With the recession still fresh in our minds and questions about whether college is worth the cost, some may be wondering just how much schooling matters. If they go searching for answers, they may even find confusing claims like this: “at the global level, no relationship has been found between a more educated population and more rapid economic development.”
Finally, analyses by Eric Hanushek and Ludger Woessmann provide a compelling answer: seat time doesn’t matter, but knowledge does. They explain years of work in a new book, The Knowledge Capital of Nations: Education and the Economics of Growth. I’ll confess: I haven’t read it (so far, I’ve read a couple of their free papers, which Hanushek graciously makes easy to find). But I will read it—I’ve been hoping for this book since finding an early, and especially reader-friendly, analysis in the spring 2008 issue of Education Next.
For now, here’s the central claim, drawn from the book’s introduction:
The conclusion of the analysis we develop in this book is that Adam Smith was right: human capital, as we now call it, is extraordinarily important for a nation’s economic development. The significance of education, however, has been obscured by measurement issues. Time in school is a very bad measure of what is learned and of what skills are developed, particularly in an international context. With better measures, the fundamental importance of human capital becomes clear.
Although many factors enter into a nation’s economic growth, we conclude that the cognitive skills of the population are the most essential to long-run prosperity. These skills, which in the aggregate we call the “knowledge capital” of a nation, explain in large part the differences in long-run growth we have seen around the world in the past half century.
For those who have not yet been persuaded by the democracy– and cognition-based arguments for rigorous, knowledge-rich elementary and secondary education, perhaps this economic argument will win the day. Seat time is a waste of precious resources; building knowledge is a terrific investment.
Knowledge and the economy grow together (image courtesy of Shutterstock).