ECS3707 Assignment 5
(COMPLETE ANSWERS)
Semester 2 2025 - DUE 8
October 2025;
USER
[Email address]
,ECS3707 Assignment 5 (COMPLETE ANSWERS) Semester 2 2025 - DUE 8
October 2025;
.. Scenario: Human capital (knowledge, skills, and good health) empowers
people to achieve their potential and drives economic growth. South Africa
faces a dual challenge; high inequality in both education and healthcare
systems, and persistently slow productivity growth and income inequality. In
2019, South Africa’s DALY (Disability-Adjusted Life Year) loss was equivalent
to 41% of GDP, revealing deep inefficiencies in the health sector (Senkubuge
et al., 2021). Moreover, non-communicable diseases (NCDs) account for over
30% of disability-adjusted life years in South Africa. (Koch, 2024).
Additionally, South Africa's population is growing at a rate of around 1,5% to
2% annually, in contrast the GDP grew by 0,6% in 2024 compared with 2023
(Stats SA, 2025). In essence, the disparity between economic growth and
population growth creates significant challenges for South Africa, hindering
its ability to improve the well-being of its citizens. South Africa's healthcare
system faces numerous challenges, including inadequate access, particularly
in rural areas, and a significant burden of disease. These issues are
compounded by systemic problems like poor governance, inadequate
infrastructure, and a shortage of skilled healthcare professionals, particularly
in the public sector. The coexistence of a strong private healthcare sector
alongside a struggling public system creates further disparities in access and
quality of care (World Bank, 2023) . For instance, the Human Capital Index
(HCI) which is a framework for understanding how a nation's people can
contribute to its future economic prosperity. It is a measurement developed
by the World Bank to assess the potential of a country's human capital
(World Bank, 2018). It quantifies the expected productivity of a child born
today, considering health and education factors, by the time they reach 18.
The HCI is a valuable tool for governments and societies to understand how
investments in human capital can boost a nation's economic and social
development . The Utilization-adjusted Human Capital Index (U-HCI) scales
down the HCI by considering how many adults are not employed. The U-HCI
for South Africa is 0,18. Thus, children born today will be 18% as productive
in adulthood as they could have been if they had access to full health and
education, and they became fully employed adults. The U-HCI for girls is
even lower at 0,17 (World Bank, 2020). Thus, children born today will be 18%
as productive in adulthood as they could have been if they had access to full
health and education, and they became fully employed adults. In essence,
South Africa's Human Capital Index underscores the urgent need for targeted
interventions to improve health and education outcomes, ultimately
unlocking the country's full human potential. Four out of 100 children die
before the age of five ; and an average of 32% of 15-year-olds will not
survive until age 60. In addition, 27% of children below the age of five are
stunted and so are at risk of cognitive and physical limitations that can last a
lifetime.
, These indicators are much worse than in many countries at the similar
income level. Furthermore, the learning gap in South Africa is large. A child
who starts school at four years old can expect to complete 9,3 years of
schooling by their 18th birthday (the expected years of schooling should be
13). Public spending on education is high, accounting for 6,1% of gross
domestic product (GDP) in 2017; similarly, about 8% of GDP is invested in
health, and about 5% of GDP is spent on social assistance, including various
youth employment initiatives (World Bank, 2023). Many countries spend less
but achieve much higher HCI, signalling that South Africa needs to take a
hard look at efficiency 5 and efficacy of its spending. It could achieve much
more without significantly increasing spending (Dulvy, et al., 2024). South
Africa’s, economic growth has indeed lagged population growth in recent
years, leading to challenges in improving living standards and creating
sufficient opportunities for the population. This means the economy isn't
expanding fast enough to absorb new job seekers or provide a significant
increase in per capita income (World Bank, 2023). Simultaneously, despite
significant public spending on health and education, the outcomes are not
commensurate with the investment, suggesting inefficiencies and a need for
better resource allocation. Because the economy isn't growing as quickly as
the population, per capita income (income per person) has been stagnant or
even declining.
This means that on average, people are not seeing significant increases in
their wealth or access to resources. In South Africa, a slower economic
growth rate compared to population growth creates significant challenges for
social security and healthcare. This disparity puts strain on public resources,
potentially leading to increased poverty, inequality, and reduced access to
essential services like healthcare. QUESTIONS 1.1 Contextualise the
development economic challenge South Africa is facing. Summarise the dual
challenges facing South Africa; poor healthcare/education outcomes and
slow economic growth; and explain how they are interconnected. 15 1.2
Apply economic development theory: Use Human Capital Theory,
Endogenous Growth Theory, and Structural Change Theory to explain the
relationship between investment in people and long-term economic growth.
20 1.3 Analyse empirical evidence: Use the provided data (e.g., DALYs, HCI,
U-HCI, inhibiting, education outcomes, GDP vs. population growth) to
evaluate South Africa’s performance and identify inefficiencies. 20 1.4
Assess policy inefficacies: Investigate why South Africa, despite high public
spending on education and healthcare, is underperforming.
Discuss issues like governance, equity, infrastructure, and access. 20 1.5
Suggest five targeted policy reforms that could enhance human capital
productivity and align social investment with growth. Consider early
childhood investment, healthcare system reforms, and education system
restructuring. (Make recommendations) 15 1.6 Reflect on the broader
(COMPLETE ANSWERS)
Semester 2 2025 - DUE 8
October 2025;
USER
[Email address]
,ECS3707 Assignment 5 (COMPLETE ANSWERS) Semester 2 2025 - DUE 8
October 2025;
.. Scenario: Human capital (knowledge, skills, and good health) empowers
people to achieve their potential and drives economic growth. South Africa
faces a dual challenge; high inequality in both education and healthcare
systems, and persistently slow productivity growth and income inequality. In
2019, South Africa’s DALY (Disability-Adjusted Life Year) loss was equivalent
to 41% of GDP, revealing deep inefficiencies in the health sector (Senkubuge
et al., 2021). Moreover, non-communicable diseases (NCDs) account for over
30% of disability-adjusted life years in South Africa. (Koch, 2024).
Additionally, South Africa's population is growing at a rate of around 1,5% to
2% annually, in contrast the GDP grew by 0,6% in 2024 compared with 2023
(Stats SA, 2025). In essence, the disparity between economic growth and
population growth creates significant challenges for South Africa, hindering
its ability to improve the well-being of its citizens. South Africa's healthcare
system faces numerous challenges, including inadequate access, particularly
in rural areas, and a significant burden of disease. These issues are
compounded by systemic problems like poor governance, inadequate
infrastructure, and a shortage of skilled healthcare professionals, particularly
in the public sector. The coexistence of a strong private healthcare sector
alongside a struggling public system creates further disparities in access and
quality of care (World Bank, 2023) . For instance, the Human Capital Index
(HCI) which is a framework for understanding how a nation's people can
contribute to its future economic prosperity. It is a measurement developed
by the World Bank to assess the potential of a country's human capital
(World Bank, 2018). It quantifies the expected productivity of a child born
today, considering health and education factors, by the time they reach 18.
The HCI is a valuable tool for governments and societies to understand how
investments in human capital can boost a nation's economic and social
development . The Utilization-adjusted Human Capital Index (U-HCI) scales
down the HCI by considering how many adults are not employed. The U-HCI
for South Africa is 0,18. Thus, children born today will be 18% as productive
in adulthood as they could have been if they had access to full health and
education, and they became fully employed adults. The U-HCI for girls is
even lower at 0,17 (World Bank, 2020). Thus, children born today will be 18%
as productive in adulthood as they could have been if they had access to full
health and education, and they became fully employed adults. In essence,
South Africa's Human Capital Index underscores the urgent need for targeted
interventions to improve health and education outcomes, ultimately
unlocking the country's full human potential. Four out of 100 children die
before the age of five ; and an average of 32% of 15-year-olds will not
survive until age 60. In addition, 27% of children below the age of five are
stunted and so are at risk of cognitive and physical limitations that can last a
lifetime.
, These indicators are much worse than in many countries at the similar
income level. Furthermore, the learning gap in South Africa is large. A child
who starts school at four years old can expect to complete 9,3 years of
schooling by their 18th birthday (the expected years of schooling should be
13). Public spending on education is high, accounting for 6,1% of gross
domestic product (GDP) in 2017; similarly, about 8% of GDP is invested in
health, and about 5% of GDP is spent on social assistance, including various
youth employment initiatives (World Bank, 2023). Many countries spend less
but achieve much higher HCI, signalling that South Africa needs to take a
hard look at efficiency 5 and efficacy of its spending. It could achieve much
more without significantly increasing spending (Dulvy, et al., 2024). South
Africa’s, economic growth has indeed lagged population growth in recent
years, leading to challenges in improving living standards and creating
sufficient opportunities for the population. This means the economy isn't
expanding fast enough to absorb new job seekers or provide a significant
increase in per capita income (World Bank, 2023). Simultaneously, despite
significant public spending on health and education, the outcomes are not
commensurate with the investment, suggesting inefficiencies and a need for
better resource allocation. Because the economy isn't growing as quickly as
the population, per capita income (income per person) has been stagnant or
even declining.
This means that on average, people are not seeing significant increases in
their wealth or access to resources. In South Africa, a slower economic
growth rate compared to population growth creates significant challenges for
social security and healthcare. This disparity puts strain on public resources,
potentially leading to increased poverty, inequality, and reduced access to
essential services like healthcare. QUESTIONS 1.1 Contextualise the
development economic challenge South Africa is facing. Summarise the dual
challenges facing South Africa; poor healthcare/education outcomes and
slow economic growth; and explain how they are interconnected. 15 1.2
Apply economic development theory: Use Human Capital Theory,
Endogenous Growth Theory, and Structural Change Theory to explain the
relationship between investment in people and long-term economic growth.
20 1.3 Analyse empirical evidence: Use the provided data (e.g., DALYs, HCI,
U-HCI, inhibiting, education outcomes, GDP vs. population growth) to
evaluate South Africa’s performance and identify inefficiencies. 20 1.4
Assess policy inefficacies: Investigate why South Africa, despite high public
spending on education and healthcare, is underperforming.
Discuss issues like governance, equity, infrastructure, and access. 20 1.5
Suggest five targeted policy reforms that could enhance human capital
productivity and align social investment with growth. Consider early
childhood investment, healthcare system reforms, and education system
restructuring. (Make recommendations) 15 1.6 Reflect on the broader
