Question

In class, we saw that countries with high levels of schooling attainment generally have higher income and growth rates than countries with low levels of schooling attainment. Based only on the model of individual schooling decisions discussed in class, what are two characteristics which you would expect to be systematically different between countries with high vs. low schooling attainment?

Answer 1

Based on difference in level of schooling attainment, a country with higher attainment will have more advantage, in terms of economic development and social development.

Economic advantage:

If the population is well educated, workforce participation is higher. Also, it is relatively more easily employable than the population with low schooling as the training of an uneducated workforce costs more and is time-consuming. Higher worforce participation, combined with good eduation increases the productivity of workers. As workers are employed in more and more productive sectors, they experience rising income. The economic growth is also higher and this growth rewards are like returns on education. A good practical example of this is China.

China, by developing its primary education first and manufacturing base later, has able to reap benefits of an educated workforce. It is one of the fastest growing countries of the world with huge improvements in living standards and also poverty reduction.

Also, a well-educated country is more adaptable to changing technology or changing business environment. It is easy to impart new training to a population which has already learned the basic skills. Infact, because such countries will be more inclined to spend on research and innovation, they can be a leader in technological advancements (e.g- USA).

Social Development:

The countries with higher level of schooling are expected to perform better on social indicators like: literacy rates, life expectancy, overall nutrition levels, social security, gender inequality etc. A more aware population demand better goods and services like better healthcare, better social infrastructure and make more peaceful society. This, in fact has been evident in performance of countries like Norway, Sweden and some other Scandinavian countries. These are best performing countries on Human Development Index (HDI) developed by UNDP.