Transcription of Economic Returns to Investment in Education - World Bank
1 Economic Returns to Investment in EducationCHAPTER 2 The main conclusion of the previous chapter is that the MENA regionhas invested heavily in Education over the past few decades and as a con-sequence has improved the level, quantity, and quality of human question to be addressed in this chapter is what the developmentoutcomes of this Investment have been. In other words, have improve-ments in human capital contributed to Economic growth , better incomedistribution, and less poverty in MENA countries?The discussion is organized in three sections: the first covers the re-lationship between Education and Economic growth , the second ad-dresses the relationship between Education and income distribution, andthe third section examines the relationship between Education andpoverty.
2 In each section, we elaborate the arguments for the kind of re-lationship that should exist, explore whether that relationship holds inthe MENA region, and offer alternative explanations when it does and Economic GrowthPer capita Economic growth in the MENA region in the past 20 years hasbeen relatively low, in part because of high population growth rates, andin part because many MENA countries still depend on oil exports foreconomic growth and oil prices remained relatively low through the1980s, 1990s, and early 2000s. In addition, the region generally lacks sig-nificant dynamic sectors that can compete internationally and is home tolarge informal labor markets, mainly in low-level services.
3 These charac-teristics contrast sharply with East Asia and the more dynamiceconomies of Latin these conditions, we would not expect to see a strong relation-ship in the MENA region as a whole between Investment in human cap-ital especially Investment in secondary and tertiary Education and3902-Chap02-R1
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9 3940 The Road Not Traveledeconomic growth . This turns out to be the case. Thus, the MENA ex-perience brings home the idea that Investment in human capital does notby itself generate Economic growth . Earlier findings about virtuous circlesin East Asia claiming that high growth rates in that region were drivenby Investment in Education are not incorrect, they are just high levels of human capital in the 1960s and rapid increasessince then were undoubtedly important to East Asian growth .
10 In the caseof the MENA region, other growth -enhancing policies were not inplace, and this has led to less than full realization of the benefits of in-vestment in in Education and Economic growth :A Broad PerspectiveDoes Investment in Education necessari
