Education and Economic Growth: From the 19th to the 21st Century

Education and Economic Growth Contacts Charles Fadel, Global Lead, Education, Cisco Systems: cfadel@cisco.com Riel Miller, Principal, xperidox: futures consulting: rielm@yahoo.com By Riel Miller, www.rielmiller.com; commissioned by Cisco Systems, Inc. Education and Economic Growth: From the 19th to the 21st Century Executive Summary Theresearchsummarizedinthisarticleshowsthatschoolingisnecessaryforindustrial development.Theformofschoolingthatemergedinthe19thcenturygeneratesspecific cognitive,behavioralandsocialknowledgethatarecriticalingredientsforthewayindustrial societiesorganize: • productionandconsumption • dailylifeincitiesandnations • thesizeandfitnessofthepopulationforwork • thecreationanduseofknowledge. Therefore,itisdocumentedthat: • Schoolingisanecessarybutnotsufficientconditionforthespectacularfeatsofindustrial developmentinthe20thcentury. • Theintricacyoftherelationshipbetweenschoolingandtheindustrialformofeconomic growthisconfirmedbythetechnicaleconomicsliterature. • Economistshavedemonstratedthatbothindividualsandsocietiesgainfromtheinvestments madeinschooling. Thateducationisanessentialingredientofprosperityisatonce obviousandcontentious.Obviousbecauseanypersonabletoread thistextknowswhatadifferenceitmakesintheirlivestohavegone toschool,tohavelearnedtoread,writeandcalculate.Contentious becausewhensocialscientiststryto“prove”thateducationisacause ofeconomicgrowthitturnsouttobequitedifficulttodecidewhich camefirst,thechickenortheegg.Whatismore,eventhebasicterms suchas“whatiseducation”and“whatisprosperity”becomevastand cloudyterrainsforthetechnicalexpertslikeeconomists,sociologists, educationspecialistsandpolicyanalysts. Thisarticleoffersonewayofarrivingatasingleoverarchinggeneral-izationabouttherelationshipbetweeneducation,definedastheclass-roomschoolsystemthathasbeenthepredominantwayoforganizing formaleducationthroughoutthe20thcentury,andeconomicgrowth, definedasthemonetaryaggregateGDP(grossdomesticproduct)that isusedwidelybyeconomistsandthepresstomeasuretheeconomic performanceofindustrialsocieties.Overthefollowingpagesitis arguedthatthespecificformofeducationsystem,characterized byuniversalcompulsoryclassroomschooling,isanindispensable componentofanindustrialgrowthsociety.Thisisabroader,more historicallygroundedhypothesisthataimstoencompassthewide rangeofeconomic,socialandpoliticalreasonsforassociatingeduca-tionwithgrowth.Itisahypothesisthatrestsonclarifyingtheroleof onespecificwayoforganizinglearning,universalmasscompulsory classroomschoolingandthepreponderantkindsofknowledgethat emergefromthisprocess,withthecreationofoneparticularform ofprosperity,typicallysummarizedbythemetricofgrossdomestic product(GDP). Thehypothesisisthatmakinginvestmentsinalltheelementsofa schoolsystem(teachers,buildings,textbooks,informationtechnology, curriculum,supervision,testing,etc.)andthenforcingyoungpeople toattendthem(i.e.giveuptheincometheymightotherwiseearn)isa necessarybutnotsufficientconditionforexpandingthegrossdomes-ticproductofanindustrialsociety.Tobeclear,themassivesystems ofuniversalcompulsoryschoolingpioneeredinthe19thcenturyand “perfected”aswellasextendedtopost-secondaryeducationinthe 20thcenturydonotencompassallhumanlearning—farfromit.What peoplelearnandknow,thepracticesthatareinformedandinspired byexperienceandreflection,arisefromallkindsofhumanactivity. Howevertheargumenthereisthatthespecificcognitive,behavioral andsocialknowledge,thatisthebasicresultofaspecificformof schoolingintroducedinthe19thcentury,playedandcontinuesto playacrucialroleinspectacularfeatsofindustrialdevelopment. Economic Growth Therecanbelittledoubtthattheperformanceofindustrialsocieties hasbeennothingshortofamazingwhenitcomestogenerating monetarywealth.AsAngusMaddison(2001)showsinhispublica-tion:TheWorldEconomy—AMillennialPerspective,GDPpercapita inindustrialnationsexplodedfromaround1,000US$in1820toover 21,000US$bythelate1990s.Figure1below,alsofromMaddison (2007),providesadetailedglobalbreakdownfortheperiod1950to 2003.Theevidenceisoverwhelming. WhereindustrytriumphedsodidGDPgrowth.InWesternEuropeGDP percapitajumpedfromjustover4,500US$toalmost20,000US$. InJapantheleapwasevengreater,fromaround2,000US$in1950 toover20,000US$in2003.WiththeexceptionofChina,wherethe recentgrowthspurtisimpressivewhenseenfromtheperspectiveof suchalowstartingpoint,thosepartsoftheworldwherethedevelop-mentofindustrialsocietyeitherstagnatedordeclinedshowmuch lowergrowthratesofGDPpercapita. 32,000 W Europe USA Latin America China Japan E. Europe Russia India Africa 25,000 20,000 15,000 10,000 5,000 0 1953 1973 1990 2003 Figure 1: Growth of per Capita GDP: the World and Major Regions, 1950–2003. Level in 1990 Internationl PPP $ Source:Thischartisbasedondatafrom:AngusMaddison,Chapter7,Table7-3,ContoursoftheWorldEconomy,1-2030AD,OxfordUniversity Press,2007,forthcoming.www.ggdc.net/Maddison 2 Cisco Public Education and Economic Growth Education Growth Asimilarlyspectacularexpansionofparticipationineducationas measuredbyschoolenrolmentratescanbeseenoverthesame period.Historicalestimatesfortheyear1900putparticipationratesin primaryeducationatunder40%ofthecorrespondingagegroupin mostpartsoftheworld,exceptNorthAmerica,northwesternEurope andAnglophoneregionsofthepacific,wheretheratewas72%(Cohen andBloom,2005,p.10).Now,morethanacenturylaterthe“netenroll-mentrate”—whichisastricterdefinitionofparticipation—showsthat mostoftheworldisabovelevelofthe“higheducation”regionsatthe dawnofthe20thcentury.Figure2showsthatbytheearly21stcentury (2004)everypartoftheworldhadachieved,ataminimum,thelevel attainedbythemostindustrializedcountriesatthestartofthe20th centuryandmostfarexceededthelevelsofacenturyearlier. 1999 2004 (Increase Since 1999) 2004 (Decrease Since 1999) No Change Sub-Saharan Africa Arab States Carribean South-West Asia Pacific Central/Eastern Europe Central Asia East Asia Latin America N. America/W. Europe 50 60 70 80 90 100 Net Enrolment Rations (%) Figure 2: Net Enrolment in Primary Education Worldwide 1999 to 2004 Sources:EducationforAll,UNESCO,2007,p.1. Ofcourse,asisunderscoredbytheimportanteffortstorealizethe UnitedNationsMillenniumgoalsofEducationforAll,thereisstillalong waytogo.The2007Report(UNESCO,2006)indicatesthatworld-wide,in2004,781millionadults(oneinfive)stilldonothaveminimum literacyskillsandthatcloseto77millionchildrenofschoolagearenot enrolledinschool(Table1). Not in Primary School Not in School 1999 110,244 98,172 2000 107,852 94,787 2001 105,307 92,379 2002 107,395 93,824 2003 2004 101,038 91,032 86,828 76,841 Table 1: Estimated Numbers of Children Out of School 1999–2004 (thousands) Source: UNESCO, Education for All, 2007, p. 28 . Cisco Public 3 Lookingatthedegreeofeducationalattainmentintermsoftheaver-agenumberofyearsofschoolingfortheadultpopulation—ameasure thattellshowmanyyearsofschoolinghavebeenaccumulated— showsthatinOECDcountriestheaveragestandsatjustunder12 years(Figure3).Worldwideprogressisbeingmadetowardsthislevel butasUNESCOreportstherearestillmanypartsoftheworldwhere theobstaclesareverysignificant—includingproblemswithenrolment rates,genderinequality,andschoolquality(UNESCO,2006,p.64). 16 14 12 10 8 6 4 2 0 Figure 3: Educational attainment of the adult population: average number of years in the educational system for the OECD countries 2004. 1.Yearofreference2003. Countriesarerankedindecendingorderofaveragenumberofyearsintheeducationsystemof25-to-64year-olds. Source:OECD,EducationataGlance,2006,p.28. The Overall Argument Astheprevioustwosub-sectionsindicate,thereisstrongevidence fromtherecentpastthateconomicgrowthhasbeenaccompaniedby growthinbothspendingandparticipationinschooling.Economists, asreportedinabriefoverviewinthenextsection,haveexaminedthis associationquitecarefullyandcometotheconclusionthat,througha varietyofdifferentavenuesandinanumberofdifferentways,invest-mentinschoolsystemsdoeshaveastrongeconomicpay-off.Thisis animportantconclusionthatishighlyrelevanttoindividual,corporate andgovernmentdecisionsregardinginvestment.Forallspheresof decisionmakingthereisgoodevidencethattherateofreturnishigh, evenrelativetootherinvestmentopportunities. However,thetwomaincomponentsofthisrelationship—schooling andincomegrowth—arebothveryspecific,evennarrowwaysoflook-ingattwobroaderquestions:learningandwell-being.Indeedneither GDPnorschoolingemergedfull-blownontothestageofhistory.There weremanyexperiments,manyreactionsandmuchreflectionbefore today’sfamiliarindicatorsandinstitutionsgaineduniversalcurrency. Itmayseemlikealong-forgottenhistoricalstory,butmeasuresof 4 nationalincomelikeGDParetheresultofprotractedeconomicand intellectualprocesses.Inthesamewaythatuniversalcompulsory schoolingdidnotalwaysexistnordiditbecomeafixtureofsociallife overnight.GDPandschooling,eachinitstime,wasaradicalidea, perhapsmoreradicalthananyofthepolicyinitiativesthatarecom-monlydebatedtoday. Now,however,itisbecomingclearthatthewaywethinkoflearning andeconomicwealtharechanging.Thereislittlecontroversyover theobservationthatthemanykindsofknowledgeacquiredthrough industrialeraschoolingareonlypartofwhatapersonknows.Equally acceptedisthenotionthatindustrialwealthasmeasuredbyGDP isonlypartofoverallsocietalwealth.Suchconclusionsmayseem obviousasattentionshiftstoconcernsaboutqualityoflife,commu-nitycaring,theenvironmentandotheroftennon-monetaryaspects ofpeople’slives.Butthisrecognitionalsounderscoresthehistorical specificityofthesewaysoflookingattheworldaroundus.Andit alsosignalsthattheconstructionofbasicwaysofdoingthings,like schoolsforlearning,andmeasuringthings,likeGDPforwealth,are timespecific. Cisco Public Education and Economic Growth Neitherschoolingnornationalincomeaccountswereprescientcon-structs,builtwithaforeknowledgeofhoweachwouldservetofacilitate theachievements(andfailures)ofindustrialsocieties.Onthecontrary, historyistoorichandcomplex,thefuturetoounknowable,foranything butex-postaccountsofthe“inherent”logicofchoicesinthepast.Even thoughitisnowclearthatbothmetrics,yearsofschoolingandGDP, areparticularlywellsuitedtothewayproduction,consumptionand,in ageneralway,dailylifeareallorganizedinindustrialsociety.Itwould bewrongtoseeeitheraseternalorself-evidentlyuseful.Hencewhat willserveinthefuturemustremainanopenquestion.Partofbeing opentosuchquestionsinvolvessituating,onthebasisofhypotheses andanalysis,whyandhowrelationshipslikethatbetweenyearsof schoolingandGDPexhibitparticularpatternsoverparticularperi-odsofhistoryandphasesofsocio-economicdevelopment.Inother words,asdiscussedinthenextsection,theanalysisoftherelationship betweenyearsofschoolingandGDPofferimportantinsightspre-ciselybecausetheseconceptsdependedonandcontributedtothe emergenceandevolutionofindustrialsociety. Withtheobjectiveofunderstandingtherelationshipbetweenschool systemsandeconomicgrowth,thispaperisorganizedaroundthe hypothesisthattherearefourrolesorfunctionsthatschooling(aspe-cificformandcontentoflearning/knowledge)performs(moreorless wellindifferentplacesatdifferenttimes)inindustrialsociety(aspecific butevolvingwayoforganizinganddefiningwealthcreation).Thus,from aneconomist’sperspective,universalcompulsoryschoolingsystems playaroleintheconstantandon-goingprocessofindustrializationin fourbroadandessentialways: 1. Diffusingandinculcatingtheorganizationalattributesofindustrial methodsofproductionandconsumption; 2. Diffusingandinculcatingtheorganizationalattributesofanony-mousurbanlife,mass-citizenshipandtheadministrativestate; 3. Augmentingthesizeandfitnessofthepopulationavailablefor increasingthedivisionoflaborinindustrialworkandlife;and 4. Improvingtheoverallsocietalcapacitytoproduce,accumulate, depreciateanddiffuseknowledge. Theimportanceoftheseattributesforthefunctioningofindustrialso-ciety,ataminimumasatransactionspace(productandlabormarkets), isoftenoverlooked.Todaywetakeforgrantedmanyofthebasicat-tributesthatmakethefunctioningofindustrialsocietiesmoreefficient, includingthesimplefactthat: • mostpeoplespeakandreadacommonlanguage; • themajorityofpeoplearepunctual(on-time)andrespectauthority (obedient); • peoplefinditroutinetocooperatewithstrangersatworkandin theirlocalcommunity; • adultscanparticipateinthelaborforcewithoutputtingtheir childrenatriskandchildrendonotcompetewiththeirparents inthelabormarket. Cisco Public Theseconditionsdidnotalwayspertainintoday’sindustrialized societies.And,asispainfullyobvious,theseconditionsdonotcurrently pertaininmanypartsoftheworldwherebasicsocialorderhasbroken down.Thepointisnottoarguethatsomesortofidealuniformityor dictatorshipisnecessary.Ratherthepointisthathistoricalprocesses havecreatedtheconditionsforopentransactionsandhighlevelsof interdependency,diverseexpressionsoffreedomsandinternalized responsibilities.Andthatbyunderstandingtheenablingandlimiting roleofschoolinginthisprocessofsocialevolutioncurrentdecisions canbeputincontext. Thispaperfocusesontheroleoftheindustrialformofschooling, inventedinaburstofcreativityandexperimentationthatmarkedthe industrialrevolution,increatingtheawareness,acceptanceandreflex expectationsformanybasicattributesofindustrialworkandlife.The hypothesisisthattheuniversalandcompulsoryclassroommethod ofschoolingissuchacriticalingredientforthetransitionfromboth agriculturaltoindustrialproductionandfromruraltourbanlifebecause itisahighlyeffectivemeansforachievingthefourfunctionsoutlined above.Inotherwordsthepay-offfromaspecificwayoforganizing learningislinkedtoaspecificwayoforganizingeconomicandsocial activity. Obviouslyoneoftheunderlyingassumptionsbehindthiswayoflook-ingattherelationshipbetweenyearsofschoolingandGDPgrowthis thatsocietieschangeovertime.Fortheargumentspresentedherea furtherassumptionhasbeenmade,thattheindustrialeconomiesthat havehadthehighestratesofGDPgrowthoverthelasttwocenturies exhibitacompositionalformofchange.Thisisaformofchangewhere leadingsectors,withleadingskills(forexamplerecentlyIT)attract investmentandgeneratejobs,whiledecliningsectorswithfailing markets(forexampleinthepasthorseshoes)becomenotonlyless importantintheoverallshareofoutputbutalsoloseinfluenceover theexpectationsandbehaviorofsociety. 5 ... - tailieumienphi.vn