This article discusses the (surprising to some) LACK of empirical relationship b/t formal education and income at a national level –
Over the past decade it has became an article of faith that education and skills make a vital contribution to economic performance (1). Deficiencies in national labour productivity and economic growth are increasingly attributed not to inadequacies in productive investment, but to educational shortfalls and weak labour skills (2).…’African countries with rapid growth in human capital [the fashionable term for people’s work abilities, especially levels of education] over the 1960 to 1987 period – countries like Angola, Mozambique, Ghana, Zambia, Madagascar, Sudan, and Senegal – were nevertheless growth disasters. Countries like Japan, with modest growth in human capital, were growth miracles. Other East Asian miracles like Singapore, Korea, China, and Indonesia did have rapid growth in human capital, but equal to or less than that of the African growth disasters. To take one comparison, Zambia had slightly faster expansion in human capital than Korea, but Zambia’s growth rate was seven percentage points lower.”
The Mallu economic malaise is a perfect example – statistically, at least, it’s the most educated state in India but, alas, also one of the poorest. Books, degrees, and examinations mean little for economic growth without a comprehensive social fabric that praises constructive, gritty real world results over idealized, intellectual banter….
Interesting article. Uninteresting statistics. Apples vs Oranges. Though you must start somewhere, these statistics need to be incorporated to a larger variable pool to come up with a better analysis of book smarts vs capital to support a hypothesis that degrees are a direct coorelation to economic success.
Traveling through Africa, I always wondered: does anything function here like the rest of the world? Several countries later, my answer was was “no (though not in a negative way…There exists the Western civilization, the Eastern civilization, and then there is the African civilization).”
However, social stability is extremely important as you mentioned. One may have the best engine in a car yet lack the funds to put decent tires on, therefore negating the superior engine. The sum of all parts argument.
Sigh — Tyler should know better. There’s a difference between rate of change and absolute level. African countries grew rapidly in human capital b/c they started at a low level. They’re still at a low level b/c of brain drain. Japan didn’t grow as fast, but it has orders of magnitudes more educated people than most of Africa. Heck, it may have more educated and trained people than most of Africa combined.
I agree with some aspects of his larger point, but only in the context of the econometric debate it sits in.
And actually, the connection between human capital and economic development is one of the most robust ones in the growth literature. The author’s point was that the causality may be backwards, and for that reason, he was examining the question more closely, yet still not closely enough.
So, ennis, it sounds like you’re in violent agreement that simple edumacation ain’t ’nuff to bring the Bling?
At the risk of being too un-pc for this site, i would suggest reading this recent new paper. It makes the point that IQ ranks with the highest yet econometrically determined predictors of national outcomes – and is superior to standard education measures as a predictor of human capital.
They compare it to Sala-i-Martin’s recent paper that ran 2 million regressions to find the best growth predictors in a set of data, and found that it was better than almost everything in Sala’s set.
Blogged in depth here, with plenty of citations for skeptics to run to ground.
They’re still at a low level b/c of brain drain.
But this is not really a good explanation, because:
1) Japan rapidly developed during the Meiji restoration by sending its students to study abroad and learn Western techniques.
People opposed to “brain drain” would have opposed this in the short term.
2) More contemporaneously, Taiwan, China, Singapore, South Korea, and India all send tons of students and/or expats abroad – and they are some of the fastest growing countries in the world. THis is because – as Anna Lee Saxenian shows – “brain drain” is really about brain circulation. Taiwan’s semiconductor industry, for example, is largely the consequence of Taiwanese migrants to the US setting up trans-pacific supply lines with relatives back home. The same is true for Indian outsourcing – guys came over here to do Y2K programming, built their credibility, and now Indians export software.
Forcing your most intelligent people to stay in the country is not a historically proven way to succeed economically.
I believe studies correlating IQ with national advancement are inherently flawed. For example, “IQ and the wealth of Nations” can hardly be considered a scientific work. It uses a ‘hodge-podge’ of IQ statistics from various studies, and often predicts the IQ of nations based upon its neighbors. For example the book uses a single IQ study for India, a country of over 1 billion people. Reading further you will find that this study was of 540 orphaned children. Given that some 42% of children in India are malnourished,it is not hard to speculate that this was the case for these orphans as well. There are no indicators on how the IQ is calculated. It is well known that verbal ability may or may not correlate with mathematical ability for example. Yet the study has proposed an IQ of 81 as an average for Indians, which is now basically taken as gospel.
The study also reports an IQ of 100 for China. However again this is suspect since it was actually provided by the Chinese government. Personally I believe the actual correlation is in reverse. Economic success permits a nation’s IQ average to reach its potential. This is why Japan, Korea and the European countries have a high IQ average. The US average 98 is lower, not because the US population actually has less intelligent people…obviously as its phenomenal ability to produce intellectuals of the highest calibre shows, but because of the inequal distribution of wealth. There was a study on the children of black NBA players a few years ago(will find the data). The average IQ of this group was 106. Clearly playing in the NBA does not require a special level of traditional IQ, so this is evidence that IQ is dependent on economic prosperity.
M. Chretien:
There’s a problem with you prosperity-causes-high-IQ theory: The East Asians were smart back when they were poor. See figure 3 of my paper here:
http://www.siue.edu/~garjone/naive.pdf
You can pull my data off of Steve Sailer’s website (http://www.isteve.com/IQ_Table.htm), if you’re so inclined.
For much, much, more data along those lines, check out Richard Lynn’s new book, Race Differences in Intelligence: An Evolutionary Analysis. He has hundreds of studies from across the 20th century, and all tell the same story. Lynn’s not relying on just one or two flawed studies…Race Differences is reviewed here:
http://www.gnxp.com/blog/2006/02/world-of-difference-richard-lynn-maps.php
Apparently, the appealing idea that “prosperity causes IQ” isn’t going to do the heavy lifting that you need….I hope many more people will join in this important research agenda to find out what does actually cause IQ. It’s time to move beyond hand-waving and wishful thinking….