The Contribution of Education to Economic Growth

TARGET GROUP: YOUNGER ADULTS

OBJECTIVES

·        To give poor countries the human capital boost necessary to bring large segments of the population out of poverty and for more industrialised countries, tertiary education of younger adults also plays a key role in economic growth (IIASA 2008).

SUMMARY

There are many reasons why education is important, this report focuses on its contribution to economic growth and outcomes. Education ‘can be defined as the stock of skills, competencies, and other productivity-enhancing characteristics’ (WEF 2016). In general, education—as a critical component of a country’s human capital—increases the efficiency of each individual worker and helps economies to move up the value chain beyond manual tasks or simple production processes (WEF 2016). Human capital has long been considered the most distinctive feature of the economic system and further work has proven the impact of education on productivity growth empirically. The World Economic Forum 2016 suggested three channels through which education affects a country’s productivity. First, it increases the collective ability of the workforce to carry out existing tasks more quickly. Second, secondary and tertiary education especially facilitate the transfer of knowledge about new information, products, and technologies created by others (Barro and Lee 2010). Finally, by increasing creativity it boosts a country’s own capacity to create new knowledge, products, and technologies.

REFERENCE:

https://assets.publishing.service.gov.uk/media/5b9b87f340f0b67896977bae/K4D_HDR_The_Contribution_of_Education_to_Economic_Growth_Final.pdf