How Education Is Important For A Country?
Education is a human right, a powerful driver of development, and one of the strongest instruments for reducing poverty and improving health, gender equality, peace, and stability. It delivers large, consistent returns in terms of income, and is the most important factor to ensure equity and inclusion For individuals, education promotes employment, earnings, health, and poverty reduction.
- Globally, there is a,
- For societies, it drives long-term economic growth, spurs innovation, strengthens institutions, and fosters social cohesion.
- Developing countries have made tremendous progress in getting children into the classroom and more children worldwide are now in school.
- But learning is not guaranteed, as the (WDR) stressed.
Making smart and effective investments in people’s education is critical for developing the human capital that will end extreme poverty. At the core of this strategy is the need to tackle the learning crisis, put an end to, and help youth acquire the advanced cognitive, socioemotional, technical and digital skills they need to succeed in today’s world.
However, COVID-19 has wreaked havoc on the lives of young children, students, and youth. The disruption of societies and economies caused by the pandemic has aggravated the already existing global education crisis and impacting education in unprecedented ways. Among its many dramatic disruptions, the pandemic has led to the worst crisis in education of the last century.
Globally, between February 2020 and February 2022, education systems were fully closed for in-person learning for, In South Asia and Latin America & the Caribbean, closures lasted 273 and 225 days, respectively. Even before the COVID-19 pandemic, this global learning crisis was stark.
- The, created by the World Bank and UNESCO Institute of Statistics and launched in 2019, gives a simple but sobering measure of the magnitude of this learning crisis: the proportion of 10-year-old children that are unable to read and understand a short age-appropriate text.
- In low- and middle-income countries, the share of children living in – already 57% before the pandemic – could potentially reach given the long school closures and the wide digital divide that hindered the effectiveness of remote learning during school closures, putting the targets in jeopardy.
School children have lost an estimated – and counting – of in-person instruction since the onset of the COVID-19 pandemic and subsequent lockdowns. Children and youth in most countries have suffered major learning losses during the pandemic. Rigorous empirical evidence from various countries, including low-, middle-, and high-income contexts across regions, reveals very steep losses.
Each month of school closures led to a full month of lost learning, reflecting the limited effectiveness (on average) of remote learning. The staggering effects of school closures reach beyond learning. This generation of children could lose a combined total of in present value or the equivalent of 17% of today’s global GDP – a sharp rise from the 2021 estimate of a US$17 trillion loss.
COVID-19 created an inequality catastrophe. Almost all countries provided some form of remote education during school closures, but there was high inequality in access and uptake between and within countries. Children from disadvantaged households were less likely to benefit from remote learning than their peers, often due to a lack of electricity, connectivity, devices, and caregiver support.
- Girls, students with disabilities, and the youngest children also faced significant barriers to engaging in remote learning.
- Overall, at least a of the world’s schoolchildren – 463 million globally – were unable to access remote learning during school closures.
- Additionally, children’s mental health has been negatively affected, while risks of violence, child marriage and child labor are also increasing.
The situation is more dire for girls, who are more vulnerable to violence, child marriage, and becoming pregnant. Vulnerable groups such as children with disabilities, ethnic minorities, refugees, and displaced populations are also less likely to return to school post-crisis.
- School disruptions particularly affected the youngest children.
- Early childhood education was closed the longest in many countries, with limited or no support for remote learning.
- In addition to learning losses, schooling disruptions have also exacerbated disparities in nutrition, health and stimulation, and access to essential social protection and psychosocial services.
Millions more children have been put at risk of being pushed into child labor, early marriage, and of leaving school altogether. Adding to these challenges is the negative impact of the unprecedented global economic contraction on family incomes, which increases the risk of school dropouts, and results in the contraction of government budgets and strains on public education spending.
Youth have also suffered a loss in human capital in terms of both skills and jobs. In many countries, these declines in youth employment were more than twice as large as the declines in adult employment. As a result, this generation of students, and especially the more disadvantaged, may never achieve their full education and earnings potential.
Action is urgently needed now – business as usual will not suffice to heal the scars of the pandemic and will not accelerate progress enough to meet the ambitions of SDG 4. We are urging governments to implement ambitious and aggressive Learning Recovery Programs to get children back to school, recover lost learning, and accelerate progress by building better, more equitable and resilient education systems.
- Last Updated: Oct 11, 2022 The World Bank’s global education strategy is focused on ensuring learning happens – for everyone, everywhere.
- Our vision is to ensure that everyone can achieve her or his full potential with access to a quality education and lifelong learning.
- We envision a world in which all countries prepare all their children and youth to succeed as citizens and have the tools to participate in their country’s development.
By 2030, our target is to halve – the share of 10-year-old children around the world who cannot read and understand a simple text. We are working toward the target by helping countries build foundational skills like literacy, numeracy, and socioemotional skills – the building blocks for all other learning.
Throughout all education levels – from early childhood to tertiary education and beyond – we help children and youth acquire the skills they need to thrive in school, the labor market and throughout their lives. We work directly with governments, providing technical assistance, loans, and grants. We help countries share and apply innovative solutions to education challenges, focusing on systemic reform throughout the education cycle – from early childhood through tertiary education and lifelong learning.
We do this by generating and disseminating evidence, ensuring alignment with policymaking processes, and bridging the gap between research and practice. The World Bank is the largest external financier of education in the developing world. The Education Global Practice has a portfolio of 178 projects providing a total financing of US$23.6 billion.
In the last three fiscal years (FY 20-22), the World Bank’s new commitments averaged almost US$5 billion per year in projects designed to improve learning and provide children and youth with the education they need to succeed. Our current portfolio of education projects totals US$23.6 billion including IBRD, IDA and Recipient-Executed Trust Funds.
IDA operations comprise about 60% of the education portfolio. This latest fiscal year, the World Bank also continued to be the largest implementing agency of Global Partnership for Education (GPE) grants to low-income countries. In addition to its portfolio, The World Bank currently manages 55% of GPE’s total grant portfolio (US$1.98 billion of US$3.60 billion in active grants).
World Bank-supported projects in education are currently reaching at least 432 million students and 18 million teachers – one-third of the student population and nearly a quarter of the teacher workforce in current client countries. Strategic Approach to Education Our is that learning should happen with joy, purpose, and rigor for everyone, everywhere.
This vision should guide today’s investments and policy reforms so that countries can lay the foundations for effective, equitable, and resilient education systems. To guide our policy advisory and operational support to countries, we focus on policy actions that are needed to accelerate learning and that characterize the way many successful systems operate.
- Learners are prepared and motivated to learn;
- Teachers at all levels are effective and valued;
- Classrooms are equipped for learning;
- Schools are safe and inclusive spaces; and
- Education systems are well managed.
- We pursue systemic reform supported by political commitment to learning for all children. Education services from to primary, secondary education, and beyond to and other tertiary education, need to be aligned and consistent. Thus, we take an integrated approach to the education system to ensure learning throughout the life cycle.
- We focus on equity and inclusion through a progressive path toward achieving universal access to quality education. Realizing true universal access requires equality of opportunity. We must meet the educational needs of, those in marginalized and rural communities,, displaced populations,, and other vulnerable groups. Our approach is inclusive and focused. We understand the needs of governments and work with them to ensure that education works for everyone.
- We focus on results and use evidence to keep improving policy by using metrics to guide improvements, are critical to identifying regions and schools that are achieving results, recognizing good practices, and learning what works. We invest in developing global public goods such as the to measure the key drivers of learning outcomes in basic education in a cost-effective manner (building on,, and ) and work with countries to improve their data systems.
- We want to ensure financial commitment commensurate with what is needed to provide basic services to all. As in the case of all other public resources,, We want to strengthen financing tied to results. Funds need to be appropriately directed and spent smartly across regions and schools, using data and evidence of how processes are being followed and the impact of interventions to guide improvements. Nearly 40% of our operations use some results-based financing schemes.
- We invest wisely in technology so that education systems embrace and learn to harness technology to support their learning objectives. The use of EdTech should be guided by : a clear purpose and focus on educational objectives; reaching all learners; empowering teachers; engaging an ecosystem of partners; and rigorously and routinely using data to learn what strategies, policies, and programs are effective to maximize student learning.
Tackling the Global Learning Crisis and the COVID-19 Pandemic Even before COVID-19, the world was facing a learning and skills crisis. COVID-19 has deepened this crisis. School closures have led to huge learning losses, and without urgent policy action, today’s students could lose 10% of their future average annual earnings.
Beyond reduced incomes, learning losses will lead to lower productivity, greater inequality, and increased risks of social unrest for decades to come. These trends can be reversed if countries act quickly, decisively, and with adequate resources, guided by evidence on what works. The, ramping up its support to countries through a variety of different channels and on different priority interventions.
Our is not just responding to the crisis, but is building forward better so that systems use this window of opportunity to shape more resilient systems that are better prepared to cope with future shocks, as well as more equitable systems that ensure opportunities for all.
- The predicted increase in Learning Poverty is a simulation, not a forecast. Learning losses can be minimized if urgent action is taken now.
- Country challenges vary, but there is a menu of options to build forward better, more resilient, and equitable education systems.
- Countries are facing an education crisis that requires a two-pronged approach: first, confronting the emergency and supporting an urgent return to at least semi-presential school activities and actions to recover lost time through remedial and accelerated learning; and, second, building on these investments for a more equitable, resilient, and effective system.
- Given the scale of the challenges and the competition for funding, countries will need to concentrate their efforts on the most pressing priorities and most cost-effective approaches to lessen learning poverty. Fortunately, there are evidence-based interventions that they can draw on.
- The framework for learning recovery can provide this approach. Its five elements are focused on ensuring that all children and youth are in school and building the foundational skills that they will need for success in school and beyond:
- R each every child and keep them in school
- A ssess learning levels regularly
- P rioritize teaching the fundamentals
- I ncrease the efficiency of instruction including through catch-up learning
- D evelop psychosocial health and well-being
- Without prompt action, there is a serious risk that the learning losses suffered over the past two years could become permanent. But countries that adopt these five elements – tailored to their own contexts – can quickly make up the losses.
- can be a powerful tool to implement these actions by supporting teachers, children, principals, and parents; expanding accessible digital learning platforms, including radio/TV/Online learning resources (which is here to stay); and using data to identify and help at-risk children, personalize learning, and improve service delivery.
Looking ahead We must seize this opportunity to reimagine education in bold ways. The World Bank is committed to supporting countries during these challenging times. Together, we can build forward better more equitable, effective, and resilient education systems for the world’s children and youth. We not only owe it to them – in their minds rest our future.
- Global Initiatives
- At the global level, the World Bank promotes cross-regional and cross-sectoral knowledge; fosters in-depth technical knowledge and teams of experts through Global Solutions Groups and Thematic Groups; and incubates ideas, programs, and partnerships – including with multilateral, bilateral, foundations and with civil society organizations (CSOs) – in strategic areas of knowledge, advisory, and operational support.
- Accelerating Improvements:
- Supporting countries in establishing time-bound learning targets and a focused education investment plan, outlining actions and investments geared to achieve these goals.
Launched in 2020, the works with a set of ‘Accelerator’ countries to channel investments in education and to learn from each other. The program coordinates efforts across partners to ensure that the countries in the program show improvements in foundational skills at scale over the next three to five years.
These investment plans build on the collective work of multiple partners, and leverage the latest evidence on what works, and how best to plan for implementation. Universalizing Foundational Literacy: Readying children for the future by supporting acquisition of foundational skills – the most fundamental of which is literacy – which are the gateway to other skills and subjects.
The includes near-term interventions of the education approach that successful countries have followed to help all children in classrooms become literate today. These include assuring political and technical commitment to making all children literate; ensuring effective literacy instruction by supporting teachers; providing quality, age-appropriate books; teaching children first in the language they speak and understand best; and fostering children’s oral language abilities and love of books and reading.
- Strengthening Measurement Systems:
- Enabling countries to gather and evaluate information on learning and its drivers more efficiently and effectively.
- The World Bank supports initiatives to help countries effectively build and strengthen their measurement systems to facilitate evidence-based decision-making. Examples of this work include:
(1) The : developed by the World Bank’s Education Global Practice, can help countries reduce Learning Poverty. This tool offers a strong basis for identifying priorities for investment and policy reforms that are suited to each country context by focusing on the three dimensions of practices, policies, and politics. GEPD:
- Highlights gaps between what the evidence suggests is effective in promoting learning and what is happening in practice in each system;
- Allows governments to track progress as they act to close the gaps.
The GEPD has been implemented in seven education systems – Ethiopia, Jordan, Madagascar, Niger, Peru, Sierra Leone and Rwanda – and preparation is ongoing in eight more countries with expected completion by the end of 2024. (2) : a one-stop shop for knowledge, capacity-building tools, support for policy dialogue, and technical staff expertise to aid those working toward better assessment for better learning.
LeAP is currently supported by the Russia Education Aid for Development (READ) Trust Fund program. Building & Synthesizing Evidence: Filling gaps on what works to improve learning and drawing out lessons to inform policy and implementation. : The GEEAP, co-convened by the World Bank, the UK’s Foreign, Commonwealth & Development Office, and UNICEF Office of Research-Innocenti, brings together a diverse group of leading researchers and practitioners to provide guidance for policymakers.
It is chaired by Professor Kwame Akyeampong of The Open University and Dr. Rukmini Banerji, CEO of Pratham.
- The first GEEAP report focused on cost-effective policies to improve education access and foundational learning;
- The second report offers guidance on how to reverse the devastating learning losses caused by the pandemic.
: In the past five years, the SIEF, a multi-donor trust fund focused on building evidence in the human development sectors, has supported 45 randomized control trials (with total funding of nearly US$20 million) that test out different approaches for improving education outcomes in low- and middle-income countries.
To ensure the findings make a difference, SIEF has also invested in disseminating this evidence and building capacity of government staff, local researchers, and local journalists to help them critically appraise education evidence. Supporting Successful Teachers: Helping systems develop the right selection, incentives, and support to the professional development of teachers.
The has two main instruments: global public goods that support the implementation of the key principles, and operations that accompany governments in implementing successful teacher policies. Currently, the World Bank Education Global Practice has over 100 active projects supporting over 18 million teachers worldwide, about a third of the teacher population in low- and middle-income countries.
- : A World Bank-developed classroom observation tool designed to capture the quality of teaching in low- and middle-income countries, which is available in 12 languages. Since Teach launched in 2019, it has been applied in 36 countries, reaching almost 200,000 students.
- : The World Bank’s program focused on accelerating student learning by improving in-service teacher professional development (TPD) around the world. While Teach helps identify teachers’ professional development needs, Coach leverages these insights to support teachers to improve their teaching.
- Supporting Education Finance Systems:
- Strengthening country financing systems to mobilize more resources and improve the equity and efficiency of sector spending.
- The aims to support the strengthening of country financing systems to mobilize more resources and improve the equity and efficiency of education spending, by bringing together various partners to work on the development of sustainable financing strategies, better public financial management and stronger data and monitoring systems for education financing.
- Our Work in Fragile, Conflict, and Violent (FCV) Contexts:
The massive and growing global challenge of having so many children living in conflict and violent situations requires a response at the same scale and scope. Our education engagement in the Fragility, Conflict and Violence (FCV) context, which stands at US$5.35 billion, has grown rapidly in recent years, reflecting the ever-increasing importance of the FCV agenda in education.
Indeed, these projects now account for more than 25% of the World Bank education portfolio of US$23.6 billion. As our support continues to grow to face the more numerous and longer-lasting crises (including those induced by climate emergencies), investments will be guided by our recent, The paper states that education is especially crucial to minimizing the effects of fragility and displacement on the welfare of youth and children in the short-term and preventing the emergence of violent conflict in the long-term.
It outlines our proposed way forward for keeping children safe and learning in these most difficult contexts, following the pillars of the, Last Updated: Oct 11, 2022 Support to Countries Throughout the Education Cycle Our support to countries covers the entire learning cycle, to help shape resilient, equitable, and inclusive education systems that ensure learning happens for everyone.
- In March 2022, the World Bank approved its first in the education sector globally, in support of an eight-year program that addresses key education challenges in West Bank and Gaza,
- With the approved US$20 million from an expected overall envelope of US$60 million, the “” Program (SERATAC, which means your life journey or pathway in Arabic) aims to improve education outcomes of primary and secondary students and increase student pathways leading to tertiary education.
The US$150 million Ghana ) project is supporting a series of interventions to address the impacts of the pandemic on education and accelerate learning, including: (1) Scaling targeted instruction: The project is supporting a remedial program that provides instruction aligned to student learning needs by grouping students by proficiency.
- The operation helped to train 70,000 teachers and produced new teaching and learning materials.
- 2) Self-guided learning: The program supported the distribution of pre-loaded tablets for self-guided learning for students with special education needs.
- 3) E-learning: The EdModo Ghana learning management system serves as a platform for distance and hybrid learning, and ongoing communication between students, parents, and teachers.
The US$500 million project is supporting efforts to improve education outcomes through decentralized planning and management, improved teacher capacity, and measures to address the impacts of the pandemic on learning. Improved classroom assessments: The project is supporting the use of tablet-enabled classroom assessments that allow for immediate access to learning gap data at a student- and school-level, and informing remedial programs.
- Teacher capacity: The project is strengthening needs-based teacher training, instituting teacher performance measures, and supporting DIKSHA, a platform that offers online training to more than 1.5 million registered teachers.
- In Colombia, a, approved in March 2022, will help improve pedagogical practices and the management of Colombia’s education sector to improve learning achievements and strengthen socio-emotional learning.
Coordination among teachers, principals, and local government representatives will be strengthened to improve the basic skills of the most vulnerable preschool and secondary-school students. Specifically, this loan will support programs that are key to guaranteeing a timely, effective post-pandemic response in education.
- These programs include actions for the effective use of learning assessments, improvements in pedagogical practices, optimization of school management practices, coordination between educational institutions and local governments, and the strengthening of the School Meal Program.
- The US$510 million has been supporting Bangladesh Ministry of Education provide quality education to 13 million students from grades 6-12 since December 2017.
Between 2018 and 2019, the program helped improve access through targeted stipends and helped generate across English, Math, and Bangla in Grades 6, 8, and 10 (for instance, Bangla reading proficiency increased by 10% among grade 8 students). It also helped deliver two rounds of National Assessments for tracking learning outcomes and supported system reforms in curriculum, grants management, and system monitoring.
When schools closed in March 2020 due to COVID-19, the TSER program, It provided two rounds of stipends and tuition fees to 2.5 million secondary students (900,000 boys and 1.6 million girls) aged 11-17 and generated, It provided data on the and undertook direct outreach to vulnerable students to encourage them to stay engaged in schooling.
This has helped improve adolescent engagement in learning and aspirations, especially for girls. The program has also provided online training to more than 1,600 secondary teachers leading to improvements in their knowledge, skills, and reduction in burnout.
The Bank’s Euro 143.8 million (US Dollar 160 million equivalent) loan to the Republic of Turkey is enhancing the capacity of the education system to provide e-learning equitably to school-age children during and following the COVID-19 pandemic and future shocks. The project consists of three components: 1) Emergency Connectivity and IT Infrastructure for Education in Emergencies, which finances the expansion of the country’s e-learning platform; 2) Digital Content for Safety and Quality, which finances goods, services, consultants, training and small refurbishments to support the distance education content; and 3) Institutional Capacity for Education Technology Resilience, which will strengthen capacity for the coordination, management, monitoring and evaluation of the Project and for the continued delivery of safe and equitable digital education services.
The project includes equity interventions for students most vulnerable to learning loss due to COVID-19 school closures. Activities to address gender-based distance education needs and risk mitigation are included, and its monitoring indicators are disaggregated by gender.
- In addition, it will increase the weekly use of the online distance education platform to almost 12 million K-12 students and provide certified on-line training to more than 900,000 teachers.
- In Lao PDR, in 2011-12, only 6% of 3-5-year-olds from the poorest quintile were on track in literacy and numeracy.
The IDA-funded (2014-2020), covering 32,000 3-5-year-olds in 22 target districts in Lao PDR, is changing this. As a result of the project, nearly 70% of children have benefitted from access to ECE programs in target villages, and nearly 82% teachers have benefited from training and feedback based upon classroom observations.
Evaluations suggest significant gains in student enrollment, nutritional outcomes and learning levels due to project interventions. The US$450, approved in 2021, is supporting critical interventions to boost access to quality early childhood development programs for rural populations, encompassing education, health, and nutrition services.
The project is creating and equipping preschools in select rural areas, with a target to enroll an additional 100,000 children in 6,000 new preschool units; over 4,100 preschool educators have already been recruited and trained on appropriate pedagogical practices; to promote stimulation and early learning during COVID-19 closures, a new TV program was broadcast to promote home-based playful learning.
The in Peru supported the government’s National Education Project 2021, which adopted a strategy to increase the quality and relevance of tertiary education by creating a higher education quality assurance system (HEQAS) providing an assurance framework across basic and higher education levels. The project provided support to 135 higher education institutions, of which 20 were from among the country’s 50 universities and 115 were from among the country’s 370 public institutes.
In 2013, just 5% of the poorest households in Uzbekistan had children enrolled in preschools. Thanks to the, by July 2019, around 100,000 children will have benefitted from the half-day program in 2,420 rural kindergartens, comprising around 49% of all preschool educational institutions, or over 90% of rural kindergartens in the country.
Since 2014, the has become synonymous with delivering quality and relevant post-graduate education that meets the demand for skills in priority fields. Between 2014 and 2020, the International Development Association (IDA) has invested over US$580 million to support more than 70 centers in 20 countries in West, Central, East, and Southern Africa.
This supported over 14,000 Masters and PhD students in agriculture, health, and other sciences. The program continues to expand across Sub-Saharan Africa, focusing on improving teaching and learning, expanding access, and ensuring sustainability. Last Updated: Oct 11, 2022 The Power of Partnerships In addition to working closely with governments in our client countries, the World Bank also works at the global, regional, and local levels with a range of technical partners, including foundations, non-profit organizations, bi-laterals, and other multilateral organizations.
These collaborations are funded by other strategic partners such as the Bill & Melinda Gates Foundation, UNICEF, and UNESCO. Some examples of our most recent global partnerships include: UNESCO, UNICEF, and the World Bank have joined forces to close the learning data gaps that still exist and that preclude many countries from monitoring the quality of their education systems and assessing if their students are learning.
The three organizations have agreed to a, a commitment to ensure that all countries, especially low-income countries, have at least one quality measure of learning by 2025, supporting coordinated efforts to strengthen national assessment systems. UNESCO Institute for Statistics (UIS): Aimed at measuring and urging attention to foundational literacy as a prerequisite to achieve SDG4, this partnership was launched in 2019 to help countries strengthen their learning assessment systems, better monitor what students are learning in internationally comparable ways and improve the breadth and quality of global data on education.
- Together, UIS and the World Bank launched the,
- FCDO and Bill & Melinda Gates Foundation: Supported by the UK government’s Foreign, Commonwealth & Development Office (FCDO), in partnership with the Bill & Melinda Gates Foundation, the EdTech Hub is aimed at improving the quality of ed-tech investments.
The Hub launched a rapid response Helpdesk service to provide just-in-time advisory support to 70 low- and middle-income countries planning education technology and remote learning initiatives.
- UNICEF, UNESCO, & GPE:
- Through a consortium with UNICEF and UNESCO, supported by the Global Partnership for Education (GPE), the World Bank is providing greater support to teachers for accelerated instruction; using EdTech to support continuity of learning; and getting reading, learning, and play materials into homes.
- Bringing together global funding to maximize results
The World Bank has launched two Trust Funds to streamline partner investments that support operations and amplify impact. The two funds will be complementary – covering lifelong learning. Beyond these two trust funds, the World Bank receives support through partner-specific trust funds.
The Foundational Learning Compact (FLC): A new umbrella trust fund designed to align partnerships, financing, and technical support around a few specific and measurable education outcome indicators, increasing Learning-Adjusted Years of Schooling (LAYS) (a metric which combines quantity and quality of schooling), and decreasing Learning Poverty.
The FLC’s scope covers Early Childhood (including the ), Primary Education, and Secondary Education. It is designed around three pillars (measurement, policy, and knowledge and implementation capacity-building) with an emphasis on cross-cutting themes (financing; fragility, conflict, and violence (FCV); gender; inclusion; and technology).
Tertiary Education & Skills Training (TES): A new umbrella trust fund that aims to strengthen the policy framework and increase system-wide and institutional capacity, to enable access to relevant, quality, and equitable higher education, formal Technical and Vocational Education and Training (TVET), and youth and adult learning, which are aligned to labor market, economic, and societal needs.
TES will help to align support for development of global public goods and co-financing of implementation grants around tertiary education and skills training of the current or imminent workforce. Last Updated: Oct 11, 2022 : Overview
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- 1 Why is education important to the future of our country?
- 2 How does education benefit the economy?
- 3 Can education make the world a better place?
Why is education important to the future of our country?
Education is a powerful agent of change, and improves health and livelihoods, contributes to social stability and drives long-term economic growth. Education is also essential to the success of every one of the 17 sustainable development goals, GPE helps partner countries transform their education systems to ensure that every girl and boy can get the quality education they need to unlock their full potential and contribute to building a better world.
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How does education benefit the economy?
The Relationship Between Education and Economic Growth – Decades of research confirm that increased investment in education leads to increased economic growth. This includes higher salaries for individuals, greater workforce effectiveness, and higher gross domestic product.
New jobsGross domestic productAnnual earningsAnnual spendingFederal tax revenue
A study from The Learning Agency teases out the relationship between education and economic growth one step further, examining the economic impact not just on high school graduation rates, but on the skill level of graduates. Their findings show that increases in math, reading, and writing skills correlate to significant increases in salaries.
What’s more, these higher-skilled workers are more effective in their jobs—leading to increased innovation and productivity, which benefits the economy as a whole. The positive correlation between education and economic growth continues to track beyond high school and into postsecondary outcomes. Two studies from the Brookings Institute illustrate this relationship.
First, a college degree in any major is crucial to increasing a person’s earning potential, Second, the economic gains of postsecondary education aren’t limited to individuals, The Brookings Institute found that the average bachelor’s degree holder contributes $278,000 more to local economies than the average high school graduate through direct spending over the course of their lifetime, and an associate degree holder contributes $81,000 more than a high school graduate.
High school graduation rates are highHigh school graduates possess career-ready skillsHigh school graduates go on to complete postsecondary education
Can education make the world a better place?
Active And Informed Citizens Make A Better World – We can only have positive impact when we know what the current status of the world and our community is. Although we may think that it is easier today to be well informed with so much accessible information, it can in fact be much more difficult.
- We must discriminate between what is actually truth or objective, and what has been communicated or filtered in a biased or different way.
- We need citizens to be well informed and active, rather than passive and they need to have the skills to determine objective truth.
- Education helps individuals become well informed and make good decisions.
It increases their chances of succeeding in life and it is important for building communities. These skills help people grow as productive members of society, delivering reduced crime rates, greater positive impact and greater harmony.
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Is education most important factor?
Schooling is the most element in the evolution of the nation. Some people across the world would think that money is an important factor, but it is wrong because without education, no money. Learning is the major factor which is related to education if you learn new things, then you will educate more and more.
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How does education affect economic development?
Education and economic growth In 1900, Spain and Finland were very similar: they were underdeveloped, largely agricultural countries with a low level of literacy (scarcely 40% of the population) and a similar income per capita.50 years on, Finland’s income per capita doubled Spain’s, all Finns were literate and secondary education had started to spread to all social classes in the country.
Meanwhile, in Spain, illiteracy was still widespread and secondary education a rarity. Almost 70 years later, and in spite of Spain’s huge economic development and improvements in terms of education, Finland’s income per capita is still higher than Spain’s. And so is its level of education. Therefore, were Finland’s educational improvements the key to its success? This must certainly be partly the case.
Education directly affects economic growth insofar as it is essential to improve human capital. Let’s take this step by step. An economy’s production capacity depends on different factors. These include physical capital, technology and the number of workers, as well as their quality.
- This quality is largely determined by what is called human capital (the stock of knowledge, skills and habits).
- An increase in workers’ educational level improves their human capital, increasing the productivity of these workers and the economy’s output.
- Numerous studies in the field of labour economics have attempted to measure this relationship between a worker’s education and its productivity, called the private return to education.
And the findings have been incredibly positive. The precursor to all such studies is the equation developed by Jacob Mincer in 1974, known as the Mincer Equation. This relates workers’ earnings (seen as a way of measuring their productivity) with their years of schooling and work experience,1 It goes without saying that equating a worker’s education with their years of schooling is highly flawed since it assumes that, for instance, one additional year of primary education has the same effect on a worker’s productivity as an additional year of university education.
- Neither does it take into account possible differences in the quality of the education received, particularly relevant for analyses carried out with data from different countries.
- Some studies therefore distinguish between primary, secondary and tertiary education and add quality controls such as the results from tests carried out internationally.
Another problem, more substantial and therefore more difficult to resolve, is whether such studies actually measure the effect of education on productivity or rather the result of talent. For instance, if more talented people are the ones who receive more education, then the estimated effect of education on productivity would largely reflect this greater talent and not the higher level of education.
In order to avoid this problem (in technical terms, an omitted-variable bias), some articles have attempted to use natural experiments. One of the most curious used identical twins with different lengths of schooling. Such twins are genetically identical and tend to have the same family environment, so their skills and habits should be very similar.
Such studies have found that one additional year of schooling results in an increase in earnings, and therefore productivity, of between 6% and 10%,2 In addition to education’s direct effect on a worker’s productivity, numerous economists also point to important education externalities for growth, larger than private returns.
- Paul Romer, for instance, suggests that societies with a large number of highly skilled workers generate more ideas and consequently grow more.
- In a recent work, Aghion et al present a theoretical model and some empirical evidence that shows more advanced economies benefit from workers with a university education since this promotes technological innovation, augmenting the productivity of both physical capital and the workforce as a whole.
On the other hand, developing economies benefit from workers with a primary and secondary education as this helps them imitate the technologies developed in richer countries, thereby also increasing the productivity of their physical capital and workforce,3 Given their huge importance, the existence of such externalities, or social returns, and their quantification are undoubtedly important when designing educational policies in order to avoid underinvestment in education.
Individuals tend to decide the level of educational training they wish to attain based on the private returns they expect to receive and do not take social returns into account. A significant social return would therefore justify policies to encourage greater investment in education. But studies focusing on quantifying the effects of education on economic growth and which therefore attempt to reflect both private returns and externalities also face several complications.
Like studies focusing on private returns, they need to accurately measure the education variable, distinguishing between different educational levels and controlling via quality. They must also deal with a problem of inverse causality: is it the case that countries which invest the most in education grow the most and achieve the highest levels of income? Or, alternatively, do countries with higher levels of income tend to invest more in education? Both relationships are bound to exist but, in this case, we need to know the extent of the former since it will determine what kind of educational policies need to be implemented.
- In order to identify this relationship, some studies make use of what are called instrumental variables.
- In other words, they look for countries or regions whose educational level has changed for some reason, independently of their growth rates.
- A mission which, in many cases, is almost impossible.
- Changes in mandatory education policies or appointments of politicians on legislative committees responsible for educational investment in US states are some of the events that have been considered.
However, in such cases the findings of the different empirical studies are not conclusive: some show clearly greater social returns than private while others find that both types of return are similar,4 Lastly, other kinds of externalities also result from education.
But beyond the relevance of education in economic growth and in fostering democracy, in the words of the United Nations: «education is a fundamental human right and essential for the exercise of all other human rights».Clàudia CanalsMacroeconomics Unit, Strategic Planning and Research Department, CaixaBank
1. See Mincer, Jacob (1974), «Schooling, Experience, and Earnings», NBER Book. On the other hand, although wage income largely reflects a worker’s productivity, there are other elements that can affect it, such as legislation, the role of trade unions, etc.2.
- See Card, D.
- 1999), «The causal effect of education on earnings», Handbook of Labor Economics 3: 1801-1863, for a summary of the empirical literature.
- In this summary, David Card also comments on the use of the geographical proximity variable for individuals to university as a good proxy of the talent-free educational level of individuals.3.
See Romer, P.M. (1990), «Human Capital and Growth: Theory and Evidence», Carnegie-Rochester Conference Series on Public Policy, Vol.32. And Aghion, P. et al. (2009), «The Causal Impact of Education on Economic Growth: Evidence from U.S.», Brookings Paper.4.
- Acemoglu, D.
- And Joshua, A.
- 2000), «How Large Are Human-Capital Externalities? Evidence from Compulsory-Schooling Laws», NBER macroeconomics annual 15: 9-59, show a small social return.
- And Moretti, E.
- 2004), «Estimating the social return to higher education: evidence from longitudinal and repeated cross-sectional data», Journal of Econometrics 121, 1: 175-212, a clearly higher social return.5.
See Glaeser, E.L., Ponzetto, G. and Shleifer, A. (2007), «Why Does Democracy Need Education?», Journal of Economic Growth 12.2: 77-99. : Education and economic growth
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How education can affect the economic growth in developing countries?
Education is one of the key factors of promoting economic growth because of its role in enhancing human capital thus productivity. However, adverse macroeconomic conditions and increased competition for scarce public funds have reduced governments’ capacity to expand education expenditure to improve labor productivity.
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How does education affect the development activities?
Education raises people’s productivity and creativity and promotes entrepreneurship and technological advances. In addition it plays a very crucial role in securing economic and social progress and improving income distribution.
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