Thursday, March 27, 2014

The evaluation of the effectiveness of using education as a solution to reduce income inequality within Singapore

In Goldin’s (2009) lecture, he mentions several problems that will arise due to globalisation, one of which is that “globalisation is not inclusive” and many people are left out of the benefits of globalisation, resulting in income inequality. Income inequality is the difference in wealth between households. A large income gap indicates that there will be a large group of people who are living in poverty. This is undesirable as it would cause an unstable society. Statistics have shown that people in developed countries have more capability and knowledge to reap more benefits from globalisation than those in less developed countries. This is supported by Ogunsola (2005) who acknowledged that “the more developed countries reap the lion share of the benefits while the less developed bypass the benefits” of globalisation. However, income inequality can also exist within countries. This can be seen in the case of Singapore. Although Singapore is ranked one as one of the top countries for the highest GDP per capita, it has a significantly high gini coefficient of 0.463 as of 2013, indicating that large income inequality exists within Singapore.

To address the problem on large income inequality, the education of citizens is adopted by Singapore government as one of the strategies to reduce this problem. Education is also a globally recognised tool that can benefit and allow people to escape the poverty trap. For example UNESCO (2014) which recognises education as a solution to alleviate poverty came up with a mission called “Education for All” to promote education.

I feel that education is an effective tool that can help to reduce income inequality between households in Singapore in the long run. The importance of education to reduce income inequality can be seen easily by comparing the difference in the income level between different people with different education levels. Davie (2012) mentioned in her article in the Straits Times that starting salaries of diploma holders are estimated to be around $2000 while those of degree holders $3000. It can be said that people without these qualifications will not be able to reach salaries of those stated then. Qualification represents knowledge and capability in this society and individuals who are highly educated will be highly sought for by the knowledge based economy. This shows that as long as the poor are educated and have the required knowledge, they will be able to have the opportunity to leave the poverty trap and reduce the income inequality within Singapore.

In addition, Ji (2012) did an analysis on the education policies of countries including Japan and Korea which place a strong emphasis on equity in terms of opportunities for education. She mentioned that education policies focusing on ensuring availability of equal education for all might be a particularly useful way for countries to increase earning mobility between generations and reduce income inequality over time. Singapore, similar to Japan and Korea, also focuses on equity in education in terms of providing opportunities for all the individuals in Singapore. For example, all Singaporean are required to have compulsory primary education. To ensure that no families are denied of this opportunity, education for Singaporean students is subsidised for the needy families and every student is given a sum of money in their Edusave account annually. In addition, many different educational paths are available for the children after their primary school education to encourage the less academically inclined students to further their studies. For example, there are Normal Academic and Normal Technical streams to encourage the students that did not do well to continue with their studies after primary school. The Singapore’s education policy is directed in such a way that the newer generations have equal opportunities to obtain at least primary school education and the individuals are encouraged to study beyond the compulsory primary school education, this will create a future workforce that has a higher level of education. It is believed that having highly educated workforce, the income inequality in Singapore will be reduced gradually.

The limitation of using education as a tool is that it requires a long time for the effects to be observed. Income inequality can be reduced when the education level of the entire workforce increase as a whole. However this is a very long process. This can be supported by the statistics from the Ministry of Manpower in Singapore (2013) which revealed through a span of 10 years from 2003 to 2013, the percentage of workforce that attained tertiary education only increase by about 15%, suggesting that it requires a long time for Singapore to obtain a higher percentage of tertiary educated worker.

Currently, a phenomenon observed in the Singapore’s society is that as the Singapore’s workforce gets more opportunity for education, the income gap increases. Statistics from the Ministry of Manpower of Singapore (2013) revealed that 49.9% of the workforce obtained tertiary education in 2013 as compared to 34.6% in 2003. However, within this same period, the Singapore Department of Statistics (2013) indicated that the gini coefficient increases from 0.457 to 0.463. As the new generation of young individuals with higher qualification enters the work force and obtain relatively higher salary than the lesser educated, it can be expected that the income inequality is going to further increase. However, it is believed that income inequality is likely to be reduced if all the individuals in Singapore become more educated as a whole. However, this can only be achieved after many generations, which required a long time.

Another limitation lies within the education system in Singapore. Due to the limited vacancies for tertiary education, competition will always be present in Singapore’s education system, undoubtedly, individuals will continue being ranked according to their academic ability. This poses a difficulty for Singapore to obtain a workforce with majority of the individuals obtaining equal level of education and as a result difficult to achieve low level of income inequality. However, this may not be the case if the Ministry of Education in Singapore can provide more paths and opportunities for the less academically inclined group of people who may have talent in other aspects. By allowing them to pursue their area of interest, they will be able to unleash their potential and may do as well as their peers who are better at studies. With this idea in place, everyone can be given the opportunity to be successful, thus reducing the income inequality within Singapore.

Sir Francis Bacon once said “Knowledge is power”. Education and knowledge are now one of the crucial keys 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 have attained higher qualifications.



References
Davie, S. (2013, May 18). Is a degree really all-important?. The Straits Time. Retrieved March 25, 2014 from http://www.straitstimes.com/the-big-story/case-you-missed-it/story/degree-really-all-important-20130518
Department of Statistic Singapore. (2013). Key Household Income Trends, 2013. Retrieved March 25, 2014 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 March 25, 2014 from http://www.ted.com/talks/lang/en/ian_goldin_navigating_our_global_future.html
Ji, E. C. (2012, April 25). How can education help tackle rising income inequality?. Retrieved March 25, 2014 from http://oecdeducationtoday.blogspot.sg/2012/04/how-can-education-help-tackle-rising.html?m=1.

Ministry of Manpower Singapore. (2012). Singapore Workforce, 2012. Retrieved March 25, 2014 from http://www.mom.gov.sg/Publications/mrsd_singapore_workforce_2012.pdf

Ministry of Manpower Singapore. (2013). Labour Force in Singapore, 2013. Retrieved March 25, 2014 from http://stats.mom.gov.sg/iMAS_PdfLibrary/mrsd_2013LabourForce.pdf#page=21

Ogunsola, L. A. (2005). Information and Communication Technologies and the Effects of Globalization: Twenty-First Century "Digital Slavery" for Developing Countries--Myth or Reality?.  Retrieved from March 25, 2014, from Obafemi Awolowo University, http://southernlibrarianship.icaap.org/content/v06n01/ogunsola_l01.htm

UNESCO. (2014). Education for the 21st Century. Retrieved March 25, 2014 from http://en.unesco.org/themes/education-21st-century.

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