Why is education is important in developing countries?

Education is obviously important, but it is hard to argue that it is the most important. Many countries have had large increases in education in recent decades, but economic growth has not followed. For instance, Uganda’s educational attainment has nearly tripled (from 2 years of schooling to about 6 today), yet it is hard to see where education is really paying off. Youth unemployment is rampant. Many African countries have seen similar results even though near-universal primary education has been achieved.

 

I always ask people, “if you were a farmer, how would learning to read and write help you?” Of course, there would be some benefits, but they would be marginal benefits because they don’t directly relate to farming. Another way of asking this is how beneficial studying accounting would be if there are no accounting jobs available?

 

There is evidence that basic education helps once economic growth starts, BUT no prominent development economists argue that education alone leads to growth. In fact, educational attainment in England during the first decades of the Industrial Revolution went down. Meaning there was a negative relationship between education and growth. Why? People worked in factories, and people decided that education didn’t make sense given the available options. Education DID rise dramatically AFTER a couple of decades of economic growth.

 

China saw something similar. The entrepreneurial class in the 1980s was slightly more educated, but the masses were educated no more than the average African today. After growth started, the masses became far more educated. Not the other way around.

 

So, of course, education is important, but that is the wrong question. Is education the most important? Given that rises in education have not translated into gains for the people in developing countries, more effort needs to be focused on other areas.

 

To answer this question, I would like to break down the perspective to an elementary level, and we can then integrate that into a whole.

 

Let's consider a company XYZ. You work there, either because your dad worked there, so you got a job there because of that, or you worked hard, applied for a job, and got it. Now, once you are in the company, the HR department sends you to some training for a few months before working. Let's say some basic training on the company's working, its ethics, some training on using Excel Sheets, some training on how to handle crises, etc.

 

What does the company benefit from that?

 

The answer is that it improves the productivity, reliability, and most importantly, the company's value and lets it achieve the goals it has set for itself.

 

Similarly, a country functions like that. Every country has its own great visions of doing things, its targets of GDP, its goal of making the world a better or worse place. Every govt. Has its human resource development ministry (The bigger HR Department). This HR department aims to train its country’s new joiners by ensuring proper education so that children can be trained enough to be productive for the nation when they grow up. So, let's do great things for our country!