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Human capital in Asia
Wednesday, 25 July 2012 01:38

Analysts of Asia's economic miracle always cite the region's human capital as one of the main drivers.  But what are the facts behind this claim?

Asian Development Bank Analysis

In fact, emerging Asia has shown strong growth in educational attainment in the past 4 decades compared with other regions, according to analysis by the Asian Development Bank.  In 2010, its population aged 15 and over had an average 7 years of schooling, up by 4.1 years from just 2.9 years in 1970. By contrast, in the same period, the high-income countries raised their average years of schooling by 3.3 years (from 7.7 to 11.0), while developing countries (including emerging Asia) generally added 3.7 years (from 3.4 to 7.1).

Emerging Asia’s strong progress is due mainly to a big leap in average years of primary and secondary schooling, which accounts for almost 90% of its overall increase. Average years of primary and secondary schooling increased 1.9 and 2.0 years, respectively.  In particular, average secondary schooling increased from less than 0.5 year in 1970 to almost 2.5 years in 2010. Tertiary education has grown rapidly, increasing from almost zero in 1970 to 0.3 in 2010. Nonetheless, this still falls short of that in all developing countries.

Overall, educational progress in emerging countries in the past 40 years has brought them to almost the same educational level as the advanced countries 50 years ago. Educational level and distribution for 2010 in emerging Asia are comparable to those of the advanced countries in the late 1960s, and 4 years behind the current level of educational capital in advanced countries (11 years of education).

Yet there are substantial educational gaps among emerging Asian countries.  The levels of educational attainment in Taiwan (11.4 years) and Korea (11.7) in 2010 are higher than the average in the advanced economies (11).  Hong Kong follows with 10.4, Singapore with 9.2 and and then comes China with a stunning increase from 3.5 to 8.4 from 1970 to 2010.  By contrast, in India and Pakistan, although educational progress has been rapid in the past 40 years, the average remains below 6 years—or the average educational attainment of the advanced countries more than 6 decades ago. Average attainment in both Viet Nam (6.5) and Indonesia (6.3) also remain low in 2010.

In terms of the increase in educational attainment since 1970, Malaysia is on top (6 years); followed by Korea (5.4); and Taiwan (5.3).  By contrast, Viet Nam increased only 2.4 years; Indonesia, India, the Philippines, and Thailand added around 3.5 years; and Hong Kong and Pakistan added 4 years.

The proportion of those who have no schooling has declined significantly in both Pakistan (from 73.7% in 1970 to 19.4% in 2010) and India (from 52.3% to 7.1%), where illiteracy rates were highest among emerging Asian countries in 1970. The proportion of 15–24-year-olds reaching at least the primary and secondary levels in Pakistan has increased more than threefold (to 30.9% and 45.8%), and the tertiary level from 1.8% to 3.8%. In India in the same period, these figures have increased more than sixfold and fivefold, respectively. But while India’s primary enrollment rate is now at par with mostemerging countries, its secondary enrollment rate is still very low compared with other emerging countries in Asia.

In China and Hong Kong, progress among the young population has largely been due to improvement in secondary education.  Hong Kong posted the highest proportion of the population of 15–24-years-old to reach the secondary level (82.6% in 2010 from 54.3% in 1970), followed by Malaysia with 78.3%, and China with 75.9%.

In Korea and Taiwan gains at the tertiary levels have been huge among 15–24-year-olds: in Korea, 55.7% of the population now reaches the tertiary level from 5.8% in 1970; and in Taiwan 54.4% from 7.3%.

What are the main drivers of Emerging Asia's improved education performance?  According to the ADB's statistical anaysis, better parental education and income, lower income inequality, declining fertility, and higher public educational expenditures account for higher educational enrollment.

Based on this, Asia’s average years of schooling are forecast to increase to 7.6 years by 2030, from 7.0 in 2010, significantly slower than the increase of 4.1 years from 1970 to 2010. That would put emerging Asia’s educational capital in 2030 at only the 1970 level of the advanced countries, or still 3.5 years behind the level of advanced countries in 2010.

The proportion of those with no education in the population aged 15 years and above in emerging Asia is expected to decline at a more limited pace (from 17.4% in 2010 to 15% by 2030). The proportion of those who attained only primary education is expected to decline from 25.9% to 22.2% by 2030, while those reaching the secondary level will increase to 51.8% and the tertiary level to 11.1%.

Some comments

As impressive as all this sounds, the reality is that in the push to get all children into primary school over the past 20 years, quantity has often trumped quality.  Even when children complete one level of schooling, their minimum competency is too low to handle the next level in many cases.  The result has been a growing number of basic education graduates who leave school without marketable skills.

Dropout rates are also high.  In more than half of developing Asian countries only 7 out of 10 children complete primary school and only 4 finish secondary school.  Poverty is a major driver for dropouts: in rural areas children frequently must work to help the family survive.

While Asia is comprised of increasingly dynamic economies with strong demands for skilled labor, the region also suffers from a gap between education outputs and labor market needs that is widening more rapidly than in other developing regions.  

OECD's PISA Programme

The OECD's PISA Programme (Programme for International Student Assessment) provides us with another take on education performance.  It measures reading, mathematics and scientific ability for 15 year old students.  And while the OECD remains a rich man's club, the PISA programme does include a number of emerging non-OECD countries.

What is striking in the 2009 PISA results is the outstanding performance of North East Asian countries.  Shanghai-China tops the list, beating all the OECD countries (importantly China as a whole was not included in this study, just the city of Shanghai).  Korea, now an OECD member, came second, while Hong Kong was 4th, Singapore 5th, Japan 8th, and Australia 9th.  All of these countries had scores which were statistically significantly above the OECD average, and also above the US, Germany, France and the UK, which were only in the middle of the pack, with scores not statistically significantly different from the OECD average.  Thailand and Indonesia were two other Asian countries included in the PISA 2009 study, but which were way down towards the bottom of the list of more than 70 countries included in PISA 2009.

Some comments

Many argue that these rankings may not necessarily indicate a good basic education system, but rather may point to an extensive "shadow" system comprised of intensive evening and weekend tutoring, which is a big industry in parts of Asia, including Shanghai and Korea.  In Korea, a vast network of private after-school academies known as hagwons impose heavy costs on families, accounting for nearly 3% of gross domestic product.

This phenomenom is now widely criticized in Korea.  Over the years, hundreds of thousands of Korean families have voted with their feet by sending their children to study abroad in their high school or even elementary school years.  Much of this exodus is driven by parents' desire to have their children become fluent in English, a highly prized ability in a country well aware of its need to ccompte in a globalized economy.

But some seek to free their children of the pressure-cooker atmosphere of the Korean education system, with its overwhelming emphasis on acing standardized, multiple-choice tests.  This is one of the reasons why Korea now has the highest suicide rate among the 30 OECD countries, having recently surpassed Japan's rate.  The toll of suicide deaths in South Korea has doubled in the last decade.  A 2010 government report reveals that suicide is the number one cause of death for those under 40 in South Korea.

World rankings of universities

World rankings of universities can also provide insights into the quality of Asia's education systems.  The Times Higher Education World University Rankings are dominated by the US and UK, with California Institute of Technology, Harvard University, Stanford University, University of Oxford, Princeton University, University of Cambridge, Massachuetts Institute of Technology, Imperial College London, University of Chicago and University California Berkeley making up the top ten.

The highest ranking Asian universities are: University of Tokyo (30th), University of Hong Kong (34th), National University of Singapore (40th), Peking University (49th), Kyoto University (52nd), Pohang University of Science and Technology, Korea (53rd), Hong Kong University of Science and Technology (62nd), Tsinghua University, China (71st), Korea Advanced Institute of Science and Technology (94th) and Tokyo Institute of Technology (108th).  The QS Top 500 Universities list provides a broadly similar set of rankings.

Some comments

Many Asia countries are now seeking to create elite centers of higher education consistent with their rising global economic power.  Indeed, to fully participate in the global knowledge economy and benefit from science and scholarship, nations must have at least one research university that is able to function at a world class level.

However, Asia's quest for quality has been halting and uneven with poor countries floundering.  More than money is required -- you also need academic freedom, a competitive atmosphere for staff and students, and no corruption.  True elite universities now stress creativity, critical thinking, problem-based learning, and collaborative practices.  

International students 

Another avenue for students to build their human capital is by studying overseas, and Asian students dominate the lists of international students.  For example, in 2010/11 there were 158,000 Chinese students in the US, representing 22% of the total for America's international students, according to the Institute of International Education.  Following closely behind in second place was India (14%), with Korea in 3rd place (10%).  Also in the top ten were Taiwan at 5th (3%), Japan 7th (3%) and Vietnam 8th (2%).

China and Korea also dominate Japan's international student lists, with China's 86,000 students in 2009 accounting for 61% and Korea's 20,000 stduents representing 14%.  The next countries on the list are: Taiwan 5000 (4%), Vietnam 4000 (3%), Malaysia 2000 (2%) and Thailand 2000 (2%).

China also leads the way in Australia, with 123,000 of Australia's 427,000 international students in 2011.  The next countries on the list are: India 49,000, Korea 22,000, Malaysia 21,000, Vietnam 18,000, Thailand 14,000, and Indonesia 14,000.

Some comments

Studying abroad can offer many benefits like the opportunity, for example,  to access the world's best universities, to gain a global perspective on your field of study, and to become part of a nascent global network.

However, many international students migrate to their country of study.  For home country to maximize the benefits of international students, they must offer sufficient opportunities to be attractive to the students.  Regrettably, too many Asian countries do not pay enough attention to creativity, critical thinking and international collaboration.     

  
References:

Asian Development Bank.  Human Capital Accumulation in Emerging Asia, 1970–2030.  Jong-Wha Lee and Ruth Francisco.  ADB Economics Working Paper Series.  No.216.  September 2010
http://www.adb.org/publications/human-capital-accumulation-emerging-asia-1970-2030

Asian Development Bank.  Development Asia.  "Teaching Prosperity".  April-June 2011.

http://www.scribd.com/full/60416745?access_key=key-edgesj87wqxr751wzy9

OECD Programme for International Student Assessment.  PISA 2009 Results.
http://www.pisa.oecd.org/document/61/0,3746,en_32252351_32235731_46567613_1_1_1_1,00.html

The Times Higher Education World University Rankings
http://www.timeshighereducation.co.uk/world-university-rankings/

QS Topuniversities
http://www.topuniversities.com/

Institute of International Education
http://www.iie.org/

Gateway to Study in Japan
http://www.g-studyinjapan.jasso.go.jp/en/

Australian Government.  Research Snapshot.  International student numbers 2011.
https://www.aei.gov.au/research/Research-Snapshots/Documents/International%20Student%20Numbers%202011.pdf


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