Economic growth and education

If more education leads to faster economic growth, then investments in education could pay for themselves in the long run, and could also play a role in reducing poverty. Such reasoning could be crucial in bolstering political support for education investments and ensuring their sustainability. This page considers the evidence for an education-growth link, and explores some of the issues that governments and donors face in making investments which will best take advantage of the potential for education to contribute to economic development.

The papers under rates of return to education look at the differences in productivity and wages between people with different levels of education – one route through which education could ultimately impact on a country's economy as a whole. These papers also shed light on the question of how much money should be allocated to primary, secondary, and higher education, when overall resources are limited. The second section of this page highlights how vocational education has often been neglected when making such decisions. A final set of papers consider how both developed and developing countries can lessen the negative impact, and maximise the positive impact, of the brain drain of educated professionals from poor to rich countries.

Rates of return to education

If education is seen as an investment in human capital, then what kind of return can individuals – and society as a whole – expect to get back from this investment? By comparing the wages of people with different levels of education (e.g. no schooling versus primary schooling), these papers try to estimate the long-term financial benefits of each level. Recommended reading...

Vocational education

Vocational education is still seen by many as “second class” education, and fell out of favour with donors and governments following a policy shift in the 1980s. But in a globalising world, the importance of vocational skills to economic development is increasingly being recognised. These papers examine the many forms of vocational education and highlight the case for more investment in it. Recommended reading...

Brain drain

If there is a link between education and economic growth, then “brain drain” – better-educated individuals migrating to richer countries – is likely to be damaging. On the other hand, remittances from migrant workers are an important source of national income for some developing countries. These papers weigh up these issues and consider policy responses. Recommended reading...

More on the economics of education: the complete listings from Eldis