INVESTING IN EDUCATION PAYS RICH DIVIDENDS
OECD study says education key to growth
But access to higher levels of schooling progressing slowly in many countries
By CAROLINE ALPHONSO
EDUCATION REPORTER
Tuesday, February 18, 2003 - Page B19 (Website:
GLOBE AND MAIL)
Investing in education pays off for the world's emerging countries,
substantially boosting economic growth.
That's the finding of a new study to be released today that shows investments in
human capital over the past two decades may have accounted for about a
half-percentage-point gain in the annual growth rate in 16 developing countries.
The study, conducted by the United Nations Educational Scientific and Cultural
Organization (UNESCO) and the Organization for Economic Co-operation and
Development, looked at the connection between the level of education of the
labour force and economic growth.
There is "robust evidence" that human capital is a key determinant of economic
growth, the study noted.
"Education is increasingly considered an investment in the collective future of
societies and nations, rather than simply in the future success of individuals,"
said the study, titled Financing Education -- Investments and Returns.
The link between education and economic growth over the past two decades was
strongest in Argentina, Chile, Jamaica, Malaysia, Peru, the Philippines and
Uruguay.
In 1960, for example, people in Chile between the ages of 15 and 64 had spent an
average of 6.19 years in school and per capita gross domestic product stood at
slightly less than $4,000 (U.S.). But by 2000, the average time at school
climbed to almost 10 years and GDP increased to about $7,000. (The comparisons
are based on a 1995 constant dollar rate.)
It's a similar picture in Thailand, where in 1960, those between 15 and 64 years
old spent an average of 2.6 years in school, and per capita GDP was less than
$1,500. Forty years later, however, average schooling rose to 7.51 years and GDP
was up to about $4,000 per capita.
Human capital plays a strong role in economic growth, and "high levels of upper
secondary and tertiary attainment are important for human capital to translate
into steady growth," the study said. At the same time, access to secondary and
post-secondary schooling is progressing slowly, the authors noted.
For example, in 1960, adults in the surveyed countries had spent an average of
3.4 years in school. But by 2000, this had climbed to only 7.6 years -- almost
three years shy of the 10.2 years in the rich economies of the OECD.
The authors said that at this rate, it will take another 30 years for some of
these countries to reach OECD levels.
To accelerate the participation rate in education, many of the emerging
countries are getting funds from private sources, such as households and
individuals. In places like China and Paraguay, for instance, more than 40 per
cent of the money spent on education comes from the private sector, compared
with the OECD average of 12 per cent. An average of one in six primary school
students attend private schools, compared with one child in 10 in OECD member
countries.
The report warns that private sector money does not solve the problem of access
in these developing countries, where the poor can't afford to pay for schooling.
Nevertheless, the results of the developing countries surveyed suggests that for
every year the average schooling of the adult population is raised, there is a
corresponding increase of 3.7 per cent in the long-term economic growth rate.
In Indonesia, a man with a post-secondary education earns on average 82 per cent
more than a person who only graduated from high-school. In Paraguay, the
difference is as high as 300 per cent.
The emerging countries surveyed were Argentina, Brazil, Chile, China, Egypt,
India, Indonesia, Jamaica, Malaysia, Paraguay, Peru, the Philippines, Thailand,
Tunisia, Uruguay and Zimbabwe.
INVESTING IN EDUCATION PAYS RICH DIVIDENDS
confirms UNESCO/OECD study (Web site:
UNESCO )
Editorial Contact : Sue Williams: Bureau of Public Information, Editorial
Section. Tel: +33 (0)1 45 68 17 06 Email: s.williams@unesco.org
Cristina L’Homme : Bureau of Public Information, Editorial Section. Tel: +33
(0)1 45 68 17 11 Email: c.l-homme@unesco.org
Nicholas Bray: OECD. Tel: +33 (0)1 45 24 80 90. Email: nicholas.bray@oecd.org
18-02-2003 12:20 pm (GMT) Paris – Investing
in secondary and tertiary education – and not just primary education - pays rich
dividends. A study by UNESCO and the Organization for Economic Cooperation and
Development (OECD)* on 16 emerging economies finds that investments in human
capital over the past two decades may have accounted for about a half a
percentage point in the annual growth rates of those countries**.
However, the study also finds that access to secondary and tertiary education –
the key to building a skilled and knowledge-based workforce – is progressing
slowly. In 1960, say the authors, adults in the surveyed countries had spent an
average of 3.4 years in school. By 2000, this had climbed to 7.6, almost three
years short of the 10.2 years in the rich economies of the OECD member states.
At this rate of progress, point out the authors, it will take another 30 years
for some of these countries to reach current OECD levels.
Entitled Financing Education – Investments and Returns, the study analyses the
link between the level of education of the labour force and economic growth in
16 of the countries taking part in the UNESCO/OECD World Education Indicators
programme (WEI), which tracks and compares their education development.
Apart from increased national wealth, the report also confirms, without
surprise, that education also benefits individuals. Better educated people, it
states, fare much better on the labour market. They are more likely to be, and
remain, employed, and the better qualified they are, the more money they earn.
In Indonesia for example, a man with tertiary education earns an average 82
percent more than a man with only secondary qualifications. In Paraguay the
difference is as high as 300 percent.
The report finds that the link between education and economic growth over the
past 20 years was strongest in Argentina, Chile, Jamaica, Malaysia, Peru, the
Philippines and Uruguay, and during the 1990s alone, in Brazil, Indonesia,
Thailand and Zimbabwe.
In 1960, for example, Chile’s 15 to 64 year-olds had spent an average 6.19 years
at school, and per capita GDP stood at slightly less than US$4,000 (1995
constant dollar rate). By 2000, average time at school had climbed to almost ten
years and GDP had increased to about US$7,000.
* Financing Education – Investments and Returns, Analysis of the World Education
Indicators 2002 Edition. UNESCO/OECD, Paris, 2002. ISBN 92-9189-001-4.
** Argentina, Brazil, Chile, China, Egypt, India, Indonesia, Jamaica, Malaysia,
Paraguay, Peru, the Philippines, Thailand, Tunisia, Uruguay and Zimbabwe.
Malaysians in 1960 spent an average 3.22 years in school, with a per capita GDP
of US$2000. By 2000, average years of schooling had increased to 9.31 years and
per capita GDP had risen to about US$6,000.
Thailand’s 15 to 64 year olds had spent an average 2.6 years at school in 1960
and per capita GDP stood at less than US$1500. Forty years later, average
schooling had risen to 7.51 years and GDP to about US$4,000 per capita.
According to the report, results were more limited in Egypt, India and Tunisia,
which started off with “considerably lower levels of educational attainment”
than the other survey countries, with respectively 1.01, 1.17 and 0.83 average
years of schooling in 1960.
This suggests, say the authors, that human capital plays a stronger role in the
economic growth process once it reaches a critical threshold and that “high
levels of upper secondary and tertiary attainment are important for human
capital to translate into steady growth.” Improving access and completion is the
key to building up this critical mass, claims the report.
In their quest to accelerate participation in education, the report shows that
the WEI countries are mobilizing funds from a wide range of private sources,
including individuals and households which contribute much more to education in
these countries than in the OECD member states. In Chile, China and Paraguay,
for example, more than 40 percent of the total amount spent on education comes
from such private sources. The OECD average is 12 percent.
This has given rise to the rapid development of private education services -
from wholly private, independent institutions to schools that have
been“sub-contracted” by governments to non-governmental oranizations and
municipalities. In Zimbabwe and China, for example, government-subsidized,
community-managed schools are the backbone of the education system.
Across the WEI countries an average of one in six primary pupils attend private
schools (mostly state-subsidized), compared to only one child in ten in OECD
member states. Private enrolment rates increase at secondary and tertiary
levels. In Brazil and the Philippines, for example, independent private
institutions respectively account for 63 and 73 percent of university students,
compared to only ten percent in OECD countries.
The report warns however that private sector development does not solve the
problem of access in the survey countries, which often have high levels of
inequality and poverty, and where the poor may not be able to pay for education.
They point out that at the turn of the new century, school expectancy for five
year-old children in the WEI countries was still almost four years below the
OECD average.
Without effective and increased investment in human capital, conclude the
authors, knowledge, which has become a key economic resource, will be scarce.
With effective investment and equitable distribution, knowledge can become not
only abundant but renewable and self-generating – a distinction that will
separate economic winners from the less successful.
Authors
UNESCO Institute for Statistics: Albert Motivans,UNESCO Institute for
Statistics,Tel: +1 (514) 343-6111, ext. 4528.E-mail: a.motivans@unesco.org
OECD: Karine Tremblay, Tel: +33 (0)1 45 24 91 82 E-mail:
karine.tremblay@oecd.org
Doug Lynd,Tel: +1 (514) 343-6111, ext.4527. E-mail: d.lynd@unesco.org
Andreas Schleicher. Tel : +33 (0) 1 45 24 93 66 E-mail:
andreas.schleicher@oecd.org
INVESTING IN EDUCATION PAYS RICH DIVIDENDS
UNESCO/OECD Study Confirms (WEB SITE:
OECD)
18/02/2003 - Investing in secondary and
tertiary education - and not just in primary education - pays rich dividends for
emerging economies, according to a new study by UNESCO and the OECD.
Financing Education - Investments and Returns focuses on 16 emerging economies:
Argentina, Brazil, Chile, China, Egypt, India, Indonesia, Jamaica, Malaysia,
Paraguay, Peru, the Philippines, Thailand, Tunisia, Uruguay and Zimbabwe. It
finds that investments in human capital over the past two decades may have
accounted for about a half a percentage point in the annual growth rates of
those countries.
However, the study also finds that access to secondary and tertiary education -
the key to building a skilled and knowledge-based workforce - is progressing
slowly. In 1960, say its authors, adults in the surveyed countries had spent an
average of 3.4 years in school. By 2000, this had climbed to 7.6, almost three
years short of the 10.2 years in the rich economies of the OECD member states.
At this rate of progress, point out the authors, it will take another 30 years
for some of these countries to reach current OECD levels.
Financing Education - Investments and Returns analyses the link between the
level of education of the labour force and economic growth in 16 of the
countries taking part in the UNESCO/OECD World Education Indicators programme
(WEI), which tracks and compares their education development.
Apart from increased national wealth, the report also confirms, without
surprise, that education also benefits individuals. Better educated people, it
states, fare much better on the labour market. They are more likely to be, and
remain, employed, and the better qualified they are, the more money they earn.
In Indonesia for example, a man with tertiary education earns an average 82
percent more than a man with only secondary qualifications. In Paraguay the
difference is as high as 300 percent.
The report finds that the link between education and economic growth over the
past 20 years was strongest in Argentina, Chile, Jamaica, Malaysia, Peru, the
Philippines and Uruguay, and during the 1990s alone, in Brazil, Indonesia,
Thailand and Zimbabwe.
In 1960, for example, Chile's 15 to 64 year-olds had spent an average 6.19 years
at school, and per capita GDP stood at slightly less than US$4,000 (1995
constant dollar rate). By 2000, average time at school had climbed to almost ten
years and GDP had increased to about US$7,000.
Malaysians in 1960 spent an average 3.22 years in school, with a per capita GDP
of US$2000. By 2000, average years of schooling had increased to 9.31 years and
per capita GDP had risen to about US$6,000.
Thailand's 15 to 64 year olds had spent an average 2.6 years at school in 1960
and per capita GDP stood at less than US$1500. Forty years later, average
schooling had risen to 7.51 years and GDP to about US$4,000 per capita.
According to the report, results were more limited in Egypt, India and Tunisia,
which started off with "considerably lower levels of educational attainment"
than the other survey countries, with respectively 1.01, 1.17 and 0.83 average
years of schooling in 1960.
This suggests, say the authors, that human capital plays a stronger role in the
economic growth process once it reaches a critical threshold and that "high
levels of upper secondary and tertiary attainment are important for human
capital to translate into steady growth." Improving access and completion is the
key to building up this critical mass, claims the report.
In their quest to accelerate participation in education, the report shows that
the WEI countries are mobilizing funds from a wide range of private sources,
including individuals and households which contribute much more to education in
these countries than in the OECD member states. In Chile, China and Paraguay,
for example, more than 40 percent of the total amount spent on education comes
from such private sources. The OECD average is 12 percent.
This has given rise to the rapid development of private education services -
from wholly private, independent institutions to schools that have
been"sub-contracted" by governments to non-governmental oranizations and
municipalities. In Zimbabwe and China, for example, government-subsidized,
community-managed schools are the backbone of the education system.
Across the WEI countries an average of one in six primary pupils attend private
schools (mostly state-subsidized), compared to only one child in ten in OECD
member states. Private enrolment rates increase at secondary and tertiary
levels. In Brazil and the Philippines, for example, independent private
institutions respectively account for 63 and 73 percent of university students,
compared to only ten percent in OECD countries.
The report warns however that private sector development does not solve the
problem of access in the survey countries, which often have high levels of
inequality and poverty, and where the poor may not be able to pay for education.
They point out that at the turn of the new century, school expectancy for five
year-old children in the WEI countries was still almost four years below the
OECD average.
Without effective and increased investment in human capital, conclude the
authors, knowledge, which has become a key economic resource, will be scarce.
With effective investment and equitable distribution, knowledge can become not
only abundant but renewable and self-generating - a distinction that will
separate economic winners from the less successful.
------------------------
"Financing Education - Investments and Returns" Analysis of the World Education
Indicators 2002 Edition UNESCO/OECD, Paris, 2002. See Executive Summary.
------------------------
Journalists may obtain a copy of the report from the OECD Media Relations
Division.
Non-journalists can obtain more information on the publication at
www.uis.unesco.org and www.unesco.org/publications or
www.oecd.org/els/education/statistics.
------------------------
Authors
UNESCO, Institute for Statistics, Albert Motivans (tel. 1 (514) 343-6111 ext.
4528) or Doug Lynd (tel.1 (514) 343-6111 ext. 4527).
OECD, Karine Tremblay (tel.33 1 45 24 91 82) or Andreas Schleicher (tel. 331 45
24 93 66).
Contacts
Sue Williams, UNESCO Bureau of Public Information, Editorial Section (tel. 33 1
45 68 17 06) or Cristina L'Homme, UNESCO Bureau of Public Information, Editorial
Section (tel. 33 1 45 68 17 11) or Nicholas Bray, OECD Media Relations (tel. 33
1 45 24 80 90).
INVESTING IN EDUCATION PAYS RICH DIVIDENDS
Just published -
Financing Education: Investments and Returns:
Analysis of the World Education Indicators 2002 Edition
(WEB SITE:
OECD PUBLICATIONS)
As individuals and nations increasingly recognize that high levels of
knowledge and skills are essential to their success, spending on education is
increasingly considered an investment in the collective as well as individual
future. Investment in human capital has thus moved to centre stage in the
strategies of WEI countries to promote economic prosperity, better-skilled
labour forces, social cohesion and other positive individual and social
benefits. However, investment in education competes with other public and
private demands and often faces severe constraints. The challenge of expanding
education systems while maintaining education quality and equity-related aims
seems inextricably linked to questions of education finance.
This volume is the third in a series of publications that seeks to analyse the
education indicators developed through the OECD/UNESCO World Education
Indicators (WEI) programme. The volume examines both the investments and returns
to education and human capital. It begins by looking at the results of a
specially commissioned study of the impact of human capital on economic growth
in WEI countries which shows new findings relative to those found in studies of
OECD Member states. It also sets out the context for trends in educational
attainment as well as current levels of educational participation and
expenditure in WEI countries. The report addresses the financing of education
systems by examining spending and investment strategies in WEI countries from
both public and private perspectives. It looks at the rationale for public
spending, how public resources are distributed across levels of education and
the role of the private sector both as a provider of educational services and a
source of educational expenditure. A national statistical profile that sets out
selected contextual and finance indicators against both OECD and WEI benchmarks,
together with a comprehensive statistical annex covering both WEI and OECD
countries, complements the analysis.
The countries participating in the OECD/UNESCO WEI programme are: Argentina,
Brazil, Chile, China, Egypt, India, Indonesia, Jamaica, Jordan, Malaysia,
Paraguay, Peru, the Philippines, the Russian Federation, Sri Lanka, Thailand,
Tunisia, Uruguay and Zimbabwe.
Executive Summary
Resumé
Press release
Investing in Education Pays Rich Dividends, UNESCO/OECD Study Confirms
Les dividendes de l'éducation sont considérables, confirme une étude UNESCO/OCDE
Subscribers and readers at subscribing institutions will be able to access the
online edition via SourceOECD, our online library.
Non-subscribers will be able to purchase the PDF e-book and/or paper copy via
our Online bookshop.
Journalists may obtain a copy of the report from the OECD Media Relations
Division.
Related documents: Teachers for Tomorrow's Schools - Analysis of the World
Education Indicators 2001 Edition (English)
Investing in Education: Analysis of the 1999 World Education Indicators
(English)
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