WEEK THREE
TOPIC THREE : DEMAND AND SUPPLY OF EDUCATION
By the end of the topic, the learner should be able to:
Define the demand and supply of education
Explain the private and social factors influencing the demand for education
Discuss the factors influencing the supply for education
DEMAND
Definitions
It is the amount of goods and services that an individual is willing and able to purchase at a
particular price at a given period of time.
Demand applied to education refers to the amount of education that an individual or a society is
willing and able to purchase at a particular price at a given time. i.e. to what level of education.
FACTORS INFLUENCING THE DEMAND FOR EDUCATION /
DETERMINANTS OF THE DEMAND FOR EDUCATION
Private factors
Private cost for education
These costs include both the tangible (direct) and intangible (indirect) which the individual in his or
her family have to meet in the process of purchasing education at particular time. In this regard
where private costs are high, chances of children from poor families seeking education will be
minimized i.e. the higher the cost the lower the demand for education and vice versa.
Family disposable income
The amount of financial resources within the family that can be set aside for meeting the cost of
education will greatly influence the private demand for education. If the family doesn’t have
sufficient financial resources, to meet other basic necessities or needs, the demand for education in
such a family will be low. i.e. the higher the disposable income, the higher the demand and vice versa
other factors held constant. If there is no money for basic necessities education is not considered
because there is no money to dispose.
Expected earnings on completion / Expected benefits
Individuals and parents are likely to invest in education if the future expected benefits would be
higher than the present. The higher the expected benefits the higher the demand for education and
vice versa. i.e. expected prestige, wider employment prospects, self esteem, job promotions, etc.
Cultural inhibitions
The cultural factors may provide either discouraging or enabling environment for education. E.g.
some cultural norms, practices and attitudes tend to be detrimental to the girl child. E.g. in Samburu,
Maasai and Pokot, women education is not valued. They are told to marry off or repeat. Thus there
is low demand for education.
Family aspirations
Educated parents encourage their children to do better and are ready to educate them. There is
also the need to go to certain political class, improved social status etc.
Level of educated unemployment
The tendency of individuals demanding to pursue particular education programmes or courses is
likely to be influenced by the rate at which graduates of the same course get to be absorbed in to
the labour market thus the demand for a course which has many employed educated people will
be low and vice versa. E.g. medicine, law etc will have high demand. The higher the chances of
employment the higher the enrollment levels and vice versa.
Social factors
Demographic influence
The rate of population growth and demographic characteristics to a greater extent determine the
level of demand to education. In this regard, the lower the population the lower the demand for
education and vice versa other factors held constant. Demographic characteristics include age
patterns, working age, old and dependence, school going population, age distribution of boys and
girls i.e. more working people are able to take care of the young. It also includes social economic
status i.e. affluent population, poor, etc. since to the affluent population there is high demand for
education and vice versa for the poor.
Economic development
To equip individuals with knowledge, skills and attitude that will promote and foster economic
growth and development i.e. to establish a more efficient and productive labour force to enhance
economic advancement. Individuals gain specialized skills and attitude to make them more
productive.
Strategy to improve the standards of life
This is done to better and increase income levels, more job opportunities, exploitation and
utilization of scarce available resources in order to increase food provision in terms of quality and
quantity, reduction of poverty, improved social justice and security, equitable allocation and
distribution of scarce resources to enhance development e.g. Free Primary Education (FPE).
Government policy
This may include both established legal and policy structures to guide the provision of education e.g.
The introduction of free primary education in 2003 increased the demand for primary education i.e.
1.3 million children went back to school, Free Secondary Education (FSE) policy has also increased
the demand for secondary education, establishment of HELB to provide loans, bursaries,
scholarship to needy and deserving students has also increased the demand for higher education and
make secondary students to work harder. This has created a high demand for education.
To precipitate political information
Educated people will have issues of democracy, participate in elections, improve issues of
transparency, human rights, etc.
Innovation research technological issues, cultural interactions are promoted. Research generates
more advancement.
SUPPLY
Definitions
It refers to quantity of goods and services that an individual is willing and able to supply at a
particular price at a given period of time.
Supply applied to education may refer to the amount of education that an individual in the society is
willing to sell or provide at a particular price and time. E.g. provision of education and training
institutions that an individual’s, public, religious communities are willing to provide at a particular
cost and time.
FACTORS INFLUENCING THE SUPPLY OF EDUCATION /DETERMINANTS OF
SUPPLY OF EDUCATION
The price/cost of education
An increase in the cost of education leads to an increase in the supply of that education. Supplier
looks for profits that motivates them but at a social level the lower the cost of education the higher
the supply. E.g. free primary education.
The benefits the government and society gets from investing in education.
E.g. social economics benefits, political benefits, etc, motivates society to provide learning
institutions to get benefits accrued to education.
Disposable income of the government
The amount of resources to be set aside for providing education and training opportunities. So the
higher the disposable income the higher the supply of education and vice versa
Level of technology
Modern technologies and innovations may precipitate the government to open up educational
centres that can offer knowledge and skills demanded by these technologies. E.g. Kenya Agricultural
Research Institute which is expanded; thus the higher levels of technology the higher the demand
for education in the respective areas.
Government policy
It includes levels of structures on the establishment of learning institution e.g. some requirements to
open schools or universities to be registered to award degree or diploma. When the government is
positive, increases the supply of education and when they hinder they reduce the levels of supply.
Demographic characteristics and pattern
In Mobile communities like Maasai, the supply of education opportunities are low. i.e. nomadic
characteristics. It is so hard to establish learning institutions compared to those fixed people. Where
people are economically stable the government is likely to establish schools because parents are able
to meet the cost. If the demand is high the supply is also higher unlike poor economic ground areas.
High population density areas are likely to have more schools which are needed as compared to
sparsely populated areas which have low. Culturally some communities don’t need schools for
example where female children do not go to school
Political influence
Particular political systems may be interested in providing a lot of educational opportunities, e.g.
NARC – National Alliance of Rainbow Coalition. Some particular geographical zones may have
more educational opportunities e.g. more schools were established during Kenyatta era. Due to
Harambee spirit more schools were established. President Moi also started Schools and Universities
e.g. Moi University.
Prices of related goods and services and other investments
Private level and individual consider the cost benefit analysis e.g. schooling or buying a matatu.
Purchasing education is expensive and that’s why private individuals start schools.
The level of private and social demand for education
This precipitates individuals and publics to provide more learning institutions for education and
training. E.g. there is high social demand for education in Kampala where other universities are
affiliated to Kenyan universities, more academies, etc.
Cost of the factors of production
If cost of employing teachers, buying land, installation of infrastructure and equipment is high, few
investors are likely to enter the market, thereby reducing the supply of education.
How do we ensure that supply and demand for education are at equilibrium?
SUMMARY
What you have learnt
Private and social costs of education
Private and social benefits /returns to education
Factors influencing the demand for education
Factors influencing the supply of education
Measures to returns of education
Questions
How do we ensure that supply and demand for education are at equilibrium?
Identify policies that will ensure 100% enrolment of girls in schools.
Give possible reasons why government is concerned with investing in heavily in primary
level education as compared to university education;
Explain how geographical factors would influence the supply and demand for education.
Analyze the reasons that motivated you to joining KEMU for a degree course rather than
buying plots at Kitengela.
Determine the costs and benefits of your degree programme and give your opinion.