Ms P. and the terrible underutilization of Malawi’s human capital

P. (name redacted for her privacy, unless she tells me she’d rather have me post it here) is one of the strongest candidates I interviewed for a position as a supervisor on my project. Smart and motivated, she’d like to end up starting her own business someday. But she couldn’t find a private-sector job right out of college, so ended up working on a survey, where she quickly moved up into a supervisory role. That situation changed recently – she let me know she’d be going for another interview with a private company, and probably couldn’t serve on the project. Talented as she is, this was something of a relief for me, since it made a very difficult choice between applicants a little bit easier.

But it also highlighted one of the absurdities of doing fieldwork over here. Every one of the people who applied to work on my study is college-educated, most with degrees from the top university in the country. They’re all quite smart and motivated, so naturally they want to work in… research? But they do. In fact, unlike P., most plan to make a career of it. Similar situations abound: I’ve heard stories of a family of teachers whose aspiration for their daughter is to have her snare a job as a driver for some kind of aid/research organization; apparently this is among the best jobs around, far better than teaching (you stay in the same hotel as the guy you’re driving, and make high-level local staff pay). You’ll be forgiven if you’re shaking your head in confusion here. As a Kool-Aid-drinking economist I have no doubt these young men and women are making individually optimal choices. Indeed, relative to what else is available in Malawi, field research is a solid job.

For Malawi as a whole, however, their choices is a big problem. According to the 2004 DHS, just 0.71% of Malawians have any education beyond high school, and I believe that includes people who’ve dropped out of programs and those in vocational and teacher education programs. I can’t get precise numbers for the share of college grads, but I’ve heard the figure is a mere 30,000 out of a country of 15 million. As Murphy, Shleifer and Vishny showed in clever piece back in 1991, how you allocate those scarce talents matters. In their empirics the focus was on lawyers vs. engineers, but in Malawi I’m increasingly obsessed with the question of entrepreneurs vs. NGO, international organization, and research team staff.

I want to be extremely clear: none of these folks are making poor decisions or doing anything immoral. Starting a business just isn’t that great of a job opportunity here, relative to the options in aid and research. But because high-end human capital is so scarce, the lure of those jobs means they aren’t putting their skills to work in areas where they might create productive opportunities for others. It’s hard to see employment for the other 99.7% of Malawians ever taking off until that changes.

We can – and should – put forth useful efforts to help improve the health and welfare of people in developing countries like this one. But we need to also be aware of the potentially awful cost of efforts that aren’t useful. Wasted dollars don’t just represent other aid projects left undone, or issues that need explaining to dollars. By virtue of being misspent in the target countries, they represent misallocated resources in local economies that can potentially lead to increased poverty and even death.

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About Jason Kerwin

http://nonparibus.wordpress.com/author
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4 Responses to Ms P. and the terrible underutilization of Malawi’s human capital

  1. Pingback: I think so Brain, but won’t our necks get tired if we put on all those hats? « Academic Progress Goes "Clunk"

  2. Pingback: Fact check: Malawi really does have just 30,000 college graduates | MethodLogical

  3. Pingback: Is it a moral imperative to pay people above-market wages? | Ceteris Non Paribus

  4. Pingback: The moral obligation to haggle in developing countries | Ceteris Non Paribus

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