Growth in Years of Education Didn't Seem to Equal Economic Growth

Garrett Jones at the Econlog blog reports that from 1960-2000, there is no evidence that increasing growth in years people spend in formal education has any measurable effect on economic growth--in fact there seems to be a slight decrease in growth associated with growth in education years.

But what of the grand investment in "human capital" associated with education we hear so much about? No evidence it exists on the national level in a way that is expressed in national economic growth. (The personal advantages in sitting in school all day are a different matter, one you should decide for yourself on your own dime.)

As Jones writes:

Some might look at these results and say, "Higher education actually is great for entire countries, but these studies just couldn't discern that greatness. After all, correlation isn't causation." 

But that claim creates its own puzzle: If raising education really is so fantastic for countries, why can't we find nation-level evidence of that?  We can easily find evidence that switching to faster money growth usually predicts higher inflation, that switching to more market-oriented institutions predicts faster economic growth.  The correlations show up just fine there--so why is data-torturing required when countries switch to pro-education policies?  

And if defenders of increased education want to claim that "We just need to do it right next time" then defenders of sound social science need to retort: "Then I'm sure you'll understand if we absolutely insist on solid, experimentally sound evidence, along with proof of scalability, before we sign off on a nationwide program that will cost a couple of percent of GDP."  

In a world of opportunity cost, "Let's give it a try: It can't hurt" should be a punchline.  

I blogged earlier this month on the lie of American education being starved of funding, and in 2009 about lack of correlation between education spending and even educational achievement, much less economic growth.

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  • Killazontherun||

    That's one leg clipped out from under the standard social democratic narrative. Though don't look for either party to back down on their 'love for teachers.'

    Just in a few minutes ago. Incredible pic of Manhattan flooding:

    http://1.bp.blogspot.com/-d06L.....951349.jpg

    All you assholes stay safe.

  • SIV||

    Everyone in the path of the worst hurricane ever to strike planet Earth in the entire history of mammals is an HERO.
    We salute your courage.

  • Pound. Head. On. Desk.||

    Nice! I'm so glad this one is just brushing us. We've had almost a foot of rain where we are on the Chesapeake. A lot of our roads are flooded, but not like that!

  • ||

    Holy shit, I've seen flooding in Manhattan in person and that is way more than anything I'd ever seen.

  • Pro Libertate||

    Pure, cleansing water.

  • ||

    The subways are not going to be usable for days if not longer. It's going to be like the MTA strike all over again.

  • Killazontherun||

  • ||

    That is a fucking hugely critical station. Holy shit. I never lost power when I lived there, not even on 9-11.

  • Killazontherun||

    Update III: You got an earthquake coming if you haven't felt it yet in Seattle, Episeiarch.

  • Killazontherun||

    forgive that extra 'e' I cut out another word and left a letter.

  • Killazontherun||

    That other word was 'babe', of course.

  • Killazontherun||

    Hey, is that view from Castle Clinton? Just don't open the door to the upper ground, or the quartermaster at HQ gets pissy.

  • The Immaculate Trouser||

    The notion that we'd be out of this recession if we'd hired more teachers is aggressively stupid. The US already has one of the highest per-capita amounts of spending per pupil in the world, as well as perhaps the most educated population when one considers that we have universal high school instead of the two-track European system and the high rates of university attendance in the States.

    We are allocating enough to human capital; what we're not doing is employing those resources wisely. Among other things (SLD applies), diverting resources to vocational education, voucherizing K-12 education, moving towards a two-track educataional system, and siphoning out funding from worthless degrees (pretty much anything that ends in "Studies" would be a good start) to worthwhile ones in the sciences and humanities would be much better long-term than hiring a few teachers (which is worthless both long- and short-term).

  • SIV||

    (SLD applies)

    As your comment is on education I first read this as "Specific Learning Disability".

  • The Derider||

    Me too.

  • ||

    Hey joe, we're still waiting to know why you're so fucking stupid that you thought a quote from a woman was a rape joke. We're waiting, short stuff!

  • Pro Libertate||

    Used to mean "slow and learning disabled."

  • SIV||

    They changed it by 1969 when I was in first grade. I don't know if it was supposed to remove stigma because we 6-7 y/os mercilessly taunted those who had to attend what we called "LSD class".
    Often adding they had to go there because their mom took LSD when she was pregnant.

  • Pro Libertate||

    I'm nowhere near old enough for that. I substituted a bit just before law school, and I got stuck teaching the Slow and Learning Disabled class a few times. I suppose that may have been an informal designation, with the official name being something else.

  • Calidissident||

    Yeah, the cult of education has gotten out of hand. There are plenty of examples that increasing education spending doesn't equal results, and that having an educated population doesn't ensure prosperity. In addition the US example, where we've increased education spending immensely in recent years, with no change in educational achievement, and our economy has declined, Argentina is a great example. I went there in May on a trip through my university. The people there are very well-educated and cultured. Education through college is free. They could be called a first world population living in a second world country. And at one time (around 1930), their per capita GDP was among the highest in the world. Populism took hold of the country, and they've been an economic basket case ever since. And that was apparent when talking with business leaders (I'm a business major, so most of the daytime during the trip consisted of visiting local businesses) that the government is a major burden on local businesses, and concern over what they'll do in the future is a major factor affecting decision-making

  • SIV||

    Say what you will about Pol Pot but there are things we can learn from his education policy.

  • The Derider||

    From the comments there, this makes sense to me:

    "We find that increases in physical and human capital lead to output growth only in countries with good institutions. In countries with bad institutions, increases in capital lead to negative growth rates because additions to the capital stock tend to be employed in rent-seeking and other socially unproductive activities."

    Institutions meaning things like courts and police, and "bad" meaning corrupt.

  • Red Rocks Rockin||

    It's not like academia or any other bureaucracy (public or private, for that matter) are any less susceptible to corruption and rent-seeking. There's simply fewer instances of murdered housepets.

  • The Derider||

    The argument is this:
    Some countries are more resistant to corruption and rent-seeking than others. Let's say these countries have "good" institutions.

    Countries with "good" institutions realize economic benefits as education increases, as human capital is devoted to economically productive activities. Countries with "bad" institutions don't realize these benefits, because more schooling just makes better rent-seekers and corrupt officials.

  • ||

    Shut your midget whore mouth, joe, you pathetic fuck.

  • Red Rocks Rockin||

    Countries with "good" institutions realize economic benefits as education increases, as human capital is devoted to economically productive activities. Countries with "bad" institutions don't realize these benefits, because more schooling just makes better rent-seekers and corrupt officials.

    That doesn't change the fact that the latter typically evolves from the former once the limits of human scale kick in, with bloat and decadence calcifying whatever benefits the institutions formerly provided, leading to ever greater and increasingly fruitless efforts to implement various panaceas.

  • ||

    Hey joe, why don't you tell me how you were stupid enough to have never heard the "lie back and think of England" quote before? And then, as if that wasn't idiotic enough, you thought it was about rape. Do you ever get embarrassed by how breathtakingly stupid you are, joe?

  • Red Rocks Rockin||

    there is no evidence that increasing growth in years people spend in formal education has any measurable effect on economic growth--in fact there seems to be a slight decrease in growth associated with growth in education years.

    I'm stunned--stunned!!--that more people remaining out of the workforce for longer periods of time would contribute a lower aggregate economic growth rate.

  • Fist of Etiquette||

    The pieces are being moved around the chessboard but the outcomes just don't seem to be as planned. It's very frustrating.

  • Pro Libertate||

    But we offered the world ORDER!

  • AdamJ||

    Not that surprising. It seems to me that the standards for college entrance and graduation continue to decline in order to move more dolts through while gladly accepting their money.

    Of course, this coincides with long periods of awful monetary policy, which could be the reason for the stagnation.

  • Heroic Mulatto||

    It seems to me that the standards for college entrance and graduation continue to decline in order to move more dolts through while gladly accepting their money.

    Seeing things from the inside, that's exactly what's going on.

  • Killazontherun||

    Krugman is okay, you can all relax.

    OK, power line down across our driveway; the tree that took it down also took down our Fios connection to the outside world. I’m blogging using my iPad as a hot spot, but linkage may be iffy — we’re sort of in the Bermuda triangle of cell access, and at the moment I have only one bar.

    But we do have a generator! So no worries, just nuisance.

    I'm sure he is thrilled with all the economic opportunities those broken windows

  • Killazontherun||

    create.

    There is a button on this keyboard that I loath.

  • AdamJ||

    +1. A coworker and I have a poll going for how long it takes for Krugs to tout the benefits of deaths and destruction. I'd say tomorrow's editorial.

  • Pro Libertate||

    I'm surprised someone doesn't regularly break Krugman's windows.

  • SIV||

    Do you know who else broke windows?

  • LTC(ret) John||

    Dennis the Menace?

  • Farthomas||

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