Ladder of skills – where is South Africa under-investing?

ladder-against-wallA South African ‘new deal’ capable of revitalizing hope could, as I explored in a recent piece, usefully comprise three inter-related prongs:  strengthen ladders of opportunity; pay with higher taxes; and embrace active citizenship to improve public services & renew social solidarity.   An implicit claim is that South Africa currently spends too little on some key rungs in the skills ladder. This piece identifies some of the spending shortfalls.

The figure below (prepared by Luis Crouch, co-author of a chapter in the upcoming volume The politics and governance of basic education in South Africa) contrasts trends in enrollments in pre-primary, primary, secondary and post-secondary education for South Africa and for a set of eleven middle-income comparator countries (including Brazil, Hungary, Mexico and Malaysia). As the figure shows, as of 2013, 78 percent of the  total population cohort of 3-24 year olds in the comparator countries was enrolled in some form of education – versus only 64 percent for the comparable cohort for South Africa. The South African shortfalls are two-fold.

The first shortfall is in support for early childhood development. It accounts for 8 percent of all enrollments in the age 3-24 cohort in the comparator countries – but only 3 percent in South Africa.  As Nobel-prize-winning economist James Heckman has detailed,   investment in effective early childhood development (ECD) initiatives is perhaps the single most beneficial development intervention. In common with many other policy areas, South Africa has in place admirable policies to support ECD. But implementation falls way short.

One especially appealing policy (on paper)  is the provision of a $1 per day per child subsidy for low-income children in ECD centres which meet infrastructural and teaching benchmarks. In practice, the reach of this policy is limited. As of 2017, only 2 million of  3.6 million poor children between the ages of 3 and 5  are enrolled in any ECD centre at all – and only 700,000 in centres which qualify for, and receive, the per child subsidy.

In recent research  conducted jointly with Lo Dagerman and Veleska Maphike, we  identified some major  weaknesses in the implementation of  ECD policy in the Western Cape (a province which generally is regarded as among the top  implementers of ECD policy). The Western Cape government underfunds the per child ECD subsidy policy.  Out of the total  200,000 or so poor children in the  2-5 age range in the province, only one third attend ECD centres which receive subsidies; another third attend unsubsidized centres;  the remaining third have no access to ECD learning centres. Perhaps not coincidentally given the revealed budget priorities, the research documented extraordinary  rigidities in bureaucratic responsiveness: Even for qualifying ECD centres, it takes years of intensive effort to access the subsidy.  Addressing these shortfalls (not only in the Western Cape, but in other provinces where implementation has lagged even further) will require major additional effort – both on the governance and (as per the ‘new deal’ argument) on the budgetary fronts.

Turning to the second shortfall, the difference is stark between South Africa and the comparators in the proportion of the age cohort enrolled in secondary education and beyond. In the comparator countries, 31% of the 3-24 year old cohort are enrolled in secondary education, and a further 11% in one or another form of post-secondary learning. The comparable figures for South Africa are 25% in secondary schooling, and an additional 4% in post-secondary.  Demographic differences surely account for part of the gap; South Africa has a different age pyramid from the other countries. But the gap also signals multiple, intertwined weaknesses in the South African system.

An obvious weakness,  highlighted by the ‘fees must fall’ movement, comprises gaps in both access to and financing of university education.  A further, related weakness is in the quality of secondary education (and in learning of foundational literacy and numeracy skills in earlier grades). As Nic Spaull and others have summarized, of 100 children who enroll in first grade;  about 55 end up writing and passing the school leaver (matric) exam; 13 reach the minimum standard needed to continue with university education;  only 6 (mostly from affluent families)  end up with a tertiary qualification.

Of course, all societies vary in the learning proficiency of their young adults – but  democratic South Africa’s   training and vocational education (TVET) is especially underdeveloped. Over the past few years, building on some pre-existing research (see for example here,  here and here)  I have explored South Africa’s TVET system with Nobayethi Dube,  Lucas Malambe,  Thomas Schmelzer, Elizabeth Walters and other graduate students at the University of Cape Town. Some of the  findings include:

  • In the immediate aftermath of apartheid, TVET was an ‘orphan’ subsector of education – overshadowed by the sense of urgency, and the powerful influence networks, associated with reforms of the basic education system and of universities.
  • Technical colleges (as distinct from the ‘universities of technology’, converted from apartheid-era ‘technikons’) comprised an especially stark gap. Their governance framework is obscure. Indeed, a quarter century after the dawn of democracy, it remains ambiguous as to whether their primary target group comprises high-school-age learners seeking a non-academic track, or post-secondary students, who passed matric, and seek to deepen their practical skills. (Often, these two distinct functions are combined in a single college, with predictably poor results.)
  • There is a large continuing disconnect between the educators in these college and private sector employers. The contrast is stark between systematic apprenticeship training for blue-collar (white) workers during the apartheid era, and the collapse of apprenticeships in the first decades of democracy. (There has though been some reversal recently, with state-owned enterprises in particular increasing their apprenticeship programmes.)
  • While an elaborate system of on-the-job training (serving workers of all ages), orchestrated around twenty-one Sectoral Training Authorities (SETAs), was put in place in the first decade of democracy, it has not worked well.  The system was well-funded  (via levies on employers), but failures in governance – rooted in part in the excessively complex design of the system – resulted in performance being poor in all but a few of the SETAs.

In sum, the most neglected rungs of  South Africa’s ladder of skills are early childhood development, and training and vocational education. In both areas there are, of course, major governance challenges – challenges which in my view would best be met by social partnerships with non-governmental organizations, and with the private sector. But gains in both also will require major additional public expenditure — and (as per the ‘new deal’ argument) concomitant increases in taxes.

Finally, a few words on spending for primary and secondary education. The standard argument is that, at the time of the transition to democracy,  spending was increased to appropriate levels (similar, as a percentage of Gross National Product,  to those of the comparator middle-income countries) – and that the binding constraints now concern management and governance of the system. Indeed, my own research (to be published by Oxford University Press in a September, 2018 book)  has focused in depth on the latter. However, a recent piece by Nic Spaull suggests that a relatively sanguine view vis–avis  fiscal adequacy may be wrong; Spaull shows that since 2010 the combination of a demographic bulge and increases in teachers’ salaries which are well above inflation has put pressure on resources for basic education. For the poorest 60 percent of the population, class sizes rose between 2011 and 2016 from 41 to 48 learners per class. Here, too, additional spending may be on the table.

As my ‘new deal’ piece argued,  relative to other middle-income countries – and contrary to the prevailing South African view – the country is not over-taxed.   Given credibility that money will be well-spent, there is significant ‘headroom’ to raise further revenue to cover the fiscal costs of the needs laid out above, as well as other gaps in the ladder of opportunity highlighted in the earlier piece.  At 28%,  South Africa’s public revenue as a percentage of national income is below that of many middle-and-high income countries.  Raising the share of taxes from 28% to, say 34% (the share in Brazil), would be a small price to pay for revitalizing hope – the sine qua non for a thriving future for all South Africans.




One response

  1. Pingback: South Africa’s challenge: Defusing the inequality-institutions time bomb « WORKING WITH THE GRAIN: Integrating governance and growth

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