Do coaching institutes have scale economies?

I am doubtful of the scale economies of coaching firms. The success of a coaching firm depends on a few key instructors, and these advantages may decline if it is expanded with a large-scale recruitment of instructors or the use technology (or online modules). Yes, there is a possibility of scaling up to some extent but not beyond a limit. This is evident from the BYJU’s case also. By using a financial jargon, one can see that the growth of BYJU’s after getting a lot of capital was not organic. Hence it expanded by acquiring a set of relatively small-scale ventures. The reputation of such a venture may not go up (if not decline) when it becomes part of another company. 

Many technology firms have benefitted from what is called demand externality. We may use a park more frequently if our friends also use the same park. Social media platforms have this feature. A particular platform’s demand may go up when the number of people who use it goes up. There is a technical or objective reason that is behind the demand externality in such cases. Though any firm may have certain reputation benefits when its consumer base enlarges, such a technical or objective reason for demand externality may not exist in the case of a coaching firm. 

What may have happened in the case of BYJU’s? It was a successful coaching centre. There is an increasing demand for coaching in India. Many global investors have thought that this could be an opportunity to make money. Hence companies like BYJUs could attract a lot of capital. When venture investors put in a lot of money, the value of the firm has to increase continuously (even if it makes losses) so that those who want to withdraw can get away with their capital and handsome profits.

Hence there is an urgent need for the firm to grow (even if it is not making profits). Given the absence of substantial scale economies, one path of growth is inorganic – that is through the acquisition of other firms. I am not sure whether the real value of Akash Tutorial or such a company will go up just because it becomes a part of the BYJUs. The specific advantages of the former in the minds of consumers may disappear, if it also provides the same service as that of BYJU’s. There may not be a significant synergy. The real advantage is financial due to the increase in the value of the firm due to the increase in revenue (even if there is no profit). 

The other way to enhance the growth is to expand the consumer base. There were allegations of using unethical means to compel parents to subscribe to courses or to increase their payments. There were stories of excessive compulsions on employees to increase the number of paying consumers.

An open economy view of Kerala economy

Kerala is known for its achievements in basic education and healthcare for all. Its people participate in economic activities not only within the state but also nationally and globally. This participation generates income and it is used for consumption of goods and services. Some of these are non-tradable and hence these are produced within Kerala and contribute to state’s economic growth. Moreover certain attributes of the state (certain natural features) sustain activities like tourism which attract buyers from outside the state and this is another driver of its economy. However tax resources that are available to the state government is inadequate to meet its current public expenditure. Hence it is borrowing to meet even revenue expenditure and does not have enough money for infrastructure development. 

Basic educational and healthcare outcomes may sustain or improve even if the government is not able to spend significantly more money, since people may increase their private expenditure for these purposes. The status of healthcare in the state is not only due to public expenditure but also due to a higher competition between public and private players. (I am not saying that an increase in private expenditure is desirable). Regarding education, inadequate investments may not be the main constraint for further improvement in quality. If we take higher education, the not so good quality is more of an institutional or cultural or even a political issue.  

My sense is that the participation in economic activities may also continue more or less around the same pace even if the government is not able to increase its public expenditure. This participation and consequent income may generate demand for non-tradable services and it may continue to be a driver of the state’s economy. A similar pattern may prevail due to the consumption by outsiders (say through tourism). Hence I don’t see an immediate danger to Kerala economy. However there are other social, political and environmental challenges in addition to economic ones. 

The first lesson from Kerala’s economic growth is that we should not overestimate the role of the state in its economy (though it has played an important role in providing education and healthcare, and a not-so enabling role in terms of material production historically.) Politicians should not think that  they can bring in huge investments and accelerate Kerala’s economic growth further. There are structural constraints for certain activities like mass manufacturing; and a deviation from its current path of economic development may not happen that easily. For example, even if there is a development of local manufacturing, outsiders may have to come as workers. However this overestimation of politicians is leading to not so desirable outcomes.

Is fiscal surplus a good thing?

One can see frequent advertisements by the Government of Uttar Pradesh these days which claim, among other things, that it is a fiscally surplus state. I am not sure whether politicians and officials there understand the real implications of fiscal surplus. They may be influenced by an accounting mind-set (and not by an economic framework) and that may be encouraging them to see fiscal surplus as a virtue in all situations. 

Does Uttar Pradesh have enough school teachers? Does it have enough public healthcare centres? Do government hospitals in the state have enough doctors and facilities to provide medical treatment to its people, especially poorer ones? Is there adequate social security for its older people who have worked as agricultural and informal-sector workers? If the answer is no to these questions, then fiscal surplus is economically and morally unacceptable. 

The fiscal surplus of a state implies that the government can spend something more even without borrowing. More spending is desirable when there are socially useful avenues to spend public resources. Moreover, spending by the government even by borrowing money can be useful if it is carried out carefully. When people don’t have capabilities to participate in market economy productively, governments can borrow and spend money to enhance these capabilities. The participation of more capable people with higher productivity may help them to generate higher incomes. These people and their governments can depend on this higher income-stream in future to pay back loans. Hence borrowing by the government need not be intrinsically bad (if it is careful in spending the borrowed money). 

In fact, such borrowing is good for individuals too. If a family can take a loan and use for the higher education of children (and if children attempt to study well in colleges), it can enhance its socioeconomic status. Not borrowing money for education (due to the fear or personal or family norm) can be counter productive. I can see some people unwilling to borrow even if it can enhance their socioeconomic status, and that should be treated as a behavioural trait which is not good for development. Though one need not worry about such norms of a few people, such a `prudence’ on the part of governments can be socially harmful. 

However I am not surprised by the fact that Uttar Pradesh has fiscal surplus. Rather than seeing it as a virtue, it demonstrates that the democracy of the state does not create enough pressures on the government to spend money on important social priorities. When schools do not have enough teachers, when public healthcare centres do not have enough facilities and staff, and when poor people do not have enough money to survive during their old age, democracy usually compels political parties (irrespective of their ideological backgrounds) to meet these social needs. When governments are forced to spend money for these purposes, there will be an improvement in human development. 

It is through this process that human development has gone up in Kerala and Tamil Nadu. In both these states, intense competition in politics encouraged both parties/coalitions to spend more money (not only using what is available with the government but also by borrowing) on education, healthcare and social security. These may have crossed the borrowing limit that is recommended by norms of fiscal responsibility. 

It is the absence of this process that keeps the human development not so desirable in Gujarat though its government has a lot of public resources through the process of industrialisation. It is not surprising that the UP is following the Gujarat model. There are elements in UP politics that may not generate enough pressures from below on the government to spend money. 

There are residuals of elite capture in UP politics. Though middle-class, and middle- and lower-caste politicians are active in state politics, there are villages and constituencies where the local rich may have an undue influence in determining political and electoral agenda, and the poor and less affluent people may serve as vote banks. 

All sections of non-elites are not adequately empowered through political mobilisations. Dalits may not have an adequate voice when the BJP or SP governments are in power. Minorities may have challenges when the BJP is in power. Politics is also not that competitive. This is not only due to the dominance of one or other party at the state level. 

Truly competitive politics requires an ability for an ordinary voter to connect with different parties. If one party is not able to deliver what she expects, she should be in a position to credibly communicate to the other that it can expect her support if what she wants is delivered. This is not so possible when the politics is fragmented along caste and religious lines. A Dalit voter may not be able to connect with the party which represents the middle-caste. A minority voter may not be in a position to connect with the BJP based on its economic policies. All these reduce the pressures on government to spend money for public purposes. 

The focus on big-ticket infrastructure (and not on social security) through public-private partnership as a way to signal private investors or to show off visible symbols of development may encourage state-governments to have fiscal surplus. It becomes a signal to private investors in infrastructure that the government is in a financially sound position to pay back loans. 

The limited understanding of the functioning of economy among government officials can be a reason for this focus on surplus. They view the government as an organisation and are interested in balancing its revenues and expenditures. These revenues and expenditures are different from social costs and benefits. In an attempt to balance revenues and expenditures, they may neglect the maximisation of net social benefits or surplus or social welfare. 

Economic benefits and costs of `one nation; one election’

Whether the BJP government wants to move ahead in this direction or not, the slogan has excited a set of people (mostly followers). It is better to have a `neutral’ assessment of its benefits.  

There are two benefits which are talked about openly. The cost of political campaigns may come down, and this is good for political parties and the country. There will be frequent periods of `policy/project suspension’ if elections to local, state and central governments are conducted at different points of time. This problem can be minimised if there is only `one election’. In my view, these are the two most reasonable arguments for conducting elections to all tiers of governments in India simultaneously but let me analyse this towards the end of this essay. 

There may be a hidden agenda for the ruling party and hence a fear of opposition parties. This is based on the perception that a simultaneous election would favour the BJP. There are many ifs here. Despite the intense participation of Narendra Modi in the campaign for Karnataka state elections, he could not overcome the anti-incumbency of the BJP led state government. Kerala in general have a history of giving a higher share of seats to the Congress in Parliament even when the Left Democratic Front (LDF) comes to power in the state with a huge majority. It also has a tendency of giving a higher share of seats to the LDF in local government elections even when the Congress-led coalition gets the majority to rule the state government. Delhi elected the majority of BJP candidates for the parliament after giving AAP a thumping victory in state elections. In my view, the local issues and/or higher levels of education may encourage voters to differentiate different tiers of government and exercise their voting accordingly. 

Some would argue that poorer voters may be affected by the high-decibel campaign by one or other party. However there is another issue here. Many candidates (and parties) complain that contesting an election is very costly. A notable part of this cost is to `buy’ votes directly or indirectly. This is carried often at the level of candidates, and this cost is less likely to come down even if elections for different tiers of government are conducted simultaneously. Each candidate for each level may have to pay the money.  

I wish to make two points regarding this hidden agenda or fear. First, it may be less important than what politicians think; and secondly, this is a trend that will (should) disappear as part of socioeconomic transformation. People should be able to judge candidates and parties based on their appropriateness at each tier of government for each election and vote accordingly. 

Will the cost to public exchequer come down if elections to all tiers of government are conducted simultaneously? When election is conducted in one state, say West Bengal, it takes almost a month to complete the voting. Why can’t we do it in one day (which should be possible from the side of the voter)? This is due to the inadequate number of security personnel and the inadequacy of election machinery. Can’t we create a huge machinery and security establishment to conduct election on a single day? No, because it will be very costly and inefficient. Instead it is better to conduct elections (in one state for one tier of government) in 4/5 days probably within a month. 

Conducting elections to all tiers of government simultaneously requires a huge election machinery. This will be like creating a huge machine which is used only once in five years. Instead it is cost-effective if a smaller machine is created which can be used once in an year or two. 

Let us take the supposedly genuine benefits of conducting elections simultaneously, and that is to reduce the cost of political parties and the `policy/project suspension time’. Yes, these are benefits but only in the current context. Distributing money/kind to address poverty, investing in water-supply schemes and many such programs are implemented by all tiers of government and there is no rationale in terms of governance here. Instead, each tier should be carrying out those actions which it can do most effectively and efficiently. That is the principle of subsidiarity. However governance in India has become a lot more muddled with a lack of clarity on what each tier should do. I should say that this problem has aggravated with the arrival of Narendra Modi whose core expertise is that of a Chief Minister, and hence he thinks that his role as the PM should be to be the CM of all states of the country. State governments are unwilling to allocate those responsibilities to local governments which the latter can do well. 

If the governance in India is to become effective and efficient, the elected representative of each tier of government should be focusing on a specific set of issues and there will be very little commonality between different tiers. As an informed voter, I would be selecting that representative in the local government who can ensure that solid waste-collection is done properly, the one for state government who can ensure that government schools and hospitals function properly, and the Member of Parliament who can shape an appropriate monetary policy and international relations for the country. Though there can be same political parties contesting at these different tiers, campaign issues should be different. Narendra Modi’s or Rahul Gandhi’s presence in political campaign will not influence my choice of the MLA or corporation representative. If such a change happens (which should happen), there will not be much reduction in the cost of campaigning or there is no need to stop all projects while conducting election to each tier separately.

Rather than supporting `one nation; one election’, we should demand reforms in governance in India.

To be an employee or entrepreneur: Insights from microeconomics

Most of those who came to college during my generation were looking for a job, and that was necessary due to their financial situation. However the situation has changed. Many among this generation are work-shy or very choosy in terms of jobs, may continue higher education as a way to avoid taking up work immediately, or may quit if there are difficulties in work-environment. 

This work-shyness could be a general problem in this generation and not only in our campus. However Azim Premji University should have tried to address this problem through education given our specific social purpose but we have not been that successful in this regard. I will use a set of essays in my blog to take up the reasons for and ideas behind this work-shyness, with the hope that some students may read these and reflect on. 

One former student whom I met in the campus resigned before completing three months in the new job. (A significant share of those who attended the convocation resigned their job that they got through the campus placement). This boy’s response is given in the title. I am not presuming that he represents the majority of those who leave their, or are reluctant to take up, jobs. 

Entrepreneurship is to be appreciated but one should not get into it based on unrealistic or incorrect expectations. There is a need to be clear of fundamentals in this regard. 

In a job, one has to convince the supervisor (or the organisation) that he/she is a useful employee. There is an information asymmetry here since the organisation cannot judge a new employee’s readiness to do good work by merely looking at his/her degrees and through interviews. Hence what one does as an employee initially should communicate the person’s preparedness to the employer. This is not an easy task, and many new employees may start disliking the job due to the challenges in this regard. 

If convincing the supervisor is difficult, one has to convince multiple stakeholders while starting a business. We need to convince bankers or lenders that ours is a viable proposal. We have to convince potential clients/customers that our product or service is of good quality at a competitive price. We have to convince government regulators that we are following all rules. We may even have to convince vendors that we can pay the price of inputs without any default. There is information asymmetry in all these relationships. Those who find convincing employers difficult, may find it really troublesome to convince these multiple stake-holders. 

We should know the context where entrepreneurship is better than taking up a job. There are small shops every where in India. This is also a form of entrepreneurship. However those who run such shops may be happier if they can get a lower-level job in the government. This is due to the lower incomes from entrepreneurship. On the other hand, those who run a medium-size super market may not be interested in taking up a government job. What is the difference between a small shop and a super-market since both are in retailing? This is the amount of capital that is necessary to achieve an appropriate scale. First lesson is that a higher amount of capital is to be infused into the enterprise if the entrepreneur has to have a reasonable  income. 

There are many startups and some of these have become big companies over time. Amazon and Flipkart and all these have started as small firms. However when they started, they had a saleable idea/product in the form of a technology or software which is an embodiment of human capital. Then they could gradually attract more financial capital and build up large enterprises. Hence capital and/or saleable human capital are important to start viable enterprises. 

All kinds of human capital may not be appropriate for entrepreneurship. I have around 21 years of education and more than 30 years of work experience feeding into my job as a professor. However the only way to use this education and experience for entrepreneurship is to run a tuition or coaching centre. Hence a major part of my education and experience is useless for entrepreneurship. It is the education/experience which can generate an income from direct users that is valuable for entrepreneurship. 

We should note that entrepreneurship is not desirable in all contexts. Entrepreneurship is not lacking in India. About ninety percent of people in India work in informal sector and the majority are self-employed (including those un- or less-skilled workers who provide their service to those who seek it). They are entrepreneurs but the problem is that their income is inadequate. They or their next generation should become employees in bigger enterprises if there has to be economic development in India. When government schemes provide a small amount of money to less educated people (say, women) to become entrepreneurs, they have to struggle hard to earn meagre incomes. That is not a healthy transition. 

If we find the job difficult since it requires going to office at 8 AM, and working for 8-9 hours a day, and spending 5-6 days in a week, entrepreneurship will not suit us. It may require a much higher level of discipline, effort and commitment. The cost of loosing a job is probably unemployment for a few months, but that of a failed entrepreneurship can be very high. 

Dealing with troublesome supervisors: A view from microeconomics

A set of youngsters leave their jobs by citing problems with the supervisor. They reckon their supervisors as troublesome. What could be the extent of, and reasons behind, this problem? How can one handle this difficult situation? Here are some observations based on my own working life. 

This problem may start before taking up a job. We should take up the job only if we are really interested in it. We should have a realistic understanding of the nature of job and its requirements, and our readiness to meet these before accepting it. Instead if we take up the job half-heartedly or as a third- or fourth-best option, there is a higher chance that we may encounter difficult situations in the organisation (or with the supervisor who represents the organisation as far as an employee is concerned). This may have nothing to do with the nature of supervisor as a human being. 

Once we are in a job, we should be willing to meet its basic requirements in terms of meeting deadlines, completion of tasks, following formal rules, etc. There may be a tendency among many to seek favours of supervisors in this regard. Such favours or generosity are not sustainable. There may be a time when the supervisor may decide to follow the rules and then that can be seen as unfriendly or troublesome. 

Am I saying that there are no troublesome supervisors? Not at all. There are troublesome individuals in the population and there are some of these kind in workspaces too. But the share of such troublesome people in organisations is likely to be lesser than that in population at large. There is an objective reason behind this trend. Organisations have an interest to flourish (and if not, these may disappear or weaken over time). Hence there are incentives for organisations to control troublesome supervisors or to see that such people don’t achieve positions of power. 

Despite this incentive, one can see troublesome supervisors. Some troublesome people may succeed in convincing their usefulness to the management of organisations. If I take my personal experience, I have had the opportunity to work with about 10 people in my professional life. Out of them, 8 were normal people and dealing with them was not at all difficult. (There were very nice and gentle people among them who facilitated my work in different ways). But two were troublesome and I had great difficulty in dealing with them. 

One way to deal with troublesome supervisors is to get into a confrontation and long-drawn negotiation and its outcome could be based on the power structure or equations. This has happened in conventional trade-union contexts. But this can be costly.  As an individual, I am not equipped for such a dealing. Instead my tendency is to escape from the trouble. However this can have a negative impact on one’s career if one is not adequately prepared.

The preparation is that one should be good at work. (This takes us back to the first point. One should not take up a job if one cannot do well in it). If one is focussed adequately on the work, and can perform better than expectations, there will be two advantages in dealing with troublesome supervisors. 

First advantage is that other managers or leaders of the organisation may support an effective and efficient employee even if this person is not liked by the immediate (and troublesome) supervisor. This may enable the employee to continue with the job. However certain supervisors may be more powerful and hence others in the organisation may not be able to support an employee who is disliked by such a supervisor. 

That is when the second advantage comes in. If one is good at work, that person is more likely to have an equivalent or better exit option. If the troublesome supervisor makes one’s life difficult, then such options may come in handy even if there may be a few months of unemployment. 

This culture of doing one’s work well should be acquired in schools and colleges. However, there is an unfortunate tendency in campuses which glorifies the habit of getting away without doing hard work. Certain smartness is seen in shirking hard work and it is celebrated. This habit is harmful if it is carried on to the work environment. Not doing hard work can reduce the ability to deal with troublesome supervisors. That will narrow down acceptable outside options. 

In the initial days of Azim Premji University, a few junior colleagues complained to me about the working conditions here. My suggestion to them was to look for outside opportunities. This suggestion was not to encourage them to leave the organisation. But the best way to see whether we get a good deal in an organisation is to look at outside opportunities which are available to us. Such a view may help us to have a realistic understanding of our acceptance in the market (though we may have a much higher valuation of our own worth in the workspace).  This is also related to the monetary compensation that one can get in a job. I may think that I should be getting a lot more.  This subjective view can be harmful to oneself if the actual compensation is lesser than the expectation. The solution to this problem is to have an objective benchmark. What I can get elsewhere can be the basis of such a benchmark. (This is not an argument against public debates about wages in general or for specific jobs). 

We may not learn the ways to cope up with the challenges in work, even though work is an important part of our life. Neither from family nor from schools and universities. It is completely left to `learning by working’. Some people may suffer and fail while `learning by working’.

To go for higher levels of education or not? An economic view

This essay is aimed at those who complete successfully an undergraduate education of four years duration. Such an education is decent enough to get a good job in many parts of the world. Such a degree from reputed universities can help to go up to top positions in the government and private sector in the US. Civil servants in India need only an undergraduate education. 

However one can see many youngsters in India pursuing post-graduate education. This is a reflection of certain problems in Indian economy and society. There may be an under-supply of `desirable’ jobs in the economy. There can be an excess demand for (post) graduate education among sections of students in India. Those who write civil-service examination may pursue post-graduate education. This is also problematic since such an education is useful only to write the recruitment examination for a job which requires only an undergraduate education. 

There are benefits in taking up a job after completing an undergraduate education, even if one plans to go for postgraduate education in future. We may think that such jobs are not available in India. Though this may be true generally, many reputed colleges (including Azim Premji University) have campus placements which can offer a job to almost all those who are interested in one. 

Here are a few observations which may help students who complete undergraduate education and are thinking about whether to pursue post-graduation or take up work. Not only my experience as an academic but also my personal life and that of my daughter inform these observations. 

1. We need researchers and academics, and they need post-graduate and doctoral education. However the majority of them may benefit from an employment gap after undergraduate education. For those who complete undergraduate education in humanities and social sciences, taking up a job for 2-3 years will be very useful. This may give them an exposure to real world problems in economy and society, and that can add a lot more value to their graduate education/research if they want to pursue it. Otherwise they may become glorified research assistants to professors.
2. Such a gap is useful also to those who want to pursue post-graduate education in a discipline that is different from their major in undergraduate education. Many students may not develop a strong interest in a subject/discipline while pursuing undergraduate education. Or they may develop a genuine interest in a subject after this education. 
3. What about those who become passionate about an area of research in their discipline while doing/completing undergraduate education? If one student thinks that he/she is one such potential researcher, I have a suggestion. One should pursue research immediately after undergraduate education ONLY if that person is offered full-funding in a highly reputed university (say, within 500 in the global ranking). This is an indicator of what the world thinks about that student. There is little value in pursuing post-graduate education by paying money especially in arts and science subjects immediately after undergraduate education. 
4. If a student has relevant work experience and exposure to a real world issue (which can enrich the quality of the statement of purpose), then getting admission with full financial support to a post-graduate program in a reputed university may become relatively easier. 
5. If someone is interested in a career in private (or corporate) sector, the best option is to have an MBA. However, it is much better if this program is pursued after working for 3-5 years in private or social sector. This work experience may enhance the chances of getting admission in an internationally reputed university (sometimes with partial financial assistance), jobs and probably a higher salary. The last one is valid even for the students of IIMs where such work experience is not mandatory. (IIMs do not mandate work experience for certain problems in Indian society, and it is not a perfect situation). 
6. For those who are interested in social-sector jobs in NGOs and philanthropic sector, it is better to start working in the sector after undergraduate education. Fellowships for teaching in underserved areas or jobs in organisations like Azim Premji Foundation are ideal for this purpose. They can pursue a post-graduate education after acquiring a couple of years of experience. Though Azim Premji University is a good option within India, there are other national and international options too. The social sector or not-for-profit MBA from reputed institutes such as Said Business School (the University of Oxford) or such places are interesting opportunities. It is relatively easy to get financial assistantships for such programs and there is an increase in the recruitment of those who pass out of such programs by consulting companies including the Big Four.
7. I usually give the following advice to those students who don’t work but try to write civil service examination. They should write other examinations too (like those for lower-tier officers in the government) since the coaching for civil service exam may help them in this regard. If they are successful in any of these examinations, it can serve as a back up option; If they don’t, that is a signal of their lack of readiness for the civil service examination. It may be better if they take up some work along with preparations for the recruitment examination. Merely pursuing civil services can be very costly for the majority of students. They may not have a viable option after a few years. 
8. Many students in the developed world have opportunities to do one year fellowship or take up work after completing their undergraduate education. Such an opportunity may not be available to the majority of students in India. Hence students in universities such as ours which provide placement services should see work for 1-3 years as an important opportunity that is available to them. 

Work need not necessarily be a source of disutility

In popular discussions and academic literature, work is seen as a way to make money. We work to earn a living. In economics, it gives disutility but helps to generate income for consumption. Sociologists and Marxists focussed on alienation in work. These are important insights. 

However, in post-industrial societies or where higher education is acquired by a significant section of society and they engage in the provision of services (including management, research, creation of innovative products, those which provide information and entertainment, etc.), there is a possibility that the work can be a source of direct joy (in addition to its role as a source of income) for many people. There is not much deliberation on this role of work.  

My sense is that almost everybody who flourishes through work gets some joy directly (and not only incomes). Even those billionaires, who make a lot of money, may be spending a lot of time on work and that is driven not only by the intention to make more money. Almost all good teachers and academics get a lot of joy from their work. This can be true for good carpenters, electricians, nurses, or such professionals. 

It is the work which can give sustainable joy for a longer duration in one person’s life and not romance, sex, family or even travel. Though all these latter aspects are important, there will be frequent periods of dull and disinterest. We should contribute to family but not attempt to take too much joy from other members. Grown-up children should be left to pursue their own joy and should not be seen as a source of joy for parents.

There are people around us who enjoy their work. Rather than seeing this as an outcome of certain personality traits, this can be viewed as something that can be cultivated in society, especially among youngsters. However universities are not going a good job in this regard. Liberal education programs create a disinterest in work among youngsters through behavioural and ideological conditioning. 

To make work as a direct source of joy, we should have a deep interest in the work that we do. Youngsters may take time to develop such an interest but they should be seriously exploring what interests them. Everything that dissuades them from taking up jobs will work against getting joy from work. An aversion to discipline, a lack of focus, toxic relationships which discourage them from being serious in work, excessive emotional concerns of parents, and too much money and comfort at home which make them very choosy in terms of desirable work, a false sense of autonomy, strong ideological preferences on what is a good work, and all these can be harmful. Some of these may encourage them to pursue higher and higher levels of education, and this too may not help them much. 

There is a need to build capability or expertise from the scratch. Work may have an increasing rate of returns (both in terms of money and joy) which means that the returns could be significantly lesser for a beginner. This may discourage many youngsters from pursuing anything seriously. However that will affect the building up of expertise and the realisation of work as a direct source of joy. 

It is obvious that human beings have multiple sources of joy, and all these are important. However an appropriate allocation of time – the most important resource of people – is needed to see that work gives sustainable joy. People may allocate more time to certain activities and this may work against acquiring adequate capability to derive sustainable joy from work. Then such people may experience certain deprivation of joy over time.

A notion of marriage that is shaped by restrictive gender norms works against the participation of females in paid employment in India and this is disabling their empowerment. There is a need to change such gender norms. It looks that such a notion of marriage continues to discourage both men and women from focussing  enough on the quality of work and that may reduce its role as a source of direct joy. 

It is important to have certain openness to understand emerging trends and probable ways of expanding one’s scope of work. However such an openness is missing among many people and they are more likely to reach dead-ends in careers faster. Then they may have to continue to work without deriving much joy. 

Work may not give much joy if there is no intrinsic motivation. If people see themselves doing work merely for the income, they may not see the possibility of (and acquire the capability to get) joy from work. I have seen many people even in academics who don’t seek and hence derive joy from work. When money or power becomes the sole motivation for work for people, it is not only that they may miss the joy from work but may also deny such joy to others. They may not see that others can enjoy their work. 

However the fact that work can give joy directly should not encourage youngsters to be choosy in terms of work at the beginning. Taking up work is important. Even those who focus on money initially through work may have greater options to seek joy later on. Those who do not take up work may not have the joy (from work) and self-earned money, and that may limit their pursuit of joy through work in the long-run. 

We may hope that the world of organisations would evolve to make work happier to all people. That may not happen. Moreover the developments in technology may create newer challenges to work. However there will be work not only for the economy but for the welfare of individuals. It is important not only for money but as a source of direct happiness. Certain attitudinal and behavioural changes are needed to make most out of our work.

Economics of migration of Indian students for medical education

There are interesting aspects in the migration of Indian students for medical education. The majority of students who go from India for higher education in other countries (Canada, UK, USA, Australia, Europe, and so on) have the goal of getting jobs and living there. However such an aspiration is not strong among those who move to central Asia for medical education. Employment and migration opportunities in these countries are not that attractive to most Indians. (The salary of a medical doctor in Central Asia is not much higher than that of a school-teacher, and salaries in the region are in general not that higher than those in India). 

Hence the dominant goal of these students is to get medical eduction and come back to India. (Even if some may want to move to other countries, this trend may not be that different from those who get medical education in India). Hence the major concern is whether they can pass the foreign medical-graduate examination (or whether the government will do away with it and replace it by an examination for all students irrespective of whether the degree is from India or abroad). 

The attraction towards medical education in central Asia is based on two factors: First, there is a surplus demand in India. Even those who get a reasonable score in the NEET will not get admission in India; Secondly the cost of medical education in Central Asia is much less than that in private self-financing colleges in India. Both these together increase the number of medical students who study in Central Asia. There are emotional costs in staying far away from home and uncertainties regarding the outcome of education and these may be moderating the outflow of students despite the lesser cost of education there. 

Historical investments by governments in these countries when these were part of the Soviet Union led to the creation of public colleges for medical education. These colleges have basic facilities and a reasonable number of trained teachers. There is scope for enhancing the number of students, and this is a way to get additional revenues for these colleges which may not have enough resources currently. Hence these have an interest to attract students from India, and can afford to charge a fee which is a lot less than that in private self-financing colleges in India.

There is a public-private partnership here. These medical colleges get into agreements with private contractors to get students from other countries. These contractors have sub-agents who operate in different parts of India. They attract students who have qualified NEET and scored a minimum of 50 percent marks in higher secondary education and those who can afford to pay the fees. The main contractors also arrange/operate residence facilities for students in destinations. They are also trying to bring in additional medical teachers from India who can teach different courses in English. Many universities in the region see this as a way of resource mobilisation. The state university in Naryn – a small town up in the mountains that borders China and Kyrgyzstan – is making arrangements to get students from India. 

I am not taking a negative view of this exodus from India for medical education. The cost of medical education is prohibitively high in India. Entry barriers are unreasonable. My sense is that a lot more students have the proficiency to become medical doctors. India needs many more doctors especially those who are willing to serve in its rural areas. Medical education in Central Asia is not bad by considering the health-care achievements of these countries. If colleges there use the enrolment of Indian students to enhance their capacity utilisation and get an additional revenue, that is good for their functioning and sustainability. If this can help a set of Indian students to be doctors, that is broadly a win-win situation. 

There can be possible failures too. Some students may overestimate their ability to go through this education (and associated troubles). Some may not pass the qualifying examination to practice in India. There may be some private contractors or sub-agents who may not reveal all relevant information so as to attract more students. Then there could be emergency situations like what happened in China during COVID or in Ukraine due to the war. These may lead to severe losses for a set of students. 

The government of India does not (or cannot) have a major role. Its abilities to help students even during exigency situations are not that high. The only step that the government of India takes regarding the medical education abroad is to tighten the qualifying examination to practice within India. How tough such an examination should be is the moot question. Whether the motivation is to discourage the seeking of medical education abroad or the availability of enough qualified medical practitioners in India is the key concern. 

Financial Assistantships in Universities: Considerations of marginal social benefit

Universities use different principles to decide financial assistantships. The purpose of the university, the need to recover (a part of the) cost, the easiness of collecting information, and so on may determine policies in this regard. However there is an need for more rational deliberations on this aspect. 

Even philanthropic universities may want to recover a significant part of the cost. There may be concern about the financial sustainability of the organisation. Hence those who mange finances may argue for a higher share of costs to be recovered as student fees. 

However, the first step in this direction should be to see whether the costs are reasonable. In my view, if 7-8 faculty members teach 25-30 students in specific education programs, these are not reasonable. Hence there should be a rationalisation of the cost of education programs so that these don’t end up using too much faculty time. 

Then there is the need to decide fees and financial assistantship. A common approach is to offer need-based assistantship. Hence a student from weaker socioeconomic background may get a higher level of assistantship. Such an approach is easier and probably least controversial, even though there are challenges in getting accurate data on the socioeconomic background of students. 

There can be a sophistication in deciding the need for scholarship. For example, a girl who is a first generation learner from a marginalised group can get a higher level of assistantship than a boy or someone with literate parents or from a mainstream community even if all of them have similar financial difficulties. 

However my point is that this need-based assistantship is not adequate if we think about the purpose of universities. This is not unknown. A  reputed research university may offer financial assistantships to those who demonstrate a higher level of proficiency to be researchers. All these students need not come from poorer or socially marginalised groups. Another concern could be the private versus social gains from an education program. That is the reason why many reputed universities don’t offer (full) financial support for management education whereas that is offered in the case of certain other graduate or doctoral education. 

Let us think about such issues in the context of India. If a private university offers programs such as BA/BSc or MA/MSc in economics or physics or sociology or such subjects, the need for financial assistantship is not that high even for students who come from poorer socioeconomic backgrounds. Why? Those students who are from such backgrounds and who have the proficiency to get admission to such programs have many opportunities in government (or aided) colleges in India. The marginal social gain from educating a few more of these students in private universities with financial assistantship is low.

However, let us take a counter case. There is a good teacher in a school in a remote part of the country and she comes from a middle-class family. She teaches children from poorer and marginalised groups. She may benefit from a good quality post-graduation in education and skills and knowledge that she may get from this program are useful to the school education in this part of the country. Or her post-graduate education has a higher level of positive externality. Hence it is good for the society if she can get full financial assistantship even though her family background may not justify it. 

There is also a related point. If the cost of this post-graduate education has to be borne fully by her, she has little incentive to acquire it (despite its higher positive externality). She may not get higher salary or other monetary returns after this post-graduate education. Hence financial assistantship is needed to encourage her to acquire an education that is useful to the society. 

These two examples show that students’ socioeconomic background per se is inadequate to determine the need for and level of financial assistantship in a university. The purpose of the university, the marginal contribution of a education program in the domain of higher education, the additional social gain when a person gets educated in a specific program, and all these may have to be considered in the award of financial assistantships. 

I have used these two extreme examples but there can be many in-between situations which may warrant certain level of financial assistantship based on the socioeconomic background of students, additional benefit of educating a student and the social purpose of higher education.

The need for financial assistantship may change depending on the private versus public good nature of skills which are available through the program. If a new program on Artificial Intelligence is offered, then the need for scholarships to middle-class students is less since they can get well-paying jobs and this financial reward is adequate to motivate them. However if the program is on Climate Change, the skills are valuable as public goods and hence proficient students (even if they come from affluent backgrounds) may need financial assistantships to be motivated. 

The need for financial assistantships may change over a period of time. When a new program is offered, there may be a need for financial assistantships. However such a need for middle-class students may decline when many universities offer similar programs. However offering financial assistantships to all new programs can be problematic since university academics have a tendency to offer programs without looking at their relevance in labour markets or in social contexts. Hence there have to be other ways of judging the relevance of new programs. 

All these indicate that the criteria to determine financial assistantship in a university has to be multi-dimensional. However there may be a tendency to go by simple and uni-dimensional ones for the easiness of administration or to avoid conflicts. However such an approach may reduce the social usefulness of these financial assistantships.