Policy makers, educationalists and others often argue, at at least assert, that education is important (or indeed essential) for economic growth. It is a claim that is often made in the Irish context. When we are regularly told that the fundamentals of the Irish economy is strong, the highly educated workforce is invariably one of those fundamentals. If you work in education, as I do, it is a very appealing idea.
Does the evidence support it? Well like most important topics there is a fair bit of research accumulating. Casual empiricism is not helpful here. It would be tempting, but erroneous, to say “hey all rich countries have highly educated workforces so education must be essential”. After all, causality could go either way – or both. I don’t know offhand what the evidence shows for Ireland, if indeed there is any.
This paper takes a very long view, over about 700 years, to look at the case of England to suggest that human capital in the form of basic skills did not actually have an effect on GDP growth but that education levels did.
The Role of Human Capital in the Process of Economic Development: The Case of England, 1307-1900 A.M. de Pleijt
Macroeconomic growth models underline the importance of human capital in the process of economic development. This analysis introduces a new proxy for human capital, which is educational attainment, and examines cohesion between education levels and growth for England between 1307 and 1900. The empirical evidence suggests no significant result between basic skills, such as reading and writing abilities, and growth of per capita GDP. More progressive human capital levels, as measured by average years of higher education, seem to have contributed to the process of development until the mid-eighteenth century.
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Although interesting, I think that paper has a lot of problems (particularly with the data and methodology).
The historiography of Ireland is very interesting because in the 19th century Ireland was one of the world leaders in education. State funded primary education was founded in the 1830s, and in 1892, school attendance became compulsory for those aged between 6 and 14. So literacy rates were comparatively high in a worldwide context. Whether this translated into economic growth is certainly debatable. Furthermore, this change certainly did not yield a demographic transition, as some scholars maintain it should have.
My impression is that there should be some returns to basic skills in the pre-industrial world, although there is very little work on it. Perhaps I should do something! (I know some data that would allow me to test this)
Impression? Why, whats the evidence? Looking at growth over that period I guess is somewhat brave but I often marvel at the things that economic historians do – or get away with.
There doesn’t seem to be much evidence at all (micro not macro level). A good topic for further research no doubt, and I think this paper does a good job at forwarding this agenda.
Does literacy result in upward occupational mobility? I think of reasons why, but also some why not. Perhaps we might have some answers soon.