Alison Wolf of the University of London writes.
“We are told that in a "knowledge economy," a country needs ever more graduates and formal qualifications to stay competitive. But education simply does not deliver economic growth the way our politicians - and businessmen - believe: more education in does not mean more growth out....large international studies often find a negative relationship between education and growth rates.”Egypt is a classic example of this. Between 1970 and 1998, its primary school enrollment rates grew to over 90%, secondary schooling soared from 32% to 75%, and university education doubled. Egypt started the period as the world's 47th poorest country; it ended the period as the 48th poorest.
But it is not only among developing countries that links between education and growth prove elusive. Switzerland has been one of the richest countries in the world for a century - and not because of its natural resources. Yet it has the lowest rate of university attendance in Western Europe. “
Contextually this is very much aimed at the British Labour government which has out of the air plucked a target of 50% enrollment in higher education. This seems to have arisen either through a misreading of human capital growth theory, or, more likely, a perceived but probably spurious correlation between voting labour and getting a degree.
But the questions it raises about education are perhaps most serious in the developing world – another country that raised its school expenditures was Zimbabwe and perhaps its recent troubles are a backlash against “the growth education promised” that failed to materialize.
Anyway here’s a neat animation from the UN on HDI and income.