Economic Growth in East Asia

Growth in Education Level of the Working Population


Note: Data are average annual growth rate 1960-1992 of wage-weighted years of schooling of the adult population. East Asia figure excludes China and Japan.
DataData and Source

The skills of a country's workforce are a form of capital -- human capital. Investments in education and training yeild future returns in the form of more productive workers. Measuring human capital accumulation is fraught with difficulties. Some studies have found school enrollment rates in East Asian economies to be higher than in other comparable countries, while other studies show no clear general difference. School enrollment rates, even when measured accurately, do not capture the quality of schooling or the rate of growth of years of schooling among the working population as a whole. Moreover, training on the job and at home are also important means of human capital accumulation that are quite difficult to quantify..

The best available indicators show that the rapidly growing East Asian economies have a relatively high rate of human capital accumulation. The graph above shows that the growth rate of the wage-weighted years of schooling of the working population was relatively high in East Asia. Comprehensive, high-quality primary education and education for girls are important aspects of human capital accumulation. The overall growth in schooling in East Asian economies has been accompanied by important gains in these specific areas as well.

While state expenditure on education as a share of GDP does not distinguish East Asian economies from other economies at a similar level of development, rapid economic growth and declining population growth in East Asian economies has allowed rapidly rising expenditure per student. For example, between 1970 and 1989, real expenditure per pupil at the primary level rose 355% in Korea. Expenditures per pupil in Mexico and Kenya, in contrast, rose 64% and 38% respectively. Economic growth, declines in fertility, and growth in educational expenditure per pupil form a mutually re-enforcing "virtuous circle".

Topic Economic Growth in East Asia