Beruflich Dokumente
Kultur Dokumente
on Economic Prosperity
Carlos Rymer
Research and Quantitative Methods
MPA-Environmental Science and Policy
Columbia University
May 2009
For most of the last half-century, governments have believed that by increasing
their expenditures on educational quantity (i.e. how much participation in
education they can achieve as a percentage of the population), they can ensure high
levels of economic growth. While some research on existing data has made the
connection for some countries, it does not fully explain the relationship. The
established consensus that policies designed to increase educational expenditures
fuel economic prosperity has left out the role that educational quality also plays in
producing citizens that can compete in a globalized, competitive world economy.
This study looked at data from 85 countries of mixed GDP levels to assess what
role educational quality plays on levels of economic prosperity. Regression analysis
shows that educational quantity by itself does not sufficiently explain economic
prosperity, while quantity combined with quality has a significant correlation to
economic prosperity, supporting the hypothesis that educational quantity by itself
is not enough to ensure that a country can develop economically.
Introduction
S
ince the emergence of sense, education expenditures are more
designing educational policies aimed at has largely been to ensure that students
the country’s well-being. In doing so, until they are ready to enter the labor
1
educational policies based on this they have the skills necessary to meet
high-value citizens who can add social analyzed the effect that educational
and economic value to a given country. quality also has on economic prosperity,
globalized world economy, it has period in which the world economy has
become more noticeable the idea that been much more globalized and
Citizens are no longer expected to see where much of it has been focused
simply complete school; increasingly, over the last decade. Then, statistical
they are expected to demonstrate that analyses are carried out to a) determine
2
the relationship of educational quantity was possible to determine whether or
Literature Review
T
here is a broad consensus at educational institutions is directly
add innovative and problem-solving economic growth. In turn, this has led
value to firms. In addition, the breadth various countries to adopt policies that
and depth of research and development increase the participation rate in higher
3
education as a way of increasing Nonetheless, recent research
refers to the preparation for life, into economic growth. This may be
civic participation, and the workplace, wages can also increase business costs
elements that can be associated with without providing much more output.
produce goods and services, but also across a country. As a result, a focus on
enhance society’s social capital (Winch, driven policy, can have significant
2002). In this sense, education is the negative effects on quality (Wolf, 2004).
means by which individuals in society In turn, this can lead to societal losses as
are better prepared to fuel improved resources are spent on keeping people
World Bank shows that while been strongly associated with economic
results, but they also show that it is between developed and developing
(Hanushek and Wobmann, 2007). The long term, this suggests that
study looked at countries with test governments must begin to focus more
5
The significance of educational educational policies. Today’s
world economy, can also be shown in train a workforce in diverse fields that
studies that relate literacy to health are foreign to less prosperous countries
education and diabetes control. In this with some developed countries, the
case, knowledge of key health terms led impact educational quality can have on
made it even more urgent for quality to results than simply school attainment.
T
his study looks at existing quantity and quality) and the dependent
85 countries. The data sets (Figure 2) variable with the dependent variable to
prosperity. Figure 1 below shows the performed using the combined effects of
the following:
Figure 1. Variable Predictors
Variable Measure
Educational quality plays a significant
Educational Government
Quantity Expenditures/GDP role in a nation’s economic prosperity.
Educational Teacher-Student Ratio
Quality This hypothesis is intended to
Economic GDP/Capita
Prosperity help fill the gap in information about
The data were analyzed using
educational quality and economic
linear regression to determine the
prosperity by reinforcing recent
strength of association between the two
research that attempted to answer the
independent variables (educational
same question using other data.
7
Results
independent variables graphed along the
T
he linear regression
dependent variable (see Appendix for
performed on these variables
other figures).
showed that for the 85
Figure 3. Education Spending Linear
countries chosen in this study, 1) Regression
educational quantity has a weak
1 00 0 00
7 50 0 0
GDP/Cap
0.153); 2) educational quality has a
5 00 0 0
relatively strong correlation with
GDP/Cap = 3073.66 * SpendingGDP
2 50 0 0
economic prosperity (r = 0.373), and 3)
0
2 .5 5 .0 7 .5 1 0.0 1 2.5
educational quantity and quality combine
Spending/GDP
1 00 0 00
quality and the combined effect of the
750 0 0
GDP/Ca p
500 0 0
T
he results reinforce
and participation, does in fact correlate
conclusions made from
with economic prosperity suggests that
recent research showing that
government educational expenditure as
educational quality plays a significant
percentage of GDP is not a good measure
role in achieving high economic
of educational quantity.
prosperity. While previous research
Nonetheless, the analysis
focused on test scores available in a
performed clearly shows that educational
handful of countries, this study focused
quality, as measured by the student-
on more universally available data to
teacher ratio, does strongly correlate with
further close the gap in statistical analysis
economic prosperity. Further research
showing the link between educational
should use better predictors of
quality and economic prosperity.
educational quantity to better assess its
The linear regression performed
effect on economic prosperity when
on the data suggest that educational
combined with measures of educational
quantity, measured by government
quality. Such research would help refine
educational expenditure as a percentage
these results and reinforce the tested
of GDP, is not a good predictor of
hypothesis.
economic prosperity. The fact that other
9
Conclusions
T
he consensus held by most
governments regarding
1. Educational quantity by itself
educational policy should
does not adequately predict
begin to change in the coming decades.
the effect that government
While it is true that increasing access to
educational policies have on
education is important and has been the
economic prosperity;
focus of many governments, it is not
2. Educational quality is a strong
enough to ensure that education plays a
and significant predictor of a
pivotal role in the economic development
nation’s economic prosperity;
of a nation.
and
New research now suggests that
3. Educational quality must be
there is enough evidence supporting the
considered as part of the
hypothesis that educational quality plays
package of government
a more significant role than educational
educational policies if the goal
quantity in promoting economic
is achieving high economic
development. The results of this prosperity.
10
References
and Health Outcomes? A Study of a Low-
Income Population with Diabetes. Public
Bernasek, Anna. 2005. What’s the Return
Health Reports 121: 245-254.
on Education? The New York Times.
December 11, 2005. Available at: Warrington, Molly. 2008. Decisions and
http://www.nytimes.com/2005/12/11/busi transitions: meeting the needs of the
ness/yourmoney/11view.html?_r=1&scp= ‘knowledge economy.’ Government and
7&sq=education%20and%20economic%20 Policy 26: 924-937.
growth&st=cse
Winch, Christopher. The Economic Aims of
Hanushek, Eric A. and Wobmann, Education. Journal of Philosophy of
Ludger. 2007. Education Quality and Education 36 (1): 101-117.
Economic Growth. World Bank.
Wolf, Alison. 2004. Education and
Hanushek, Eric A. and Wobmann, Economic Performance: Simplistic Theories
Ludger. 2007. The Role of School and Their Policy Consequences. Oxford
Improvement in Economic Development. Review of Economic Policy 20 (2): 315-
World Bank. 333.
Appendix
Figure 2. Original Data
Country Student-Teacher Ratio GDP/Cap Spending/GDP
Andorra 10.9 $43,504 1.7
Anguilla 12.5 $18,007 4.0
Armenia 8.7 $3,057 2.7
Aruba 14.2 $25,253 4.8
Austria 12.1 $44,652 5.4
Azerbaijan 8.4 $3,691 2.3
Barbados 15.9 $12,687 6.9
Belarus 8.9 $4,621 5.9
Belgium 10.0 $43,470 6.0
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Bermuda 7.0 $86,450 2.0
Bhutan 23.8 $1,982 7.0
Botswana 13.6 $5,739 9.7
Brazil 15.3 $6,852 4.5
British Virgin Islands 8.5 $51,273 3.1
Bulgaria 11.8 $5,178 4.5
Cameroon 16.2 $1,111 3.1
Cape Verde 23.1 $2,689 6.7
Cayman Islands 9.5 $57,222 2.8
Chad 34.2 $692 1.9
Chile 24.5 $9,854 3.4
Colombia 26.2 $3,648 4.8
Cuba 11.3 $4,641 9.8
Cyprus 11.1 $27,465 6.3
Czech Republic 9.7 $16,881 4.3
Dominican Republic 26.7 $4,202 3.6
El Salvador 27.6 $2,971 2.7
Eritrea 47.6 $271 5.3
Finland 14.5 $46,371 6.3
France 10.6 $40,090 5.7
Germany 15.0 $40,162 4.5
Ghana 21.5 $647 5.4
Greece 8.6 $28,111 3.5
Guyana 17.9 $1,435 8.1
Hungary 11.1 $13,777 5.5
Iceland 11.6 $62,033 7.6
Indonesia 11.1 $1,869 2.9
Iran, Islamic Republic of 18.8 $4,072 4.7
Israel 11.6 $23,383 6.3
Italy 10.8 $35,585 4.4
Jamaica 18.5 $4,147 5.3
Japan 12.0 $34,225 3.5
Kazakhstan 11.0 $6,753 2.3
Kenya 31.6 $786 7.3
Kuwait 9.7 $38,574 4.7
Kyrgyzstan 13.4 $704 4.9
Lao 26.5 $711 2.3
Lebanon 7.9 $6,011 2.6
Lesotho 26.6 $797 13.8
Lithuania 9.9 $118,040 5.0
Madagascar 21.6 $108,217 3.2
Mauritania 31.0 $18,227 2.3
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Mauritius 17.2 $874 4.4
Mexico 16.4 $5,846 5.5
Mozambique 24.9 $8,149 5.0
Netherlands 13.1 $2,217 5.2
New Zealand 14.4 $46,669 6.5
Oman 17.7 $15,546 3.5
Peru 16.7 $3,880 2.7
Philippines 33.1 $1,639 2.5
Poland 12.8 $11,008 5.5
Portugal 7.1 $20,990 5.4
Qatar 12.1 $75,978 3.3
Republic of Korea 16.9 $19,841 4.4
Republic of Moldova 13.7 $1,158 7.2
Romania 14.2 $7,523 3.5
Russian Federation 9.5 $9,050 3.8
Rwanda 26.3 $354 3.4
Saint Kitts and Nevis 9.9 $10,447 9.7
Saint Lucia 17.4 $5,810 5.5
St. Vincent and Grenadines 17.9 $4,660 8.0
Sao Tome and Principe 21.7 $912 5.1
Senegal 26.4 $908 3.9
Slovakia 13.3 $13,702 5.8
Slovenia 11.6 $22,936 5.3
South Africa 32.9 $5,826 4.2
Spain 10.2 $32,451 7.6
Swaziland 16.8 $2,520 7.1
Sweden 9.4 $49,873 3.5
Tajikistan 16.4 $555 4.2
Tunisia 17.2 $3,390 7.2
Ukraine 11.6 $3,055 6.1
United Arab Emirates 11.9 $43,709 1.4
United Kingdom 14.6 $45,549 5.5
United States 15.2 $45,047 5.3
Uruguay 16.9 $6,913 2.8
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Descriptive Statistics
Std.
N Minimum Maximum Mean Deviation
Statistic Statistic Statistic Statistic Std. Error Statistic
Teacher-Student Ratio 85 7.0 47.6 16.352 .8214 7.5725
GDP/Cap 85 271 118040 19432.65 2653.319 24462.389
Spending/GDP 85 1.4 13.8 4.916 .2283 2.1050
Valid N (listwise) 85
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a Predictors: (Constant), Teacher-Student Ratio
b Dependent Variable: GDP/Cap
Correlations
Teacher-
Student Ratio GDP/Cap Spending/GDP
Teacher-Student Ratio Pearson Correlation 1 -.373(**) -.008
Sig. (2-tailed) .000 .945
N 85 85 85
GDP/Cap Pearson Correlation -.373(**) 1 -.153
Sig. (2-tailed) .000 .162
N 85 85 85
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Spending/GDP Pearson Correlation -.008 -.153 1
Sig. (2-tailed) .945 .162
N 85 85 85
** Correlation is significant at the 0.01 level (2-tailed).
Correlations
Correlations
Teacher-
Control Variables GDP/Cap Student Ratio
Spending/GDP GDP/Cap Correlation 1.000 -.379
Significance (2-tailed) . .000
df 0 82
Teacher-Student Ratio Correlation -.379 1.000
Significance (2-tailed) .000 .
df 82 0
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