poor education constraints on growth and development

• Poor education


  Leads to a fall in the skills and therefore decreases human capital
• Decrease in human capital


  Leads to a fall in the productivity of a work force
• Fall in productivity


  Leads to leftward shift in the LRAS
• Leftward shift in LRAS


  Limits real GDP and therefore limits economic growth
• Chain of reasoning


  1. Low human capital

  2. Low productivity

  3. Keeps LRAS to the left

  4. Limits real GDP

  5. Limits economic development
• Low incomes


  Government unable to collect much income tax revenue
• Less income tax revenue


  Government has less money available to invest in development
• Lack of funds to invest in


  • Healthcare to avoid diseases like Hepatitis B, Diphtheria and Measles
• Improve education


  1. People receive a better education

  2. Leave school with higher human capital

  3. Have the knowledge and skills to make them more productive workers
• Increase in productivity


  Shifts the long-run aggregate supply curve to the right
• Shift in LRAS to the right

  Increases real GDP and economic growth
• Higher productivity


  Increases workers' incomes
• Increase in workers' incomes


  Workers pay more income tax
• Increase in income tax revenue


  Government receives more revenue to spend on development
• Chain of reasoning


  1. High human capital

  2. Higher productivity

  3. Shifts LRAS to the right

  4. Increases real GDP

  5. Increases economic development
• Investing in education


  Interventionist policy for development, as the government is actively intervening in the market
• Building schools in remote areas


  Children move from working on the farms to being in school
• Children no longer able to help families on the farm

  Families produce less
• Decrease in production


  Decrease in incomes
• Decrease in incomes


  Decrease in consumption
• Decrease in consumption


  Decrease in aggregate demand
• Decrease in aggregate demand


  Decrease in real GDP and therefore limit economic growth

  
• Low standard of education


  Students will not acquire the knowledge or skills they need
• Low human capital


  No significant increase in worker productivity
• Lower productivity


  Shifts the long-run aggregate supply curve to the left
• Shift in LRAS to the left


  Decrease in real GDP and therefore decrease economic growth
• Lower productivity


  Workers' incomes will decrease
• Decrease in workers' incomes


  They will pay less income tax
• Less income tax revenue


  Government receives less revenue to spend on development
• Chain of reasoning


  1. Low human capital

  2. Low productivity

  3. Low incomes

  4. Less income tax revenue

  5. Less government spending on development

  6. Limits real GDP

  7. Limits economic development