Cronología del clima medieval

Mankiw (2012: 399) defines human capital as “the accumulation of investments in people” of which the most important is education. Livingston (1997: 9) states that “the core thesis of human capital theory is that people’s learning capacities are comparable to other natural resources involved in the production process; when the resource is effectively exploited the results are profitable both for the enterprise and for society as a whole”. He notes that there are three schools of thought about what contributes to the development of human capital. These are: better and more schooling; life-long learning; and greater economic benefits for people who are more highly educated. Apparently, South African authorities agree with all three approaches to some extent (SAQA, 2008b: 26; DHET, 2012: 44; Lolwana, 2008: 3) as they strive to provide the skills needed by a fledgling democratic economy.

The problem is that in spite of a growing demand for education, the quality of education is not keeping pace. We see low throughput rates (National Planning Commission, 2011: 276; DHET, 2012: 47), a lack of available skills to meet the demands of the economy (DHET, 2011: 6) and under-qualified teaching and lecturing staff (ibid.: 8). The so-called “brain- drain” or flight of skilled professionals to developed countries has exacerbated the problem (Mattes & Mniki, 2007: 19).

3.8.1 Public and Private Benefits of Human Capital Development

In spite of the pressing problems mentioned in the previous paragraph, the discussion below reveals that both educated individuals and society as a whole benefit from HCD.

The private benefits for individuals include greater prospects of employment, and higher incomes, which in turn contribute to greater ability to save and invest for future needs such as education for children and retirement (Bloom, Canning & Chan, 2005: 16; OECD, 2009: 40). Education and skills enhance self-esteem, confidence, and positive attitudes, all of which have beneficial spinoffs. The fact that education has a positive effect on lifetime earnings and occupation helps to explain increases in the demand for higher education as well as

individual choice of occupation. In addition, tertiary education improves the ability of people to adapt to, and benefit from, fast-paced and ever-changing technological developments that epitomise the knowledge and information network economy. This is crucial if Africa is to achieve the economic growth required to tackle pervasive poverty and inequality (Aoki, et

al., 2002: 243; Bloom, et al. 2005: 16).

The OECD (2009: 42) states that a lack of education contributes to the growing unemployment rates. It follows, therefore, that the employment prospects are better for the educated people than for the uneducated (Mankiw, 2012: 399). In addition, the rate of employment increases as people’s levels of education rise. For example, graduates with a tertiary qualification are more likely to be employed than high school leavers. However, Bhorat (2004: 17) observed that there is an increasing graduate unemployment problem in South Africa, and noted that having a tertiary qualification no longer guarantees employment. When people are educated, they receive a rate of return on their investment that over time cancels out costs of that investment, such as tuition fees and loss of earnings while studying (OECD, 2009: 44; Heise & Meyer, 2004: 367). This provides an incentive for them to invest in education. The OECD study found that the individual rate of return to those with a post- school non-tertiary education ranged from 5% to 18%, while for a tertiary education, on average, across 19 OECD countries, the individual rate of return was between 11% and 12%. The public rate of return was between 6 and 11%, depending on whether education was undertaken in early adulthood or in later years of life (OECD, 2009: 44). Although they do not provide any percentages for rates of return, Gustaffson and Mabogoane (2010: 6) posit that the rate of return for South Africans sharply increases for people with a senior certificate because they are more likely to find employment than those without a senior certificate. The stark fact is that 60% of young South African adults have no qualification at all (Gustaffson & Mabogoane, 2010: 6), which contributes to the high unemployment rate9.

3.8.2 Societal Benefits of Human Capital Development

Societal benefits also result from the development of human capital (OECD, 2009: 46). According to Le Roux (2009: 2), “insufficient investment in an economy means sub-optimal economic growth, sub-optimal job creation and inferior overall living standards relative to nations with a better savings performance”. The benefits of public investment in education are higher when people complete tertiary rather than upper secondary education (Miller &       

Torr, 2003: 15; Creţan & Lacrois, 2008: 136). Because people generally earn more when they have higher levels of education, they provide the state with greater tax revenues, and there is a greater level of savings and investment, which leads to “a more entrepreneurial and civic society” (Borode, 2011: 149). Investment in education can also contribute to:

 a reduction in population growth, improvements in technology, and better governance (Bloom, et al., 2005: 16);

 reduction in crime rates (Lochner, 2010: 3);

 improvements in health and life expectancy (Lochner, 2010: 34; Heise & Meyer, 2004: 366; Bloom, et.al., 2005: 16);

 encouragement of democracy (Lochner, 2010: 61); and

 economic benefits for the employer (Lafleur & Bloom, 1999: 5; Dimov & Shepherd, 2003: 17).

A more educated population brings with it benefits that affect individuals, communities and society as a whole. However, where opportunities for education are limited, particularly in terms of provision, these benefits cannot be fully realised. The opportunity for people to gain an education is directly correlated with the number of providers. At the risk of being repetitive, it is clear that private providers make a significant and positive contribution to human capital development.