Questioning the Link Between Education and Economic Growth


An educated population leads to economic growth. You've heard that. You probably believe it. I know I believe it. The idea makes sense, particularly in a world of knowledge workers that increasingly relies on creativity and innovation for economic progress. Now a researcher is questioning the idea. In a paper entitled "Student Achievement and National Economic Growth, Francisco Ramirez and his co-authors suggest that these relationship between these two issues is one of correlation, not causation.

We find that countries with high science and mathematics achievement scores tend to grow somewhat more rapidly than other countries. This finding is consistent with the main inference reported in Hanushek and Kimko (2000) and very much in line with mainstream educational policy discourse in the United States. But we further find that this effect is reduced when the four Asian Tigers, with high growth and high scores during the period, are removed from the analysis. Moreover, the effect weakens in the recent period, when a number of Asian countries went into a slow-growth phase for reasons unrelated to matters of educational achievement. The special status of the Asian Tigers, and the additional finding that the apparent achievement effect decreases (rather than increases, as we expect) with the increased level of educational enrollments in a country, suggests that the overall effect may not be a causal one. Perhaps regimes making a push for development can also make a push for disciplined student achievements in areas such as science and mathematics, which less pressured students might choose to avoid. From this perspective, achievement and development are outcomes of a regime but not really causally related to each other.

This is an important idea because, if it is true, then perhaps the focus of government should be less on education and more on whatever it is that drives people to seek education independently.

  • “…perhaps the focus of government should be less on education…”

    I don’t think our government could focus any less on education. Sure, they all clamor about teachers’ wages at election time, but much of that steam vaporizes during tenure.

    Who knows, maybe the congressional shift will put more / different focus on education. All I know is, whenever I see one of those 20/20 programs that compares American students to other countries … I become more a fan of home schooling!

    Great post. Thanks Rob.


  • DS

    I didn’t know the government was ever focused on “educating” as opposed to “training”. Check out these two interesting articles: /