Education, especially primary schooling for literacy, is a major goal of development. It is also a means for achieving the interrelated goals of health, higher labour productivity, more rapid GDP growth, and the broader goal of social integration, including participation in cultural and political affairs.

The proportion of illiterates among the adult population has steadily decreased, but the absolute number has grown. There is increasing concern about the functional quality of literacy in both developed and developing countries. A population with a high proportion of illiterates is poorly prepared to cope with modern technology. In addition to basic literacy and numeracy, schools should also teach some of the knowledge and methods essential for participation in a modern economy, including the agricultural sector. The more advanced levels of education are increasingly important to enable individuals and countries to understand and participate in the technological and administrative processes of the modern global economy. In practice most Governments have not given education top priority as a development objective. Some countries have made great efforts, however, and have reduced illiteracy very quickly. Great uncertainty prevails about the economic prospects of many specific investment projects, but the role of education and human capital formation in development stands out more clearly than ever.

The private rate of return on the investment cost of all levels of education is generally high, especially in developing countries, reflecting in part government subsidization of education. This has stimulated the demand for access to education. The social rate of return to education, although consistently lower than the corresponding private return, is generally no less than average rates of return on fixed capital investments. Using this criterion, developing countries underinvest in education.

But estimates of both private and social rates of return, the majority based on cross- section estimates of private earnings streams, have to be treated with caution. Earnings differences between people with different educational levels may be attributable to other individual characteristics, such as intelligence, determination, and social or political status, rather than or in addition to their level of education. On the other hand, such estimates may understate the external effects of education. Examples are the beneficial effects of educated people on the productivity of those around them or on the health of their families and the power of education to enrich people's lives.

Country studies carried out mostly in the 1970s and earlier suggest that the rate of return on primary education in the developing countries has been higher than the return to second-level and third- level education, at least in the past. A more recent analysis of two countries in Africa, however, suggests that as average education levels increase over time, the marginal rates of return to the different levels (i.e., the lifetime rates of return for new entrants into the labour force) tend to converge rapidly towards the narrower and lower range observed for the second and third levels in the developed countries. Two or three decades ago, workers with only a primary education were still quite scarce in many developing countries and were able to obtain a large share of the relatively high-paying jobs in the industrial and government sectors. Now, however, most of these jobs require replacement workers with a second-level or even a third-level education.

A related question is the relative value of completing all or just part of primary education. A case study of agriculture in three regions of Peru in the early 1980s found that the impact of a full six years of primary education varied greatly according to the region's level of development. After allowing for other factors, such as access to extension service, credit, and improved seeds, completion of six years increased the productivity of the farmers in the most advanced region by about one third. In the intermediate region, completion of at least four years implied "an increase of about 15 per cent in output as compared to farmers with less than four years of education," but completion of all six years did not show any greater effect than just four or five years. Completion of at least one year in the most traditional region was helpful, compared with having no schooling at all, but there was no further advantage from completing all six years.

The social return to expansion of primary education in agrarian societies depends largely on its effects on the productivity of peasant farmers. The evidence suggests that this in turn depends on whether farmers are operating in a traditional or a modernizing environment, i.e., one in which change is rapid. Education assists farmers to obtain and evaluate information about improved technology and new economic opportunities and thus to innovate. The level of education required depends on the levels of technology currently in use and potentially suitable. Education being complementary to other inputs, its value cannot be assessed in isolation. It depends on the degree of access to credit, extension services, new seeds, and other inputs. The greatest impact on rural development can thus be mde where education is part of a package of measures.

Inequities in the availability of education most commonly relate to poverty, location, gender, religious or ethnic identification, and physical or mental disability. Achievement of equity requires specific interventions and acceptance of the reality that compensatory resources and measures are necessary to offset the disadvantages of certain groups. Poor families may require assistance with the costs of school fees, uniforms, and transportation. Equity in rural areas may require flexible scheduling of the school year to minimize conflict with agricultural planting and harvesting.

Although low enrolment of girls often reflects the attitudes of their families and the wider community, schools themselves may reinforce such attitudes. Differences in teacher- pupil interactions and in pupils' use of materials and equipment can create inequities even within a single school or classroom. In some schools females receive less attention from the teacher and experience lower expectations in terms of their school performance. To promote participation and successful academic achievement by girls in communities which disapprove of co-educational classes, the educational system could provide separate schools for girls or even in-home instruction. Where older girls are commonly expected to stay at home to care for their younger siblings, other ways could be used to provide necessary day care.

With regard to youth and adult education programmes, there is a major issue of equity among people of different ages. There also is considerable inequity in the allocation of subsidies for higher education, as noted earlier. Given the low levels of education of much of the adult population, it is not realistic to expect every country to meet immediately even the basic knowledge requirements of all of its adults. Strong arguments exist for giving women highest priority, considering their history of being educationally underserved, their economic contributions to agriculture and industry, and their influential role as mothers and often as head of a single-parent household. Their opportunities should include access to training in non-traditional occupational roles for women, e.g., through agricultural extension services and assistance to small-scale enterprise development.