How effective is education as a solution to reduce income inequality within Singapore?

Goldin mentions several problems that will arise due to globalisation. One of which is that “globalisation is not inclusive” and many people are left out from the benefits of globalisation, resulting in income inequality. Income inequality is the difference in wealth within households. It is undesirable for a society as it causes poverty. Statistics have shown that developed countries have more capability and knowledge to reap more benefits from globalisation than the less developed countries. This is supported by Ogunsola (2005) who acknowledges that “the more developed countries taking the lion share of the benefits while the less developed bypass the benefits”. However, income inequality can also exist within countries. This can be seen in the case of Singapore. Although Singapore is ranked one of the top for the highest GDP per capita and has a very high GDP of USD274.7 billion in 2012, it has a very low gini coefficient of 0.463 in 2013, indicating that large income inequality exists within Singapore.

Education is one of the strategies that Singapore government has adopted to tackle income inequality. Education is also a globally recognised tool that can benefit people and allow people to leave the poverty trap. For example UNESCO which promotes “Education for All” also recognise education as a solution to alleviate poverty.

I feel that education is an effective tool that can help to reduce income inequality within Singapore in the long run. The importance of education on income can be seen easily by comparing the difference in the income level between different people with different education level. Statistics reveal that starting salaries of diploma holders are about $2000 while degree holders around $3000. Qualification represents knowledge and capability in this society. In the knowledge based economy today, it demands more for knowledgeable workers with higher qualifications and these workers are well paid too. Hence education have the ability to enable the poor to be out of the poverty trap and reduce the income inequality.

In addition, Ji (2012) did an analysis on the education of countries including Japan, Korea which places a strong focus on equity in opportunities. She mentions that education policies focusing on equity in education might be a particularly useful way for countries to increase earning mobility between generations and reduce income inequality over time. Singapore which is similar to Japan and Korea also focus on equity in education. For example, all Singaporean children are required to have compulsory primary education. To ensure that no families are denied of this opportunity, education for Singaporean students are subsidised for the needy families and every student is given a sum of money in their Edusave account annually. Having similar strategies as these countries, it is believed that the income inequality will be reduced gradually as the population progresses to a higher level of education as a whole.

The limitation of employing education as a tool is that it requires a long time for the effect to be observed. In Singapore society today, people with lower education levels hold a significant percentage as compared to those with higher education levels. As the new generation of young individuals with higher qualification enters the work force, we will observe further increase in the income inequality. This phenomenon is currently observed in the workforce today where the Gini coefficient dropped from 0.478 in 2012 to 0.463 in 2013. Income inequality is only likely to be reduced if individuals in Singapore become more educated, however, this can only be achieved after many generations.

Another limitation lies within the education system in Singapore. As competition will always be present in Singapore’s education system, undoubtedly, individuals will continue being ranked. Individuals who do well are often provided with a lot of opportunities and the less academically inclined however, are often left with limited choices. This group of people are stereotyped by the society as a weaker group of people and will proceed to take up manual jobs when they graduate. However, this may not be the case if they are given more opportunities to pursuit areas which they are interested in. The government, specifically Ministry of Education in Singapore, can cater more paths and opportunities for this group of people to allow them to pursuit their area of interest so as to unleash their potential, rather than limit their potential. With this, everyone can be given the opportunity to be successful and so, reducing the income inequality within Singapore.

Sir Francis Bacon once said “Knowledge is power”. Education and knowledge is now one of the crucial key to success and wealth in the Singapore society. I believe that education will be an effective tool to reduce income inequality in the long run when majority of the people has attained higher qualifications.

Referencing

Almas Heshmati. (2003). The Relationship Between Income Inequality and Globalisation.

Government of Singapore. Department of Statistic Singapore. (2013). Key Household Income Trends, 2013. Retreived from http://www.singstat.gov.sg/publications/publications_and_papers/household_income_and_expenditure/pp-s20.pdf.

Goldin, I. (2009, July). Navigating our global future [Video file].  Retrieved from 

http://www.ted.com/talks/lang/en/ian_goldin_navigating_our_global_future.html

Ji EunChung. (2012, April 25). Re: How can education help tackle rising income inequality?. Retrieved from http://oecdeducationtoday.blogspot.sg/2012/04/how-can-education-help-tackle-rising.html?m=1.

Sandra Davie. (2013). Is a degree really all-important?. The Straits Time. Retrieved from http://www.straitstimes.com/the-big-story/case-you-missed-it/story/degree-really-all-important-20130518

L. A. Ogunsola. (2005). Information and Communication Technologies and the Effects of Globalization: Twenty-First Century "Digital Slavery" for Developing Countries--Myth or Reality?  Retrieved from http://southernlibrarianship.icaap.org/content/v06n01/ogunsola_l01.htm

UNESCO. (2014). Education for the 21^st Century. Retrieved from http://en.unesco.org/themes/education-21st-century.

UUPaul R. Masson. (2001). Globalisation Facts and Figures. Retrieved from IMF Research Paper Data Base.