Supply and demand for education

Demand refers to the quantity or amount of goods or services that an individual is able and
willing to buy at a given price over a particular period of time.
Demand for education refers to the amount of education that an individual or society is
willing and able to purchase at a particular price at a given time.
Supply refers to the quantity of goods or services a seller is willing and able to sell at a given
price over a particular period of time.
Supply of education refers to the amount of education that an individual in the society is
willing to sell or provide at a particular price and time.
Supply and demand curve

Factors influencing demand for education

Family disposable income-If a family doesnt have adequate financial resources to meet other
basic needs, the demand for education will be low. The higher the disposable income, the
higher the demand and vice versa.
Expected earnings on completion-The higher the expected benefits ( e.g. expected prestige,
wider employment prospects, self-esteem, job promotions), the higher the demand for
education.
Private cost of education- Where private costs are high, children from poor families seeking
education will be minimized. These includes direct and indirect costs which an individual or
family have to meet in the process of purchasing education at a particular time.
Cultural factors- May provide a discouraging or enabling environment e.g. cultural practices
that do not value girl child education.
Demographic factors- The lower the population the lower the demand for education and vice
versa. Other demographic characteristics such as age patterns, working age, old and
dependence, age distribution of boys and girls affect demand for education.
Government policy- established legal and policy structures that can increase demand for
education e.g. free primary education, free tuition day secondary education, HELB,
scholarships.
Family aspirations- Educated parents encourage their children to do better and are ready to
educate them.
Level of employment- The higher the chances of employment the higher the enrolment levels
and vice versa.
Factors affecting the supply for education
Price/cost of education-An increase in the cost/price leads to an increase in the supply of that
education.
Disposable income of the government-The higher the amount of resources to be set aside for
providing education and training opportunities, the higher the supply of education and vice
versa.
Level of technology-Technologies may precipitate the expansion of education opportunities
hence its supply.
Government policy-Favorable government policies may increase supply of education and
vice versa.
Prices/costs of other investments- e.g. considering schooling or buying a matatu.
Demographic characteristics and patterns-Supply of education is low in mobile communities.
High population dense areas will have high supply of education.
Education as a private and social investment
Education as a consumption and Investment
Education is viewed as a consumption in cases where we use it for immediate needs.
Education is an investment when it is demanded for what it is likely to give in the
future.
Non-economic benefits of education include improved social status, psychological
satisfaction.
Economic benefits include increased capacity to earn higher wages/salaries.
Hence education is both a consumption and investment item.

Private and social costs of education
Private Costs
Are expenses or costs incurred by an individual or family in the process of acquiring
education. They can be direct or indirect.
Direct costs are incurred directly by the individual to the institution e.g. tuition fees,
books, uniform, transport, pocket money etc.
Indirect costs are the foregone earnings or opportunity cost incurred i.e. what one
foregoes in enrolling for a program e.g. time spent in pursuing the program,
psychological and academic stress, family attachment. In short, if you are not
studying, what else would you be doing?
Social costs
Are expenses or costs incurred by the government on behalf of the society in payment
for education. Can be direct or indirect.
Direct Social Costs comprise resources devoted to education by way of bursaries,
scholarships, construction of schools, feeding programs, paying salaries to
teachers/staff, purchasing textbooks and equipment, training teachers, financing
curriculum research.
Indirect Social Costs- This is what the government foregoes in investing in education
e.g. settling squatters, health provision, agriculture. It also includes productivity
foregone i.e. what goods and services students would have produced had they not
gone to school.