Education and Economics

 Irina Petrenko 

October 20th

Econ A2

Reuter

                                                Education and Economics

    Every year the number of students in classes gets higher and higher. In countries such as East Asia and the Pacific, the schooling grew from around two to seven years, in the last 20 years. While in 1950 the average time span of schooling in Africa was slightly below two years, it has come up to more than five years today. It is projected to rise to 10 years on average by 2050. However, there are still 124 million kids worldwide that are not in school.  As well as, more than 250 million of the ones that actually do go to school cannot read, or write even after several years of schooling.  

 The Human Capital Theory says that investing in education has a payoff in terms of higher wages later on.  Furthermore, it is backed up by science, as explained by James Heckman. Neurogenesis explains that learning can continue into advanced ages. It  is usually way more beneficial to invest in the younger population rather than older. As well as investing in more capable workers would be a lot more beneficial rather than less able ones, and ability forms within children of a very young age. On an average an added year of schooling raises earnings by 10 percent a year.  This is overall higher than any investment an individual could possibly make. 

   The main reason for the recent change in the returns pattern, has been the race between technology and education, as labor markets adjust to include more automation and less labor workers.  In this new world, the ability of workers to compete is handicapped by the poor performance of education systems in most developing countries, such as weak education in schools in America, targeted to make more low income worker class adults, rather than higher education brainiacs. As more and more machinery is replacing labor and workforce, global competition demands mastery of competencies and the acquisition of new skills for many. To promote success in today’s labor market, one needs to start investing early, and then invest in the relevant skills for as long as they possibly can. Above all, countries need to start investing smartly, by promoting attention to the basic 3 A’s: Autonomy, Accountability, Assessment. The government also needs to start paying attention to teachers, early childhood development and culture. Education systems that do well start preparing kids at the earliest age possible, reform continuously, and use information to make room for improvement and accountability. Especially test-based accountability is cost-effective.  Even if the accountability costs that we have now were 10 times as large as they are, they would still not amount to even 1% of the cost of public education. Countries need to start improving quality, strive for excellence, and expand opportunities, based on efficiency and equity. 

 While the returns to schooling are higher lately on average, there must be better information provided for such students who don’t perform as well as others, and greater support networks to help them take on the challenges of completing their able level of education. Also more information will give additional benefits to students and families from disadvantaged backgrounds, who tend to overestimate benefits and underestimate their costs. Education is amazingly one of the most powerful instruments for reducing poverty and inequality that we have, and it sets the foundation for sustained economic growth. Let’s start investing in it more. 

Works Cited

Hanushek, Eric A., et al. “Education and Economic Growth.” Education Next, 30 July 2020, www.educationnext.org/education-and-economic-growth/.

Radcliffe, Brent. “How Education and Training Affect the Economy.” Investopedia, Investopedia, 28 Aug. 2020, www.investopedia.com/articles/economics/09/education-training-advantages.asp#:~:text=A country's economy becomes more,require literacy and critical thinking.&text=In this sense, education is,an investment in better equipment.