MI 2023 PU1 H1 Econs EOY questions and markers report

2 Question 1: Education in Singapore Table 1: Government Expenditure on Education in Singapore Year Expenditure on Primary schools (S$ Thousand) Expenditure on Tertiary education (S$ Thousand) 2012 1,946,159 3,846,318 2013 2,185,580 4,367,236 2014 2,263,510 4,170,881 2015 2,457,901 4,302,171 2016 2,563,211 4,569,272 2017 2,731,770 4,427,056 2018 2,823,567 4,608,243 2019 2,738,444 4,307,399 2020 2,674,257 4,155,545 2021 2,944,535 4,225,708 2022 3,165,939 4,285,779 Source: SingStat, accessed 12 September 2023 Extract 1: Benefits of education are societal and personal Education is associated with a wide range of benefits to both individuals and society. Education builds human capital as it increases individual’s capabilities, enhancing economic productivity and facilitating the development and adoption of frontier technologies. People with higher levels of education enjoy premium in employability and earnings. They are more likely to find employment, remain employed, learn new skills on the job, and earn more over their working life relative to those with lower levels of education. The economic benefits are not limited to individuals. Educated citizens earn more, pay higher taxes over a lifetime, and cost less for their governments in terms of social entitlements and welfare. Not only are the economic returns greater at the tertiary level, but growing evidence also points to the importance of high-quality early childhood education and care given its long- term social and economic benefits, such as supporting learning in later grades, increasing equity and social mobility, and reducing poverty. By fully recognising the power of education, policy makers could better address diverse societal challenges. Source: Adapted from OECD review, 29 November 2022 Extract 2: Rising demand for preschools but not enough teachers Young parents are increasingly sending their kids to infant care as they have limited alternative care arrangements for their child. Parents in the past used to rely on grandparents or domestic helpers to take care of the young babies. However, there is a trend of more grandparents returning to the workforce or pursuing their personal interests, and also a shortage in getting new domestic helpers into Singapore. With the continuous government investment in

2 developing the preschool sector, many young parents’ confidence in the infant care centres have also increased. In addition, many parents are returning to the workplace post-pandemic. These various reasons have drove up the demand for places at preschools and infant care centres. However, early childhood education centres may not have enough teachers t o cope with the better business. Early childhood education providers are actively recruiting teachers to meet the increased demand, dangling competitive pay packages and better welfare benefits. Beyond the standard qualifications, many early childhood educ ation providers want candidates with passion and have a genuine desire to work in the sector. However, the tight labour market has posed huge challenges to the hiring efforts. Some early childhood education providers have tweaked some of its work processes to ensure that their existing teachers are not overwhelmed. Source: Adapted from Channel News Asia, 15 February 2023 Extract 3: The Preschool sector in Singapore Preschools in Singapore can generally be classified into two categories: Schools that are funded by the Government, or “government -supported” preschools, and those that are not whereby they are run by private operators. For children who are Singapore citizens aged five to six, the preschool participation rate is 97 per cent in 2022, according to the Early Childhood Development Agency (ECDA). Enrolling a child into a kindergarten programme in government-supported preschools costs around S$160 a month while fees at schools run by private operators can reach S$3,000 . There is a belief that private preschools provide services that are comparatively more “premium” but experienced educators in the industry said that the definitive differences between both are not as straightforward in recent years due to an increase in government funding and regulatory standards. Source: Adapted from Today Online, 11 September 2023 Extract 4: Developing the Preschool sector in Singapore Prime Minister Lee Hsien Loong noted in his National Day Rally speech that a “major shift” has been made to improve preschool education in recent years. “We want to start earlier in a child’s life because these years make a big difference to a child’s development. A good preschool education can make a crucial difference,” he explained. Indeed, the early years are important for a child’s development, as the foundational literacy and numeracy skills developed enables them to have a smoother transition from preschool to formal education in primary schools, a fact that many parents are unaware of. Singapore’s annual spending of about S$1 billion on early childhood education will more than double over the next few years, as the Government looks to make preschools more affordable. This includes plans to increase the number of government-supported preschools to 80 per cent over time. There will also be an increase in the quantum of preschool subsidies across the board, announced Mr Lee. Currently, just over half of all preschool places are government-supported. Source: Adapted from Channel News Asia, 18 August 2019

Questions (a) (i) With reference to Table 1, compare the government expenditure on primary school education and tertiary education over the period 2012-2022. [2] (ii) Explain one possible opportunity cost for the government expenditure on education. [2] (b) Using Extract 1 and a production possibility curve diagram, explain the impact of an increase in education expenditure on the Singapore economy. [3] (c) Using Extract 2 and a diagram, explain how two demand factors would affect the preschool education sector in Singapore. [5] (d) Using price elasticity of demand (PED), explain how the challenges in recruitment (Extract 2) is likely to affect the total revenue of a preschool education provider in Singapore. [6] (e) Using Extract 3 and your own knowledge, explain one advantage and one disadvantage of joint provision in the preschool sector. [4] (f) (i) Assess whether imperfect information is the main reason for government intervention in the preschool education sector. [8] (ii) Discuss the view that subsidies is the best policy for the government to achieve a more efficient allocation of resources in the market for preschool education. [10] [Total: 40 marks] End of Paper

4 Suggested Answers (a) (i) With reference to Table 1, compare the government expenditure on primary school education and tertiary education for Singapore over the period 2012- 2022. [2]  Both government expenditure on primary school education and tertiary education for Singapore have generally increased from 2012 to 2022. [Similarity - 1m]  However, the government expenditure for tertiary education is consistently/always higher than the expendi ture on primary school education. OR The expenditure on Primary Education (62.7%) increases to a greater extent than that of Tertiary Education (11.4%) [Difference – 1m] Note: Rate of change is not acceptable as a difference. Marker’s comments  Some students are giving descriptive answers (e.g. overquoting data), giving year -by-year descriptions, and has not shown the ability to process data  Common mistakes: - Only providing one point of comparison, which only warranted one mark - Providing two separate trend descriptions instead of comparing a similarity and difference in trend - Stating anomalies in trend over