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Study of Correlations Between Quality of Education and the Economic Growth of a Developing Country

April 07, 2019
Zheng Jia

Abstract: The belief that increasing years of education guarantees economic success has yet to be proven true even if more schooling is associated with a higher income. Attaining an education is not the only factor that contributes to individual success because there are other critical factors, such as one’s cognitive skills, influence of families and peers, and proper health and nutrition. The quality of educational programs and the discrepancy in workers' skills and income levels become significantly noticeable when people fully integrate into the labor force.

Based on the current research on "quality education" and its effect on the economic growth of a country, this paper shows how the education reform is necessary. Instead of solely focusing on education attainment, more policies to improve education quality in developing countries is imperative. The quality of education should be measured by cognitive skills which have robust correlations with the GDP per capita growth as well as individual earning rates.  Stronger accountability systems, local autonomy of schools, and incorporating choice and competition in schools are all effective policies that can improve the overall incentives in schools to improve the quality of education in developing countries.


Introduction: The belief that increasing years of education guarantees economic success has yet to be proven true even if more schooling is associated with a higher income [1]. Attaining an education is not the only factor that contributes to individual success because there are other critical factors, such as one’s cognitive skills, influence of families and peers, and proper health and nutrition. The quality of educational programs and the discrepancy in workers' skills and income levels become significantly noticeable when people fully integrate into the labor force [2].

UNESCO's “Education for All” initiative and the “Millennium Development Goals” have focused on raising the population’s schooling levels to increase education attainment[1]. However, this  approach is flawed for mainly four reasons. First, many countries in the past that have expanded schooling opportunities have not seen improvements in their economy. Second, there are many differences between developed and developing countries, aside from schooling levels within their respective population.  In addition, some developing countries may not have established, effective educational policies and programs. Lastly, even if effective programs and policies are in place, the approach in implementing these programs may be ineffective, and therefore may not result in the anticipated outcomes. [1]  Research on the economic impact of schools tends to ignore these differences that exist between developing and developed countries, which can distort education and economic outcomes.

Therefore, rather than focusing on educational attainment and increased years of schooling, assessment of success should measure knowledge or cognitive skills especially in an international context [2].These quality differences are crucial and important in recognizing the reasons for discrepancies in education, skills, and individual earnings.

Educational quality is a driving factor in the individual earnings and overall economic growth of a country. [1] Currently, there is a lack of effective policies that can substantially increase cognitive skills, but evidence suggests that changing school policies and incentives can have a positive impact on the economic outcome. Overall, educational quality, which has significant effects on economic growth, is much worse in developing countries and cannot be solved with increase years of schooling alone. To effectively solve this problem, major institutional changes would be required.

Based on the current research on "quality education" and its effect on the economic growth of a country, education reform is necessary. Instead of solely focusing on education attainment, more policies to improve education quality in developing countries is imperative. The quality of education should be measured by cognitive skills which have robust correlations with the GDP per capita growth as well as individual earning rates.  Stronger accountability systems, local autonomy of schools, and incorporating choice and competition in schools are all effective policies that can improve the overall incentives in schools to improve the quality of education in developing countries.


References

[1] https://www.brookings.edu/articles/unequal-opportunity-race-and-education/

[2] https://inequality.stanford.edu/sites/default/files/Pathways_SOTU_2017_education.pdf

[3] https://www.nap.edu/read/10256/chapter/6#71

[4] https://news.stanford.edu/2017/06/16/report-finds-significant-racial-ethnic-disparities/

[5] https://www.brookings.edu/research/race-gaps-in-sat-scores-highlight-inequality-and-hinder-upward-mobility/

[6] https://www.brookings.edu/research/the-importance-of-high-quality-general-education-for-students-in-special-education/


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