What role does education play in a country’s economic development?

Have you ever wondered yourself if education makes a difference in the development of a country’s economy?

” Is it possible, however, for a country’s economic progress to be dependent solely on education?

Well, the answer has always been in the data, figures, and instances of one country’s achievements, economic goals, and milestones. World’s economy and global economic growth directly or indirectly depends on the education.

The competition between technology and education as labour markets react to automation is among the causes for the shift in the outcomes structure. Workers’ competitiveness in this new environment is hampered by the poor effectiveness of education institutions in the majority of developing countries. For many, technological progress and global competition need the mastering of competences and the learning of new talents.

On the other hand, as the labor pool expands, wage rates are under pressure to fall. Wages typically fall when employers’ demand for labor does not keep pace with worker supply.

In an interview with Best financial publication World Economic Magazine, Kehkashan Basu, founder of the Green Hope Foundation, stated that simply providing opportunities will not help the youth find work. She added, “We do not do charity – instead, we provide communities with the tools and skillsets that reduce their vulnerability, thereby ensuring that they no longer need charity.”

An oversupply of workers is especially destructive to workers in businesses with minimal barriers to entry for new employees, i.e. occupations that do not require a degree or any specialized training. Industries that need more knowledge and training, on the other hand, tend to pay their employees more. The higher compensation is owing to a limited labor supply capable of operating in certain sectors, as well as the large costs of necessary training and education.

Why should education be prioritized

Education is one of the most important growth variables in every way. Education broadens both individuals’ and the world’s knowledge. It enhances their quality of life and brings countless social advantages to individuals and society. Education increases productivity and creativity while also boosting entrepreneurship and technical advancement. It also plays an important role in ensuring financial and social progress and enhancing revenue distribution.

Successful educational institutions begin training children at a young age, actively develop, and utilize data to track growth and responsibility. High-stakes evaluations and knowledge for accountability are both useful; but, low-risk evaluations are also effective.

Impact of Knowledge on the Economy

A robust economy appears to have a workforce capable of running industries at a level that offers it a competitiveness over economies in other countries. To build a more competent workforce, countries may experiment with incentivizing training through tax incentives, sponsoring training facilities, or a variety of other approaches. While a country’s economy is unlikely to have a competitive advantage in all areas, it can concentrate on a few that can be taught more easily.

The discrepancy in skill requirements between developed and developing countries has a substantial impact. While other factors such as geography and resource availability are important, having well-trained employees has a beneficial economic impact.

Various countries have stepped up their efforts to build an educational system that produces people qualified to work in emerging disciplines like science and technology. This appears to be due in part to the fact that older industries in industrialized countries are becoming less competitive, reducing their chances of dominating the corporate environment in the future. With a rising understanding that everyone has the right to an education, a movement to enhance the nation’s basic education has emerged.

It’s essential to concentrate on outcomes

Education institutions that do a good job of preparing pupils from a young age, reforming on a regular basis, and using data for progress and accountability are successful. High-stakes tests and information for responsibility are both beneficial; but, low-stakes evaluations are also effective. In either situation, test-based accountability is cost-effective as per World Bank.

According to Hoxby’s analysis of national statistics from the United States, a 10% drop in class size (which generally equates to an average of 2 fewer children per class) implies a $615 rise in per-pupil expenditure. As a consequence, class size reduction might cost 12,399 % more than the current average price of an accountability system. Similarly, a 10% wage raise for teachers would cost the average American school $437 per pupil, or 8,810 % more than the average evaluation expense.

Emphasize the possibilities while maintaining a focus on equity

Countries must improve quality, strive for excellence, and generate additional chances on the basis of efficiency and equity. This includes ensuring that underserved adolescents may enroll and succeed.

Education often does not lead to larger earnings for all employees in the United States. Per the Economic Policy Institute, Black employees confront considerable and increasing wage disparities, with Black males earning only 71 cents and Black women earning only 64 cents for every $1 earned by White men. So, equality is the key to achieve the bigger goal.

These disparities exist at all occupational levels, from low to high-paying, but they are particularly obvious in high-paying industries due to the lack of Black workers in those fields. Disparities persist at all levels of education: Black workers with high school, college, and advanced degrees earn 81.7 %, 77.5 %, and 82.4 % of what White workers with the same degree earn, respectively. Furthermore, the unemployment rate among Black bachelor’s degree holders is comparable to that of White workers without a college degree.

Finally, education is one of the most effective tools for eliminating poverty and inequality, as well as laying the groundwork for long-term economic progress. Let’s start putting more money into it. People’s access to modern and scientific ideas improves as a result of education. It improves people’s efficiency and their ability to handle new technology. It raises knowledge of potential chances and economic mobility.

Individuals can develop knowledge, skills, and attitudes through education that will enable them to appreciate societal and technological developments. Opportunities are getting created after the pandemic. In February, as mentioned in many business news magazines, there were 11.27 million new job vacancies, a little decrease from January. With the number of unemployed people falling to 6.27 million, there are now a record 5 million more job opportunities than qualified people. There were 1.8 available jobs for every individual who was unemployed.