The Economic Effect of Education in an Information Technology – Penetrating Economy: Evidence From Hong Kong
Author: Chi Wai Chan
Preface
This is a review of a journal article from Educational Researcher Journal – June/July 2010 issue entitled “The Economic Effects of Education in an Information Technology—Penetrating Economy: Evidence from Hong Kong” written by Chi Wai Chan. He is an assistant professor at the School of Education and Languages, Open University of Hong Kong. The review will cover the objective, question, methodology and conclusion of the research. The purpose of this review is to know the process or method of the study, its significance to readers, and to analyze if the researcher achieved an satisfactory answer to his questions.
The reason I selected this article is because of my interest in economics. Like education, economics has endless issues that we can study and most of these issues affect all of us, even if we are not aware that they do so. This article is a combination of economics, technology, and education which made it very interesting to review. I began my review by reading through the entire article. However, this article was quite complex and it required that I read through it thoroughly twice more. Because it is an article, some details are not discussed in depth by the author, and the focus is on the important relevant facts. I tried to find the origin of the first table to be able to understand more about the survey the Hong Kong government did, but I was unable to locate it. The same issue was discussed at the United Nation conference I attended in Bangkok entitled “Mega Trend in Human Capital and Labour Productivity towards Global Integration”, and this helped me a lot to understand issues about economics and education.
Objective
The objective of the study is to examine the economic effects in terms of earning, of IT diffusion, and its interaction with education in an economy with service production as the dominating economic activity. The researcher discussed the importance of studying the effects caused by IT diffusion and how to be able to determine solutions to overcome negative effects. He examines the impact of IT diffusion in the workplace of Hong Kong. Impacts such as technological changes in the workplace have made a significant impact on the individual worker. Managers are especially interested in how change affects a worker’s morale and performance. Some people react to change by seeing it as an opportunity for improved conditions, while others fear losing a workplace they operate comfortably in, especially low-skilled workers. This study can be a guide for economists and educators of Hong Kong to develop the educational system to effectively supply the human capital demand of the country. It reveals how high educated workers benefited, and how low educated workers were affected by IT diffusion.
Question
The study attempted to answer the question “What is the economic effect of education in an information technology-penetrating economy?” The question was focused on the general earnings impact of IT, and how it interacted with education for workers with various occupations. The observation is that managers, professionals, and clerks may be affected different. Most countries are following the advancement of technology, not only in the industry sector but also in education. With new innovations produced by researchers, technology is now more available and affordable to use. Most students have their own computers and are able to connect online anywhere using wireless connections. With these technologies, studying and searching for information is a lot easier than when I was studying my undergraduate degree. Most new graduates are skilled enough to work and operate new technologies, but how about workers who completed their studies before technology boomed? Are their skilled enough to work in the new industry? What is the economic effect of education in an economy now? These are the questions that the researcher wanted to answer.
Methodology
The Mincerian earning function approach was the first to derive an empirical formulation of earnings over a person’s lifecycle. This approach was adopted in the study to evaluate the effects of education, IT, and their interaction in determining the earnings of a worker. With the use of a formula, they determined the value of the general earning function for the study of wage.
The article is an empirical research based on data from the 2006 by-census of the Hong Kong population and the 2006 Annual Survey on Information Technology Usage and Penetration in the Business Sector. Hong Kong is one of the developing countries in Asia and also known as a world digital city (Hong Kong Yearbook, 2007). The study investigated the economic effect of education in terms of its impact on the earnings of workers in an information technology based on the data above. The author mentioned the different effects of Education and Technology on workers’ earnings. He used empirical tools in assessing the economic effects of education and training. Empirical means depending upon experience or observation alone without scientific method or theory.
The researcher used two sets of data survey conducted by the Census and Statistics Department of the Hong Kong SAR government every 10 years since 1961. From the survey the researcher determined demographic characteristics of the Hong Kong population. These included education, occupation and monthly income. The second table entitled: “Information Technology Penetration (ITP) Index” shows different industry sectors. These sectors are the independent variables and the ITP index is the dependent variables.
Conclusion
The researcher gained a good result by using the Mincerian earnings function approach to evaluate the effects of education, IT, and their interaction in determining the earnings of a worker. The result of his study revealed that IT diffusion benefits only the workers with high education attainment, and workers of low education attainment suffer from the increasing penetration of IT. The study also enriches existing understanding of the economic effect of education. Education has to serve as a supplement to the increasing diffusion of IT.
I therefore conclude that the study was successful and beneficial to the readers, most especially to the community of Hong Kong. I feel s a lecturer, it is important to be aware of issue in economics that are related to education. This kind of issue dictates development and improvement in education for the country.
