Quality and relevance

Years ago I was travelling in a local train.  A coconut vendor sitting on the floor of the compartment was talking to others: “Everyday I bring and sell a few coconuts in the market and I earn enough for subsistence. I am quite happy, except that I have one big regret. I could not get myself an education. So, I can not follow what the educated, knowledgeable people talk about.”  I was so impressed with this man.  Here was a poor old man somehow making both ends meet. Yet, he had no complaints regarding his economic condition. All that he yearned for was some education and that too not for any financial gains. Such people are rare — rarer in today’s  increasingly materialistic world.  

Of course, nothing wrong if people want education to be employable. But a question  being asked in many countries is: what kind of education is needed for that purpose?
Since our education system is increasingly following the American model, it is instructive to look at the US experience. An average American student spends about $17,000 each year as tuition fee and those who finance education with bank loans graduate with an average loan of  $23,000.

 Imagine the plight of such a person if he fails to get a job which would give him enough earnings to cover his living costs and loan repayment. A large number of college graduates are being forced to take up jobs like bartenders or salesmen (which were traditionally reserved for school graduates or even dropouts) at wages which would be enough for survival but would not enable them to get out of the debt trap. At the same time, on average, a college graduate earns about 50 per cent more than a school graduate and a school graduate earns about 45 per cent more than a school dropout.
So, more education pays in the sense that if the person gets a job commensurate with his acquired skills, he would earn significantly more than a less educated.

The key lies in the quality and relevance of education. In the US, as in India, there are high class colleges along with lots of bad colleges. With the mushrooming of private engineering and management institutes in India, students who otherwise could not pursue higher education are now able to enroll in some technical college by paying much higher fees than those charged by government colleges. Student loans are also being offered generously by banks. With the economy growing at 8-9 per cent per year, many types of jobs are being created.

Diversity of earnings

The result is that most of the students from lower-tier technical colleges are eventually getting some jobs but at salaries at  a fraction of those earned by students passing out of  the first-tier institutes. Thus, we see enormous diversity of earnings among people with B. Tech or MBA degrees. In India, too, many students are finding it very difficult to pay back education loans with the meagre salary they are able to earn with degrees from low-rung institutes.

A vicious cycle is operating. Most of the students entering the low-tier colleges have low educational attainments from school levels. They are less prepared and often less motivated to learn. Attendance at classes is poor. The college authorities will certify the minimum percentage of attendance in any case to be allowed to sit for the university examination. The teachers feel little pressure to teach as students are not interested.

 They are primarily in the college for a diploma which they consider a matter of right in return for the lakhs of rupees they are paying as fees. The exams are lax, hardly anyone fails, grades are inflated. The employers know it — hence they have little faith in these grades and degrees. Basically, they treat these college as places from where they would pick up a few students on the basis of written tests and personal interviews at low salaries, without incurring the cost and trouble of calling up a large number of jobseekers at the company office for interviews. Since they know that in any case they will have to train these people extensively they would pay low salaries to cover their training costs.  

The government takes the easy, politically expedient road of reserving seats for an ever increasing circle of new classes/ castes in premier institutes, launching  new IITs and IIMs in almost all the states and even renaming existing colleges as IITs/IIMs. The acute shortage of quality faculty even in the established IITs/IIMs is the crucial bottleneck, which, spending money on physical infrastructure would not solve. More substandard IIT/IIMs are serving to destroy the brand that such institutes have built over the years. A devalued brand would make it more difficult to attract top quality faculty to these institutes.

The basic solution lies in improving the quality of school level education – particularly in rural areas – and  providing career counseling and vocational courses. Otherwise, substandard and irrelevant education will make a lot of  people more unemployable. The son of the doorman of our apartment building has passed BA exam with Bengali, Sanskrit and History as subjects from a college in rural Bengal. He is not willing to be a farmer or a doorman anymore nor is he like the coconut seller I met decades back. But what kind of job can such a graduate hope to get in today’s India?

(The writer is a former professor of economics at IIM, Calcutta)