This paper provides a survey of work on the link between education and economic growth.It shows that data from the early 20th century are coherent with conclusions about educationand economic growth derived from the much more recent past. It also presents an analysis of the role of education in facilitating the use of best-practice technology.It is to be published in the
International Handbook on the Economics of Education
editedby G and J. Johnes and published by Edward Elgar.
There are two very basic reasons for expecting to
nd some link between education andeconomic growth. First of all at the most general level it is intuitively plausible thatliving standards have risen so much over the last millennium and in particular since 1800because of education. Progress of the sort enjoyed in Europe was not observed in theilliterate societies that have gradually merged into the world economy over the last twohundred years. To the most casual observer it must seem that there is a link betweenscienti
c advance and the way in which education has facilitated the development of knowledge. Of course the Curies and the Newtons of this world are few and far between.But people with only very limited education often
nd it di
cult to function at all inadvanced societies. Education is needed for people to bene
t from scienti
c advance aswell as to contribute to it.Secondly, at a more speci
c level, a wide range of econometric studies indicates thatthe incomes individuals can command depend on their level of education. If people witheducation earn more than those without, shouldn’t the same be true of countries? If not the rate of change of output per hour worked, at least the level of output per hourworked in a country, ought to depend on the educational attainment of the population.If spending on education delivers returns of some sort, in much the same way as spend-ing on
xed capital, then it is sensible to talk of investing in human capital, as thecounterpart to investing in
xed capital. The process of education can be analysed asan investment decision.
Some education has been available since ancient times. In England there is a fairly largenumber of schools which can trace their origins back to the days of Queen Elizabeth1