Group Members:
Katie Lam (12)
Jenny Leung (20)
Introduction:
Primary schools which are not able to recruit the minimum of 23 students by
September would be forced to shut down within three years. The Secretary for
Education that among the 128 primary schools in Hong Kong, 160 classes would be reduced
by September. The authority estimated that it could minimize a total expenditure of 10 million.
1. Demand and Supply
Due to the decrease in birth rate and a decrease in Chinese immigrants studying in
Hong Kong, the number of primary one entrants kept falling in the recent years.
According to another news cutting of Ming Po dated 26/2/04, the number of primary
one entrants decreased from about 58500 in the previous term to approximately 58000
between 2002 to 2003. This leads to decrease in demand for schools.
Since the government forces some schools to close down in order to minimize their
expenditure on education, the supply of schools decreases.
P
P
D2
D1
P
P
S2
0
Q
(SCHOOLS)
S1
0
Q
(SCHOOLS)
According to another article of Ming Pao dated 26/2/04, the reduction of 88 classes
last year caused excess supply of 541 teachers and it was predicted that an excess
supply of 700 teachers may occur in the coming year. As a results, teachers are one of
the victims in the article.
In Economics, teachers are employed by schools and are regarded as labour. Labour
refers to the human efforts, both mental and physical, used in production. The supply
of labour is affected by the population size, the percentage of the population that
works and the number of working hours.
2. Occupational mobility of teachers
In fact, teachers are occupationally immobile. Occupational mobility refers to the ease
at which a factor can change from one form of occupation to another. Teachers are
occupationally immobile is because firstly, they usually teach one or two specific
subjects and are also experts in the subjects they teach. That means that they are
specialization of labour is practiced in production process. The skills of each teacher
are limited to certain jobs and they occupational mobility is lower. Secondly, teachers
have to follow strict rules and must have certain requirements. This would also lower
their occupational mobility.
3. Methods of wage payments teachers:
Teachers are mainly paid by time rate. This means that they are paid according to the
length of time they have worked and wages are expressed per a certain period of time.
The main reason for using this method of payment is because it is difficult to measure
their outputs. The advantage of using this payment method is that it is easy to
calculate the wage and it can ensure that teachers would have stable income. But there
are some disadvantages of this payment method as it may be unfair to hardworking
teachers and that it may lower their working incentive.
4. Division of labour
Division of labour is practiced in most Schools. As resources are scarce, they must be
organized in a way that gives the greatest output so as to satisfy more of our wants.
This is why we always see that each teacher is responsible for a certain role and in
one or two subjects. It is also called complex division of labour as it takes place where
different people specialize in a particular production stage of a service. Division of
labour can increase the productivity so that more output is produced from the same
number of labour. That means through division of labour, the same number of
teachers would be able to teach more students. It would increase productivity if they
choose the most suitable teacher to teach the subject they are good at. This would save
time in training as they are only required to be trained in their own subject which they
are responsible for. Also, practice makes perfect. If teachers are used to teaching their
own subject, they would become more skillful. Another advantage is that this can
make full use of capital goods like the teaching materials as the teacher can use them
in teaching different classes.
5. Derived demand
The demand for some goods results from the demand for another good. It is called
derived demand. Since the birth rate decreases, there is a smaller demand for primary
schools. The demand for primary schools’ teachers results from the demand for
schools. When there is decrease in demand for primary school, there will also be a
decrease in demand for primary schools’ teachers. Hence, demand for primary
schools’ teachers is derived demand.
P
P
P
P
D2
0
D1
Q
Primary schools
D2 D1
0
Q
Primary schools’ teachers
Due to the decrease in birth rate,
demand for primary schools’ teachers
Decrease in demand for primary
schools’ teachers results from the
decrease.
decrease in demand for primary
schools.
6. Tertiary production
Tertiary production is the provision of various kinds of services. The tertiary sector is
highly diversified. Teachers are tertiary producers. Because teachers provide services
to the students. They use the capital goods like textbooks, television, projector and
computers for help to teach us knowledge. Hence, tertiary production and secondary
production are interdependent. The tertiary producers provide consumer goods and
capital goods to tertiary producers in order to provide higher quality services. In
return, the tertiary producers provide commercial services to secondary producers.
7. Free goods
A free good is a good that is sufficient to satisfy human wants. More of it is not
preferred. People will not pay or will not give up anything for it. For example, sea
water, sunlight and sand in the desert. There is no cost of production.
Someone may argue that 9-year free education is same as a free good because it is
free of charge. However, 9 –year free education is not a free good. Instead, it is a
capital good because there is a cost of producing the service as teachers are paid with
wages. Also, the quantity of free education is not sufficient to satisfy human wants.
More of them are preferred by students. So it is a scarce good or an economic good. \
In addition, since the wages of teachers of the government school are paid by the
government, the government schools needed to be closed down in order to solve the
serious budget deficit.
8. Geographical mobility
Geographical mobility refers to the ease at which a factor can move from one place of
work to another. Teachers are geographically mobile because teachers can choose to
teach in some places where education is most needed.
In this case, due to the government policy, some schools with insufficient students
needed to be closed down. According to the information given from Ming Po, some
laid off teachers will choose to teach in some special classes, such as 中五毅進課程,
職業導向課程, etc. This shows that teachers are geographically mobile.
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