational opportunities for men and women in low-income countries, it is easier to wonder whether the world can afford not to make the necessary outlays. And when compared with development investments outside the social sector, education looks even more attractive.
Take investments in power gen-eration as an example. Developing countries will spend about $1 trillion on power plants over the next ten years. In many of these nations, capacity utilization in power plants is less than 50% due to poor maintenance and poor pricing. The overall return on the physical assets of power plants in a sample of 57 developing countries has been estimated at less than 4% over the past three years and less than 6% over the past decade, returns that do not come close to those of providing education for females.
Summers finds it hard to believe that building only 19 of every 20 planned power plants and using the savings to finance educational opportunity for girls would not be desirable.
Closing the education gap---for $2.4 billion (6K Box Text)
