[barry-cotter]

Education has remarkably little to do with economic growth. Richer countries are more educated but changes in education do not predict changes in productivity. Education appears to be a superior good that people just purchase more of when they’re richer.

Ghana is more educated now than France was in 1960 going by average years of education and it’s poorer. China’s years of explosive economic growth after Deng opened it up in the 1980s happened with a population that had on average finished primary school.

India’s plan to build a highly educated workforce and industrial base in tandem was a thorough and costly failure. Lots and lots of people tried to get a good education so they could go for civil service jobs. It did nothing industrially because running a successful industrial policy is a lot harder than either leaving businessmen to their own devices, taxes and regulation aside, to make their own business decisions, or running a captured, cronyistic industrial that wastes money and is swept aside as soon as the policy is abolished. Ireland, India, Pakistan, Argentina; there are many countries that wasted enormous sums on infant industry tariffs to no benefit.

[rizwank]

Do you have a resource to recommend that suggests reasons and provides data for this seemingly paradoxical observation?

[barry-cotter]

Bryan Caplan, The Case Against Education

From the Section “The Education Premium: Personal versus National”

> “When we move to the national level, these clean results vanish.65 Some prominent economists find that boosting national education slightly impoverishes countries rather than enriching them.66 Others report small positive effects; one typical estimate is that an extra year of national education boosts national income by 1.3%–1.7%.67 Remaining papers find moderate positive effects; the effect of national education on national income roughly equals the effect of personal education on personal income.68 No matter what they find, researchers usually confess their answers are highly uncertain.69”

> “65. For overviews, see Pritchett 2006, Bosworth and Collins 2003, and A. Krueger and Lindahl 2001. 66. See, e.g., Pritchett 2001, pp. 367–91, Islam 1995, and Benhabib and Spiegel 1994. 67. A. Krueger and Lindahl 2001, p. 1125, columns (2), (3), and (5). 68. For a survey, see Lange and Topel 2006, pp. 462–70. 69. One major exception: D. Cohen and Soto 2007 emphasizes the high quality of their data and the low uncertainty of their results. But even their findings dramatically hinge on their sample. When they look at 59 countries over 1960–90, a year of education raises national income by 4.9%. When they look at 81 countries over 1970–90, a year of education raises national income by 9.0% (D. Cohen and Soto 2007, p. 68, columns 5 and 10).”