Higher Education in Nepal

Policies and Perspectives

Krishna Bista, Shyam Sharma, Rosalind Latiner Raby

• Publisher: Routledge
• Year: 2019
• ISBN:
  9781351139182
• Edition: 1
• Topic: Bildung
• Subtopic: Hochschulausbildung

This book presents a showcase of discussions and critical perspectives about Nepalese higher education. Its chapters cover topics such as the impacts of local sociopolitical changes and global forces on public and private education, emerging online and distance education, administrative and intellectual leadership, quality assessment, graduate employability, global mobility of students, and the contributions of global diaspora of Nepalese scholars.

The central questions of the book are: What are some of the local and global academic interactions in Nepalese higher education and what are the current challenges and pathways for advancements and improvements? How can Nepalese higher education absorb twenty-first century values of quality education as external forces, while adapting new developments to local needs? How can scholars interested in Nepalese, South Asian, and international higher education create opportunities for scholarship and professional collaboration around research on higher education in this region of South Asia? What issues and perspectives can research and scholarship about Nepal's higher education offer to international discourse in higher education?

The book offers information and resources to international educators interested in the dynamics of Nepalese and, by implication, South Asian higher education by introducing key challenges in policy and programs, innovative changes in curricula, effective approaches in technology application, and strategies for future integration of global reforms in education.

Section II

Socioeconomic contexts and issues

2 Higher education and economic development in Nepal

Amrit Thapa and Ujjwala Maharjan

Abstract

A plethora of existing literature indicates that human capital has a positive association with the economic development of a country. This chapter investigates the role of higher education in the context of the economic development in Nepal. The Nepalese education system has evolved through different phases in the past few decades that have been rife with political changes. Given the increasing focus on the importance of higher education, this chapter explores its connection to the country’s economic development. The chapter also points out the mismatches, issues, challenges as well as opportunities relating to higher education and economic development of Nepal.

Introduction

Empirical research from around the world provides evidence that education helps raise people out of poverty, improves quality of life, helps maintain better health, and makes one competent for employment (Patrinos & Psacharopoulos, 2010; UNESCO, 2016). The literature on returns to education also indicates positive private and social rates of return in many countries (Patrinos & Psacharopoulos, 2010) and predicts an overall positive effect of educational investment on economic growth.

Higher education, specifically, has been given increasing importance for its role in enhancing economic prosperity at both individual and national levels. Though data from many countries show that the returns are highest at the primary level, the returns to higher education are also considerably high (Patrinos & Psacharopoulos, 2010). Barro (2013) shows that the average years of school attainment at the secondary and higher levels for males aged 25 and over has a positive and significant effect on the subsequent rate of economic growth. Higher education facilitates producing a skilled workforce and also helps the related occupations that support innovative work and create the economic and technical infrastructure on which innovation is based (Levy & Murnane, 2004). Moreover, only higher education can meet the increasing need for workers with high-level skills as pointed out by occupational forecasts, analyses of job content, wage trends, and the changing nature of international competition (Bailey, 2005).

This chapter attempts to bring to light some discussions on this topic in the context of Nepal. It is our hope that, in doing so, it will spark ideas, insights, discussions, and inspirations for empirical research related to the role of higher education in the economic development of the country. It is also important to note that the intention of this chapter is not to portray economic prosperity as the one and the only aim of higher education. The chapter’s objective, rather, is to focus on the economic aspect of higher education and to explore that relationship in Nepal. In this vein, although we acknowledge and are aware of post-development approaches that have different views on development (e.g., see Escobar, 1995; Ferguson, 2009), our discussion will mainly revolve around the human capital theory of education described in the following section.

Education and economic growth

This chapter draws on the theoretical foundations of human capital theory (Schultz, 1961). It states that a society can increase its national output or an individual can increase his or her income by investing in either physical capital (e.g., plants and equipment) or human capital (e.g., education and health). In the early 1960s and 1970s, Becker (1964) and Mincer (1970) formalized and modelled the concept of investment in human capital. Becker (1964) put forward the idea of the formation of human capital as the sacrifice of resources today for the sake of a stream of benefits in the future. Mincer (1970) built on this concept and formulated an equation (the Mincerian equation) where education and experience were used as the key variables in explaining the income differentials among individuals. In the 1990s, economists discovered that, in addition to human capital, technological change was one of the key contributors to the economic growth of nations (Romer, 1990).

There are three mechanisms through which education may affect economic growth (Hanushek &Wobmann, 2010). The first relates to the human capital. As seen in the augmented neoclassical growth theory (Mankiw, Romer, & Weil, 1992), education can increase the human capital inherent in the labor force, which increases labor productivity and thus transitional growth toward a higher equilibrium level of output. Second, as seen in endogenous growth models (Romer, 1990), education can increase the economy’s innovative capacity, and the knowledge of new technologies, products, and processes that promote growth. Third, education can facilitate the diffusion and transmission of knowledge needed to understand and process new information and to successfully implement new technologies devised by others, which again promote economic growth (Benhabib & Spiegel, 1994).

Despite these theoretical explanations, the empirical evidence on the education’s impact on economic growth has been mixed, mostly due to measurement issues. For example, literature suggests that most studies ignore factors such as families, peers, health, nutrition, and other value-based characteristics in such estimations (Hanushek & Wobmann, 2010). Another issue could be related to reverse causality – countries with high growth could be bringing more educational development (e.g., Bils & Klenow, 2000). There might also be other interacting factors with education in studies of economic growth, such as the institutional framework of the economy, its openness to international trade, and the security of property rights (Acemouglu, Johnson, & Robinson et al., 2001; Pritchett, 2001, 2006).

Literature review

Many of early studies on schooling quantity and economic growth that consisted of cross-country growth regressions tended to find a significant positive association between quantitative measures of schooling and economic growth (Krueger & Lindhahl, 2001; Woessmann, 2003). However, one of the major limitations of these studies was the over-reliance on quantitative measures of schooling. This was heavily criticized by scholars in the field and hence the focus shifted to “quality of education”. Subsequent studies reaffirmed that quality of education was more important than mere quantity of schooling (Barro, 2013; Woessmann, 2003; Jamison, Jamison, & Hanushek, 2007), and that without improving school quality, developing countries will find it difficult to improve their long-run economic performance (Hanushek, 2013). Although the foundation of an education system relies on the elementary and secondary school systems, growth in productivity increasingly depends on the reach and quality of higher education (Bailey, 2005). Many empirical studies suggest that, as a whole, the economy benefits from more post-secondary education.

The evidence on the relationship between education and economic growth in the case of developing countries, particularly for South Asian countries, is limited. Mallick, Das, & Pradhan, 2016) investigate the dynamics of expenditure on education and economic growth in 14 Asian countries and show a positive and statistically significant impact of educational expenditure on economic development in all of the 14 countries. Likewise, Vinod and Kaushik’s (2007) study provides evidence that human capital has a statistically significant impact on economic growth. However, Hawkes and Ugur’s (2012) review of the empirical estimates suggest that there is uncertainty in the policy arena as to the most effective type of education or skills within the developing countries context. In a similar vein, studies relating to linkages of poverty with education and economic growth with data on Pakistan indicate that both the short-run and long-run effect of physical capital on economic growth have been found to be positive and significant, whereas education affects economic growth positively and significantly only in the long-run (Afzal, Malik, Begum, Sarwar, & Fatima, 2012). On the other hand, some studies (for e.g., Chaudhary, Iqbal, & Gillani, 2009) find only unidirectional causality running from economic growth to higher education.

In Nepal’s context, there are very limited studies on this topic. For instance, Dahal (2010) examines the linkage between higher education and real gross domestic product (GDP) of Nepal. The study employs time series data on enrolment in higher education and teachers working in the lower secondary and secondary schools, and GDP of Nepal spanning the period 1975–2009. The study finds that real GDP contributes to the enrolment in higher education. However, in another study, Nowak and Dahal (2016) investigated the long-run relationship between education and economic growth in Nepal between 1995 and 2013 and their results indicate reverse causality – that secondary and higher education contributes significantly to the real GDP per capita in Nepal.

To the extent that education helps in overcoming poverty, a World Bank report (2001) on education in Nepal reveals that the level of education of a household head is strongly associated with that household’s chances of falling below the poverty line. According to the study, the incidence of poverty decreases to 34% for those households whose heads have completed primary education. Further, completion of s...

Table of contents

• Cover
• Half Title
• Series
• Title
• Copyright
• Contents
• Acknowledgments
• Notes on contributors
• Section I Introduction
• Section II Socioeconomic contexts and issues
• Section III Globalization and global issues
• Section IV Important trends and changes
• Section V Disciplinary and social perspectives
• Section VI Paths forward
• Section VII Conclusion
• Index