ARSI UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS
Department of Economics (Regular, 3rd year)
Course: Development Economics II (Econ )
Individual Assignment
Name: Zeyad Milkeso Bedaso
[Link]: UGR/14425/15
Submitted to Mr. Eyob.M
May,2025
Asella, Ethiopia
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TABLE CONTENT'S
Page
Introductions.....................................................................................................................i
1 The Unemployment and Underemployment Problems.............................................1
1.1 Concepts and Definitions Of Unemployment AND ...........................................
Underemployment...................................................................................................1
1.2 The reasons why we be so concerns
with unemployment and underemployment........................................................................1
2 The extent of Traditional Economic theory Illuminate
the employment problems in LDCs.......................................................................2
2.1 Overview of how the traditional economic theory to
illuminates employments and their insights ......................................................2
2.2 Limitations of Traditional Economic Theo ry .........................................................3
3 The relationship between unemployment,
underemployment, Poverty and Inequality ........................................................4
3.1 Direct Impact on Poverty ...............................................................................4
3.2 Cycle of poverty ..................................................................................................4
3.3 Economic Inequality.......................................... ........,....................................4
3.4 Social Exclusion .............................................................................................5
3.5 Economic Growth and Development ..............................................................5
4 The Failure of Rapid industrial Growth in Less Developed Countries ........................6
4.1 POLICY MAKERS TO MITIGATE THE FAILURE OF RAPIDS INDUSTRIAL GROWTH
.........
5 The Formal and Informal Economic Sectors ...............................................................
5. 1 Distinction Between Formal and Informal Sectors .........................................................
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5.2 Features of Formal and informal sectors .............................................................
5.3 Positive aspects of the informal sectors in urban labor market.. .................................
5.4 Negative aspects of the informal sectors in urban labor markets...............................
6 The Distiniction between private and social benefits and costs of education............
6.1 Private Benefits and Costs of Education........................................................................
6.2 Social Benefits and Costs of Education .........................................................................
6.3 The Divergence Between Private and Social Benefit to cost Valuation......................
6.4 Should Government Attempt to Narrow the Gap?.......................................................
7 The relationship between education and Development .......................................................
7.1 Education and Economic growth................................................................................
7.2 Education, inequality and poverty ................................................................................
7.2.1 Specifically Example our country ,Ethiopia.................................................
7.3 Education and Migration..............................................................................................
7.4 Education and Fertility...................................................................................................
7.5 Education and Rural Development..............................................................................
8 Factors cause the international migration of high-level educated workers from
LDCs to developed countries........................................................................................
8.1 Meaning of Internal Brain Drain.....................................................................................
8.2 Factors Contributing to Internal Brain Drain .................................................................
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Introductions
Unemployment and underemployment are critical issues that can have profound effect on
individuals and society. There are many factors that why the are significantly concerns
unemployment and underemployment are constitutes as seriously for development problem.
This are some of the issues for concerns unemployment and underemployment, such as
Economic impact, inequality, skill degradation, impact on future generations,and Government
burdens.
Traditional economic theory provides a frameworks for understanding employment problems,
particular in developing countries like our country, Ethiopia. The relationship between
underemployment , unemployment and the problems of poverty and inequality is significantly
and abd multifaceted.
The urban economy classified in to two primary segments. This are formal sectors and informal
sectors. Distinguishing between private and social benefits and costs of education is essential
for understanding it's impacts on individuals and society as generally.
Education is widely recognized as key driver of economic growth. The relationship between
education and economic growth can be manifaceted through several mechanisms. The internal
brain drain refers to the phenomena where highly educated and individuals remain with their
home country, but do not utilize their skills effectively due to various factors, such as limited
job opportunities, corruption and Mismanagement, and lack of recognitions.
1 The Unemployment and Underemployment Problems
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Wh should we be so concerned with unemployment and underemployment? Why do they constitute a
serious development problem?
1.1 Concepts and Definitions Of Unemployment AND Underemployment .
The unemployment refers to those in the labour force without work but available and seeking
employment. Unemployment as a percentage of the labor force (employed plus unemployed)
Most countries distinguish people who work short hours from those who work full time ,especially
developed countries. This idea isn't well very know in developing countries especially Asia and African
continent.
To the unemployed , we must add the underemployed , those who are working less than they would
want to work. This visibility underemployment are workers who are compelled to work short time as a
choices to being out of a [Link] cause results from an inadequate use of workers
1.2 The reasons why we be so concerns with unemployment and underemploymen t.
Unemployment and underemployment are critically issues that could have heavy effects on personal
and community. This are many reasons why we are fundamental concerns and constitutes seriously
development problem.
a) Social impacts: unemployment could causes to rise poverty percentage, which in turn causes to low
health outcomes, increase crime rates and communities inequality .People who are unemployed might
experienced feeling of isolation, depression and a loss of self worth, which can has long-term effects on
brain health and community cohesion.
b) Economic Effects: increase unemployment rates could to mitigate consumer expenditure, which can
reduce economic growth (GDP).If people aren't employed they have a little money to expenditure on
good and services, which are consequences of spiral affects business and lead to even high job losses.
c) Inequality: unemployment and underemployment frequently disproportionately impact marginalized
groups, adding to women , youth and ethnic minority. This aggravates existing inequality and can causes
to tensions an conflicts (war).
d) Affects on future generations: High rates of unemployment can affects the next generations, as family
who are not able to search work may sacrifice to provide for their children, affects their education and
future work prospects.
e) Government Burden: High unemployment rates place a strain on Government resources, as more
money may be need to allocated to social infrastructure programs and unemployment benefits. This can
consequences to rise public debt and slowly down investment in other necessarily services.
So, because of the above impacts and affects on social, economically and [Link] are concerns
unemployment and underemployment and constitutes as seriously to development problem.
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Reducing and addressing unemployment and underemployment is crucial for promote sustainable
economic growth, social stability and overall development.
Effective policy that foster job creation and , skill development , inclusive and equality are essentials to
reduce these issues and problems.
2 The extent of Traditional Economic theory Illuminate the employment problems
in LDCs.
To what extent does traditional economic theory illuminate the employment problems of developing
countries? What are some of the limitations? be specific.
The traditional economic theory provides a framework for understanding employment problems, but it
has drawbacks, particularly in the context of developing countries.
2.1 Overview of how the traditional economic theory illuminates employments and
their insights
A. Supply and Demand pattern: The traditional economic theory emphasizes the role of supply and
demand in determining employment [Link] developing countries, higher population growth can lead to
a surplus labor supply, resulting in high unemployment and underemployment if there aren't enough
jobs to meet demand .
B. Labor Market Equilibrium: The theory suggests that labor markets will reach equilibrium where the
quantity demand equals the quantity of labor supply .in theory, if wages are flexible; they should adjust
to clear the markets. This can support explain why some developing countries experience high
unemployment during times of economic recession or downturns.
C. Human Capital: The theory of human capital asserts that investment in education and skills training
can enhancing productivity and employability. This perspective underscores the necessasity of education
in mitigate unemployment in third word( LDCs) where skill isn't fit are common.
D. Investment and Growth: Economic growth, promote by investment is seen as a key significant factor
for job creation. The theory postis that increased capital investment leads to higher productivity and
consequencetly, high employment opportunity. This highlights the importance of creating a conducive
environment for investment in developing countries economies.
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2.2 Limitations of Traditional Economic Theo ry
The traditional economic theory provides a framework for understanding employment problems, but it
has drawbacks, particularly in the context of developing countries. However, while it's limitations
explains are need for a more nuanced understanding of the complexities of labor markets in less
developed countries. The following are some of the limitations of the theory.
1 Informal labor Markets: Traditional economic theory frequently overlooks in developing countries ,
where employment is unrelated and not is not captured in officially statistics. This leads to an
incomplete understanding of employment dynamics and the challenges faced by informal workers.
2 Structural issues: Majority of developing countries face Structural problems such as inadequate
infrastructure, low governance, and corruption, which traditional theory doesn't adequately account for.
These Structural issues can hinder economic economic growth and job creation, lead to persistent
unemployment.
3 Cultural and Social factors: The models are also frequently ignore Cultural and social factors that
impacts employment. Factors such as gender roles , family responsibility and social norms can
significantly impact labor force participation and job availability, particularly for women and
marginalized community
4 Market Failures: TET( traditional economic theory) are assumes perfect markets competition and
efficiency markets which often not present in less developing countries (LDCs) .Markets failures such as
information asymmetry, can lead to suboptimal employment outcomes, as job seekers might lack of
access to information about job opportunity.
5 Globalization and External Factors: TET may not fully address the impacts of globalization on
Employment in less developing countries. Factors such as trades policies, foreign aid investment (FDI)
and global labor market patterns can significant influencing local employment situation.
3 The relationship between unemployment, underemployment ,Poverty and Inequality.
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What is the relationship, if any, between unemployment (and underemployment) and the
problems of poverty and inequality?
The relationship between unemployment and underemployment and the problems of poverty
and inequality is significant and multifaceted. Here are some key points that explains the
relationships between unemployment, underemployment and the problems of poverty and
inequality:
3.1 Direct Impact on Poverty
✓ Income Losses: unemployment leads to a loss's of income, making it difficult for individuals
and families to meet their basic needs such as food , shelter (house), and healthcare. This
direct impact can influence (push) families into poverty or exacerbate existing poverty levels.
✓ Unemployment Consequences: Unemployment, where individuals work fewer hours than
desired or in jobs that do not utilize their skills, can also lead to insufficient income ,
contributing to poverty.
3.2 Cycle of poverty
✓ Limited Opportunities:High unemployment and underemployment can create a cycle of
poverty, where individuals and families find it challenging to escape their economic situation.
Without stable employment, they may lack access to education, healthcare and other resources
that improve their circumstances.
✓ Generational Effects: Children from unemployed or underemployed households may
experience poor educational outcomes, limiting their future job prospects . This perpetuates
the cycle of poverty across generations.
3.3 Economic Inequality
✓ Wage Disparity: Unemployment and underemployment frequently disproportionately affect
low-wage workers and marginalized group, lead to increased income inequality. Those with
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stable employment typically earn significantly more than those who are unemployed and
underemployed.
✓ Access to Opportunities : Iequality in access to quality education, training programs, jobs
opportunities can exacerbate(increase) unemployment rates among disadvantage groups,
further widening the gap between the the wealth and the poor.
3.4 Social Exclusion
✓ Marginalization: Unemployment can lead tob social exclusion , where individuals feel
disconnected from society due to their inability to participate in the workforce. This can foster
feeling of hopelessness and resentment, which may contribute to social unrest.
✓ Impact on Community Cohesion: High unemployment rates can weaken community
cohesion, as individuals facing financial hardship may struggle to engage in social and
community activities, leading to isolation and further marginalization.
3.5 Economic Growth and Development
✓ Limited Economic Growth: High unemployment and underemployment can stifle economic
growth, as a significant portions of the popiis not contributing productively to the economy.
This can hinder overall development, making it more challenging to address poverty and
inequality effectively.
✓Investment in Human capital: When individuals are unemployed or underemployed, there is a
lack of investment in human capital development. This can lead to a less skille workforce,
perpetuating economic inequality and hindering growth, and etc.
In generally, there is a strong relationship between unemployment, underemployment and
the problems of poverty and inequality. Unemployment exacerbates poverty by limiting
income and opportunities, while also contributing to social exclusion and economic
disparities. Addressing these interconnected issues requires comprehensive policies that
promote job creation, skill development, and equality.
4 The Failure of Rapid industrial Growth in Less Developed Countries
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What are the principal economic reasons for the widespread failure of rapid LDC industrial
growth to generate equally rapid employment growth? Is such a large output -employment lag an
inevitable result of the process of modern industrial growth? Explain your answer.
The failure of rapid industrial growth in less developed countries to generate proportionate
employment growth can be attributed to several economic reasons; the following meantions ares
some the list why Industrial growth is fall in less developed countries.
✓ Capital -Intensive production: many less LDCs attract foreign direct investment (FDI) that
favors capital intensive industry. These industries often require significant investment in
machinery and technology rather than labor, thereby limiting job Creation while still increasing
output (GDP).
✓ Technically Advancement: As industries grow, they frequently adopt advanced technology
that automate processes. While this can lead to greater productivity , it often displaces workers
or reduce the number of worker needed, leading to a lag in employment growth growth
relative to output growth.
✓ Skill Mismatch: The rapid industrialization process often bridge in sectors that require
specific sets that the existing workforce may not possess. This skills mismatch means that even
when industries grow , there may not be enough qualified workers to fill new positions,
resulting in unemployment or underemployment.
✓ Structural Changes: industrial growth often leads to shifts from traditional sectors like
agriculture to modern sectors like manufacturing, which may not immediately absorb the
displaced labor. This transition can be slow, creating a temporary lag in jobs creations.
✓ Market Size Limitations:: LDCs may have limited domestic markets due to low purchase
power, which can constrain the scale of production and limit job creations. Even if industry
growth, the market demand may not support significant employment.
✓ Economic policies: Government policies that focus on attracting capital or incentivizing large
firms can sometimes neglect small and medium -size enterprises perpetuate a system where
wealth and growth are concentrated among a few large employers.
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4.1 POLICY MAKERS TO MITIGATE THE FAILURE OF RAPIDS INDUSTRIAL GROWTH
As for whether the large output-employment lag is an inevitable result of the process of
modern industrial growth, the answer is nuanced. While some degree of lag may be common due
to the factors mentioned above, it is not necessarily inevitable. Policymakers can mitigate these
effects by focusing on:
✓ Skill Development: Investing in education and vocational training to match workforce skills with
industry need.
✓ Support for SMEs: Developing policies that supports small and medium size enterprise, which
can create jobs and absorb labor.
✓ Diversified Economic Strategies: Encouraging a mix of industry that can provide an array of
job opportunities, including labor -intensive sectors .
✓ Inclusive Growth Policies: Implementing economic policies that aim for inclusive growth,
ensuring that the benefits of industrialization lead to wider employment opportunities.
Overall, While rapid industrial growth and a lag in employment can correlate, strategies
interventions can help bridge the gap and create a more balanced economic growth.
5 The Formal and Informal Economic Sectors
The informal sector is becoming an ever-larger part of the urban economy. Distinguish
between the urban formal and informal sectors, and discuss both the positive and negative
aspects of the informal urban labor market?
5
The urban economy categories in to two primary segments ,thebformal sectors and informal sectors
both are impacts on the urban labor markets. Understanding the difference between this sectors is
essential for comprehending their respective impacts on the urban market .
5. 1 Distinction Between Formal and Informal Sectors
The formal sectors is refers to the comprises businesses and workers that are registered, creates under
legal regulation and labor laws, and contributed to tax revenues. this includes corporation government
employees and many so characteristics it workers have access to legal protection, employment
right ,minimum wage. On the other hand , The informal sectors includs business and workers that
operate outside the formal regulatory framework. This could encompasses unregistered small business,
casual laboy, street vendors, and freelance or gig economy work.
5.2 Features of Formal and informal sectors
Formal Sectors: Workers have access legal protection ( employment right, minimum wage and social
security)
✓ Jobs are typically stable and offer benefits such as healthcare and retirement plans
✓ Business are recognized entities with obligation like taxes.
Informal sectors:
✓It is often unregulated and UN taxed .
✓ Workers have limited or no access to benefits or protection
✓ jobs may be less stable and often lack consistent pay.
5.3 Positive aspects of the informal sectors in urban labor market
✓Job creation: it have surplus labor and provide of employments it is opportunity for individuals who
might not qualify for formal jobs due to lack of skills of education or other reasons
✓Income generation: in the many developing urban, the informal sectors can be critical sources of
income
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✓Entrepreneurships and innovation: it can fosters entrepreneurships and innovation as individual
creates own jobs based on the local market demands and personal skills without facing any barriers of
formal regulation.
✓ Easy of entry: The formal sectors typically requires lower barriers to entry, allowing a larger number
of individuals to participate in economic activities without stringent regulations or qualifications.
5.4 Negative aspects of the informal sectors in urban labor markets
✓Lack of the protection: the workers of informal sectors usually lack basic skills labor rights, protection,
and benefits. by due to this unsafe working condition, and poor job security
✓Limited access of healthcare and social services :the informal sectors workers do not receives health
insurances, retirement benefits or unemployment support
✓Stigmatization and marginalization :the informal sectors worker can stigmatized as less legitimate,
leading to social marginalization and limiting workers engagement in broader economic opportunity.
✓Income Instability : jobs in the informal sector are often precarious, leading to inconsistent income
and making it difficult for workers to plan for the future or secure loans
✓Tax Evasion and Informality: The growth of the informal sector can result in reduced tax revenues for
governments, impacting public services and infrastructure.
6 The Distiniction between private and social benefits and costs of education.
What economic factors give rise to the wide divergence between private and social benefit-to-
cost valuations in most developing countries? Should governments attempt through their
educational and economic policies to narrow the gap between private and social valuations?
Explain.
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Distinguishing between private and social benefits and costs of education is essential for understanding
it's impact on individuals and society as a whole.
6.1 Private Benefits and Costs of Education :
private Benefits : private benefits refers to the direct advantages that an individual gain from receiving
education. These benefits are typically monetary and non-monetary
For instance: Higher earnings: individuals with higher level of education generally earn more than those
with less education.
✓ Employment Opportunities: Education increases the likelihood of securing a job and access better
employment opportunities.
✓ personal Development: Education can enhance skills, knowledge and personal growth leading to
improve quality of life
Private Cost: private costs are the expenses incurred by individuals or families in obtaining in education
Example: ✓Tuition fees: costs of enrolling in educational institutions
✓ Books and materials : Expenses for textbooks, supplies, and other learning materials.
✓ Opportunity Costs: The income foregone by students who could have been working instead
of attending school.
6.2 Social Benefits and Costs of Education
Social benefits are the broader advantages that society gains from an educated population
Example : ✓ Increased productivity: A more educated work force enhances overall productivity and
economic growth .
✓ Social Stability: Education contributes to social cohesion, civic engagement, reduced crime rates
✓Public Health: Higher education levels are associated with better health outcomes and reduced
healthcare costs.
Social Costs: Social costs encompass the overall expenses incurred by society in providing education.
Example .
✓Public Funding: Government expenditures on schools , university and educational programs.
✓ Infrastructure Development: investment in educational facilities, transportation and technology
6.3 The Divergence Between Private and Social Benefit to cost Valuation .
Divergence Between Private and Social Benefit-to-Cost Valuations
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Several economic factors contribute to the wide divergence between private and social benefit-to-cost
valuations in most developing countries:
✓ Underinvestment in Education: In many developing countries there is frequently insufficient public
investment in education. Ths leads to disparities in educationql quality and access, affecting the social
benefits derived from a more educated populace.
✓ Informal(imperfect) labor markets: In developing economies, a significant portion of the workforce is
engaged informal sectors where educational qualifications may not translate into higher earnings . This
limits the private benefits individuals perceives from investing in education
✓ Cultural and Social Norms: society attitudes toward education can differ, with some communities
valuing vocational training over formal higher education, leading to variàtions in perceived benefits.
✓ Inequality in Access: Access to qualify education is often unequal, with marginalized group facing
barriers that prevent them from reaping the full society benefits of education. This can result in
underutilization of human capital.
✓ Economic Conditions: in developing countries, economic instability and low wages can lead
individuals to undervalued the long-term benefits of education, focusing instead on immediate financial
returns
6.4 Should Government Attempt to Narrow the Gap?
Yes, government should takes steps to narrow the gap between private and social valuations of
education through various policies
✓ Increased public Investment: By investing more in education infrastructure, teacher training, increase
social benefits.
✓ Subsidiaries and Financial Assistance: providing scholarships , grants, and subsidiaries can reduce the
private cost of education for individuals, encouraging higher enrollment and retention rates
✓Curriculum Reforms: Aligning educational curricula with labor market demands can ensure that
graduate acquire skills that are valued by employers, enhancing the private benefits associated with
education
✓ Promoting Equity: Implementing policies that improve access to education for marginalized groups
can help maximize social benefits and ensure that all individuals have the opportunities to succeed
✓ Public Awareness Campaigns: Raising awareness about the long term benefits of education can
support perceptions and encourage more individuals to invest in in their education and etc.
The divergence between private and social benefit-to-cost valuations of education in developing
countries arises from various economic factors, including underinvestment, access inequalities,and labor
market dynamics. By addressing these issues through targeted educational and qeconomic policies,
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governments can enhance the overall benefits of education for both individuals and society,
contributing to sustainable development and improved social outcomes.
7 The relationship between education and Development
Describe and comment on each of the following education-development relationships
7.1 Education and Economic growth: does education promote growth? How?
Education is widely recognized as key driver of economic [Link] relationship between education
and economic growth can be articulate through several mechanisms:
✓ Increased Human capital: Education encourage the skills, knowledge and competencies of the
workforce, leading to increased productivity.A more educated workforce (labor force) is generally more
efficient, innovative, and capable of adapting to new technologies, which can bost overall economic
output.
✓ Attracting Investment: A well-educated labor force can attract foreign direct investment (FDI) this can
lead to Creation and further economic development.
✓ Innovation and Technological Advancement: Education fosters creativity and critical thinking, which
are increase essential for innovation. countries with higher education levels tends to have more
research and development activities, which leading to technological advancements that promote
economic growth.
✓Improved Health outcomes: Education is linked better health outcomes, which can reduce healthcare
cost and improve productivity. A healthier labor force is more capable contributing to economic
activities.
In addition to the above listed , Higher earnings and consumption, social cohesion and stability, are also
explain the relationship between education and economic growth and etc.
Overall, education promote economic growth by enhancing human capital, fostering innovation,
increasing productivity, contributing social stability. countries that invest in education are likely to
experience sustainable economic growth over time, this things are the main challenging and low level in
our country.
7.2 Education, inequality and poverty:
The impact of Educational system in LDCs(less developed countries ) ,Do educational systems in LDCs
reduce, Exacerbate or have no effect on inequality and poverty?
Educational system in many LDCs often tends to exacerbate inequality and poverty due to various
fackors , including quality , access and alignment with labor market needs.
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7.2.1 Specifically to see our country Ethiopia
✓ Access to Education: in our country, access to quality education is unevenly distributed , with rural
areas often facing significant challenges. Urban centers tend to have educational facilities. This disparity
limits opportunity for children in different rural areas and perpetuate cycles of poverty and inequality.
✓ Quality of education, Curriculum and Relevance: The quality of education in Ethiopia is variable, with
inconsistenties in curricula , teaching methods and facilities. The educational curriculum in our country
might is not match with needs of labor market. In addition to those issues like gender disparity ; with
girls facing additional barriers to education, such as cultural norms early marriage and safety concerns.
✓ Impact on poverty: The combination of unequal access, poor quality, and misaligned curricula
contribute to persistent poverty in our country. Individuals with limited education are frequently stuck
in low jobs , perpetuating a cycle of poverty that is difficult to escape.
7.3 Education and Migration:
Does Education stimulate rural-urban Migration? Why?
Education can stimulate rural-urban migration? Yes, it is for several reasons, the following are someof
the among the one factor's:
✓ skill acquisition: Higher education levels frequently lead to improve skills and qualifications. Educated
individuals are more likely to seek opportunity that alighn with their skills, frequently found in cities.
✓ Job opportunity: urban areas typical offer more diverse employment opportunities, particularly in
sectors that require high education. As people pursue education to improve their job prospects , the
may migrate to urban, where these jobs are concentrated .
✓ Infrastructure facilities and Social Network: Education system are often better developed in urban
areas , providing access to advanceed training and higher education institution, like higher education
and different industry. Education can also enhance social network. individuals with high levels of
education may have connections in urban areas , leading them to migrate to cities where they can
benefit economically and socially. All these are the main reason why people migrate to rural areas to
urban( cities).
7.4 Education and Fertility:
Does the education of women tend to reduce their fertility?
Absolutely, the educated women tends to reduce fertility rates for several reasons:
✓ Empowerment and Decision-making: higher level of education typical empower woman's to
participate more actively in household and societal decision making. She is also more likely to advocate
for smaller family size and are more aware of the implications of having large family.
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✓ Informed choice: Educated women generally have better access to information about reproductive
health and family planning methods, leading to more informed opportunity and how many children to
have.
✓ Career Aspirations: Education frequently leads women to pursue careers and professional
aspirations, they by delaying Early marriage and childbirth as they prioritize their personal and
professional development .
✓ Economic stability: Educated women is also more likely to achieve well (better) economic stability and
development, which often correlates with preferences for smaller families enabling them to invest more
resources in each child's upbringing rather than having a large number of children.
7.5 Education and Rural Development:
Do most LDCs formal Educational Systems contribute sustainable to the promotion of Rural
Development? Explain.
Formal education has contributed and contributing several important for rural development in
LDCs .The contribution of formal education systems in lees developed countries to rural development
can be complex:
✓ Access and Quality Disparities: Many LDCs experience Disparities in access to quality education,
particularly in rural areas where facilities maybe lacking. This can limits the effectiveness of Educational
Systems in promoting rural development.
✓ Human capital Development: When education systems are effective, they can contribute to
development of human capital. Educated individuals can bring innovative practice, improve agricultural
productivity and egage in community development initiatives , fostering rural development.
✓ policy and Investment: Effective rural development frequently ask supportive policies and Investment
in education, particularly in enhancing infrastructure, teacher training and curriculum development
tailored to local context.
8 Factors cause the international migration of high-level educated workers from
LDCs to developed countries
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✓ Education and the brain drain: What factors cause the international migration of high-level
educated workers from LDCs to developed countries? What do we mean by the internal brain
drain? Explain, giving examples.
8.1 Meaning of Internal Brain Drain
Internal brain drain refers to the phenomenon where highly educated and skilled individuals remain
within their home countries but do not utilize their skills effectively due to various factors. This can lead
to underemployment or employment in positions that do not match their qualifications.
8.2 Factors Contributing to Internal Brain Drain
There are some factors that contribute to internal brain drain, this are :
✓ Limited job opportunities: In severally less developed countries, there are insufficient job openings
that requires the skills and qualifications of highly educated workers, leading to them to accept lower
skilled jobs .
✓ Lack of Recognition: Skilled professionals may face challenges in having their qualifications recognized
or valued in their own countries, which can limit their career advancement
✓ poor Working Conditions: High level of bureaucracy, inadequate infrastructure, and Limited
resources in public institution can deter skilled workers from fully utilizing their expertise .
✓ Corruption and Mismanagement: corruption with organization can lead to inefficiencies and
disillusionment among skilled workers, prompting thenm to seek opportunities elsewhere, even if that
means staying within their country but in differ sectors or roles.
This are some examples of internal brain drain: Healthcare professionals, Educators, Engineers and
Technicians.
✓ Healthcare Professionals: In many LDCs , trained doctors and nurses may work in low paying
positions or face long hours with inadequate facilities. For instance, a doctor in our Ethiopia may Workin
rural clinic with limited resources instead of a more specialed role in urban healthcare facilities. Current
physician ( Doctors) demonstrations is the best implications.
✓ Educators: Teachers with advanced degrees may find themselves in poorly funded school that don't
provide the necessary resources or support for effective teaching. This can leads to dissatisfaction and
underutilization of their skills. This also the main issues and the implications for the low levels of
education in our country.
✓ Engineers and Technicians: Skilled engineers in countries like Nigeria may work in industries outdated
technology or face challenges in applying their skills effectively due to lack of investment in
infrastructure, leading to frustration and a senses of underemployment.
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3. Engineers and Technicians: Skilled engineers in countries like Nigeria may work in industries with
outdated technology or face challenges in applying their skills effectively due to lack of investment in
infrastructure, leading to frustration and a sense of underemployment.
Summary
The international migration of high-level educated workers from LDCs to developed countries
is driven by various factors, including better job opportunities, quality of life, and political stability.
Additionally, internal brain drain poses significant challenges for LDCs, as skilled individuals may remain
in their home countries but fail to utilize their potential due to systemic issues. Addressing these
challenges requires targeted policies that enhance job creation, improve working conditions, and
recognize and utilize the skills of educated individuals within their home countries
There is a strong relationship between unemployment, underemployment and the
problems of poverty and inequality. Unemployment exacerbates poverty by limiting
income and opportunities, while also contributing to social exclusion and economic
disparities. Addressing these interconnected issues requires comprehensive policies that
promote job creation, skill development, and equitable access to resources, ultimately
aiming to break the cycle of poverty and inequality.
14
Unemployment and underemployment are critical issues that can have profound
effect on individuals and society. There are many factors that why the are significantly concerns
unemployment and underemployment are constitutes as seriously for development problem.
This are some of the issues for concerns unemployment and underemployment, such as
Economic impact, inequality, skill degradation, impact on future generations,and Government
burdens.
Overall, education promote economic growth by enhancing human capital, fostering
innovation, increasing productivity, and contributing to social stability. Countries that are invest
in education are likely to experience sustained economic growth over time.
The divergence between private and social benefits to cost valuations of education in
developing countries arises from various factories, including underinvestment, access to
inequality and labor market dynamics. By addressing these issues through targeted educational
and economic policies, governments can enhance the overall benefits of education for both
individuals and society, contribute to sustainable development improved social outcomes.
Reference
1. E. Wayne NaFziger, Economic Development. 4 edition.
2. MICHAEL [Link], STEPHEN SMITH , Development Economics. 11 edition.
3. MICHAEL [Link], STEPHEN SMITH. Development Economics. 3 edition.
4. "Theories of Economic Development " by [Link].
5." Development as freedom" by Amarta .
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THANK YOU!
THE END.
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