In addition, a large body of literature in macroeconomics has underscored that productivity spillovers are important determinants of economic growth and that an increase in collective human capital will have an effect on collective productivity which is as a results of an increase in an individual’s education on productivity as a result of the investment in education. (Moretti, 2005). Robert (1991) developed a human capital model which shows that education and the creation of human capital is responsible for both the differences in labour productivity and the differences in overall levels of technology that we observe in the world today. This, according to him, explains the spectacular growth in East Asia that has given education and human capital their current popularity in the field of economic growth and development. Countries such as Hong Kong, Korea, Singapore, and Taiwan have achieved unprecedented rates of economic growth while making large investments in education.
There is a novel societal axiom - the more educated one becomes, the higher one’s chances of being more successful in life. For many families acquiring education for their children is believed to be the foundation of helping them advance their socio-economic status (ref 1). In the western societies where the mean age keeps increasing, due to an ageing of population, the educational sector has received diminishing financial support from the government (reference 2 about the fact that education is becoming more expensive,). This implies that universities are losing the subsidies they once received, and have to respond by raising the tuition fees. Increased tuition fees for students suggest that the opportunity cost - what one must give up in
Kuznet Hypothesis is also called the Inverted U-Curve. This curve illustrates the behavior and relationship of the two variables in a developing economy. According to this hypothesis, as the economy develops or income per capita increases, economic inequality increases however, at one point, when inequality reaches its peak, it will start to decrease as economy further develops. For instance, in a developing economy, people who have the capital to invest their money have the opportunity to further expand their wealth if they invest the money. On the other hand, those people from rural area will move to the urban area to look for better paying job.
The attitude of demographers and economists about the role of population in economic development has undergone a dramatic change in recent years-from a pessimistic to an optimistic view. Earlier many scholars believed that rapid growth of population puts a constraint on faster growth by diverting resources from investment to consumption. The more recent view holds that the process of demographic transition resulting from a fast decline in mortality rates and a slower decline in birth rates creates a population bulge initially in the younger age group, but creates a window of opportunity later when the young join the work force. The demographic dividend hypothesis relies on the changes in the age structure of population leading to a rise in
One of the most cited articles in economic integration literature is that of Abdel Jaber (1971). According to this study, welfare impacts of economic integration arrangements among developing countries should incorporate employment, productivity, and income effects in addition to the production and consumption effects. Furthermore, a number of studies have argued that economic integration among developing countries should not be treated as a tariff issue but as an approach to economic development. For instance, Roberson (1970) argued that the theories of economic integration have merely focused on gains of better resource allocation, whereas economic development is concerned with the employment of idle resources and better deployment of under-utilized resources to stimulate faster long-run growth. Another worth mentioning study is that of Mikesell (1965).
The Solow Model theorizes the more your population grows and the more it is educated the workforce is, the more output your economy will produce i.e. GDP. What the Solow model fails to clarify is the type of education that is necessary for growth, the type of education would be dependent on the stage of development of the country. For example, after the economic crash of 2007 Ireland started to invest heavily in teriatry student as they need a highly educated workforce to capture foreign direct investment (IMF, 2017). In the Solow model human capital is treated much the same as physical capital in that if the workers are made more productive in their labour, because they are more educated, then the level of output will increase and living standards will rise.
First economic growth induces development of human resources where with increased economic activities families and individuals will likely increase their expenditure and this in turn leads to growth in human development. The second chain is that of increased consumption, health and education which also leads to economic growth. Thus, economic growth can result into generating additional resources for social services thereby leading to equitable distribution of social services across each community. The concept of economic growth can be explained based on three major concepts as identified by Anyanwu and Oaikhenan (1995) which include nominal value (economic growth), real value (economic growth) and per capita value. (economic growth).
It is one of the most important factors that act as a counterweight to social and economic mobility imposed by cultural and historical biases. Education is a vehicle of nation building through which a nation’s shared interpretation of history and cultural values are reproduced across generations. At the country level, education means strong economic growth due to productive and skilled labor force. At the individual level, education is strongly correlated to higher returns in earning and a more informed and aware existence. The emerging global scenario offers immense opportunities and challenges, and only those nations can benefit from it, which have acquired the required knowledge base and skills.
Human capital has been identified as a key stimulus of economic development. The theoretical models of economic growth have underscored the role of human capital. The empirical analysis of growth for a broad group of countries shows that the school attainment has positive effect on growth. It has been widely observed that increases in national output have been large compared with the increases of land, man-hours, and physical reproducible capital. Investment in human capital is probably the major explanation for this difference.
Work and Education in India Introduction: Work and Education in the Indian scenario provides for us to look into what can be in these spheres so that the country’s resources are best utilised. India, a developing nation which is growing towards having more than half of its population in the working age group should focus making the human resources more productive to maintain economic growth and balance. It is the role of Education when structured in bringing out efficiency could help in the work and economy of the nation. Demographic dividend is which means that the working age population of the nation say 15-64 years is higher than the non working age group of the population. This gives way for economic growth in the nation with more productive members actively taking part in contributing to the nation’s economic growth.