Education and economic development

…I was left wondering if anybody knew what education was really about. I have begun to suspect that economic development causes education to develop even if governments don’t force it as Korea has done.. After all, that’s how education got started. When we were all hunters and gatherers 10,000 years ago, we did not have time for education…Only when our productivity for food production increased did we have time for other things.

…It’s possible that poor countries today will not get out of their poverty traps without political changes. Those political changes may only be possible with broader education. The point is, however, that education is not a constraint on the ability of today’s workforces to achieve substantial productivity improvement around the world. Constraints on productivity improvements are the reason education is not developing faster around the world.

That’s from William Lewis’s interesting The Power of Productivity.

My take: I’ve never drawn many real conclusions from the cross-sectional correlations between education and economic growth. These statistical methods are not ideal for ferreting out causal relationships. Hours of television watched probably correlates with growth as well. That being said, I do see at least one special feature of education. If a family in a developing country decides to invest heavily in the education of the children, it is a very special signal. That family has crossed a particular line and is taking a very definite stance within its community. That family will almost certainly be a positive force for growth. In this regard investing in education is a bit like converting to Mormonism. The decision to become a Mormon, for growth, can be at least as important as Mormon doctrine itself. Mormon families in Latin America typically are committing to a greater work ethic, tight family bonds, no alcoholism, entrepreneurial aspirations, and close connections to their religious peers.

Addendum: This paper argues that IQ outperforms education in traditional growth equations.


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