Introduction to part 3
This chapter presents an introduction to the handbook on development economics, Part 3. In most societies, a family or a household is the basic decision-making unit, although in some of the developed countries and even some developing countries in Latin America, the cohesion of the family seems to be weakening. Decisions made by the households in a society significantly influence the course of its economic and social development. For example, the fertility decisions of households determine the growth (or lack thereof) of a nation's population. Household consumption provides the demand for goods and services and household savings and investment influence the accumulation of physical capital and its allocation across sectors and areas. In the celebrated model of Malthus, fertility of a household was not an endogenous-decision variable but depended in a mechanical way on its consumption relative to its subsistence needs. In contrast, contemporary analyses of household behavior under the rubric of the new home economics start from the presumption that a household, which is concerned with the welfare of its members. In addition to the productivity-based view of schooling, there are two other common perspectives. One is the so-called signaling hypothesis in which the role of schooling is simply to signal to potential employers the innate ability of the individual who has acquired school credentials. The other perspective attributes to education a socializing role rather than productivity per se, the socializing essentially implying that educated individuals adhere to certain norms of conduct that might have positive implications for their productivity in work.
Year of publication: |
1988
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Authors: | Srinivasan, T.N. |
Published in: |
Handbook of development economics : volume 1. - Amsterdam : North-Holland, ISBN 0-444-70337-3. - 1988, p. 470-475
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