Education: Past, Present, and Future Global Challenges

This World Bank paper looks beyond our borders to
determine the marginal loss of income and equity associated with slower rates
of human-capital accumulation in the developing world. In layman’s terms
(though the dense economic paper never affords them to the reader): How much
does each additional year of schooling affect a country’s economic growth and
social equity? Using a new data set, the paper looks at 146 developing nations
and draws a few interesting conclusions. First, the authors conservatively
estimate a 7 to 10 percent average per capita income gain for each additional
year of schooling, as well as a societal-inequity reduction of 1.4 points on
the Gini index. Further,
countries whose average educational attainments have reached the level of basic
literacy (i.e., they’ve moved from five to six attained years of schooling) see
a net increase of 15.3 percent to their per capita income. Comparing Pakistan and
South Korea, the paper reports that, in 1950, both countries had similar per
capita incomes ($643 and $854 in constant dollars, respectively). But as South
Korea’s educational attainment rose—by 2010 it had reached 11.8 years, dwarfing
Pakistan’s 5.6 years—so did its income level. In 2010, South Koreans, on
average, made $19,614 compared to Pakistan’s $2,239. As the authors are quick
to remind, there are many caveats associated with research of this nature (the
effect of externalities, the self-employed, whether a country simply strikes
oil or a gold mine, etc.). But the correlations cannot be discounted and lessons for the United States still remain, as
some state and city attainment rates fall far below their peers—and as the variant
quality of the education doled out leaves some Americans years behind.

Harry
Anthony Patrinos and George Psacharopoulos, “Education:
Past, Present, and Future Global Challenges
,” (Washington, D.C.: The World Bank Human Development Network, March
2011).

More By Author