| The relationship between formal
education and economic growth in poor countries is widely misunderstood by
economists and politicians alike. Progress in both areas is undoubtedly
necessary for the social, political and intellectual development of these and
all other societies; however, the conventional view that education should be one
of the very highest priorities for promoting rapid economic development in poor
countries is wrong. We are fortunate that it is, because building new
educational systems there and putting enough people through them to improve
economic performance would require two or three generations. The findings of a
research institution have consistently shown that workers in all countries can
be trained on the job to achieve radically higher productivity and, as a result,
radically higher standards of living. Ironically, the first evidence for this ides appeared in the United States. Not long ago, with the country entering a recession and Japan at its pre-bubble peak, the U.S. workforce was derided as poorly educated and one of the primary causes of the poor U.S. economic performance. Japan was, and remains, the global leader in automotive-assembly productivity. Yet the research revealed that the U.S. factories of Honda, Nissan, and Toyota achieved about 95 percent of the productivity of their Japanese counterparts—a result of the training that U.S. workers received on the job. More recently, while examining housing construction, the researchers discovered that illiterate, non-English-speaking Mexican workers in Houston, Texas, consistently met best-practice labor productivity standards despite the complexity of the building industry's work. What is the real relationship between education and economic development? We have to suspect that continuing economic growth promotes the development of education even when governments don't force it. Alter all, that's how education got started. When our ancestors were hunters and gatherers 10,000 years ago, they didn't have time to wonder much about anything besides finding food. Only when humanity began to get its food in a more productive way was there time for other things. As education improved, humanity's productivity potential increased as well. When the competitive environment pushed our ancestors to achieve that potential, they could in turn afford more education. This increasingly high level of education is probably a necessary, but not a sufficient, condition for the complex political systems required by advanced economic performance. Thus poor countries might not be able to escape their poverty traps without political changes that may be possible only with broader formal education. A lack of formal education, however, doesn't constrain the ability of the developing world's workforce to substantially improve productivity for the foreseeable future. On the contrary, constraints on improving productivity explain why education isn't developing more quickly there than it is. |