Economic Growth in Developing Countries: Education Proves Key

Policy Brief #03, August 2008. Recently published research carried out by IIASA in collaboration with the Vienna Institute of Demography (VID) of the Austrian Academy of Sciences proves that education is a fundamental determinant not only of health, demographic trends, and individual income, but also of a country’s aggregate level of economic growth. This gives policymakers a new perspective on international education goals.

Policy Brief # 3, cover

Policy Brief # 3, cover

Summary

  • New research proves the long held expectation that human capital formation (a population’s education and health status) plays a significant role in a country’s economic development. Better education leads not only to higher individual income but is also a necessary (although not always sufficient) precondition for long-term economic growth.
  • Investment in secondary education provides a clear boost to economic development, much more than can be achieved by universal primary education alone. Hence, the current focus of the United Nations Millennium Development Goals on universal primary education is important but insufficient. Universal primary education must be complemented with the goal of giving broad segments of the population at least a completed junior secondary education.
  • Only broad based secondary education and universal primary education is likely to give poor countries the human capital boost necessary to bring large segments of the population out of poverty. For more industrialized countries, tertiary education of younger adults also plays a key role in economic growth.
  • For international policymakers, more and better education should become the top priority because it empowers the people to help themselves and thus helps to improve governance and to reduce corruption. A concerted effort for much more primary and secondary education combining national and international forces would appear to be the most promising route out of poverty and toward sustainable development.

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Last edited: 11 April 2016

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