Thursday, August 28, 2008

Economics and Education

Economic reasons why a nation supports education and training

The workers of some nations have more human capital than those of other nations because some nations invest more heavily in education and training. Nations that spend money and effort on the education and training of their young will develop workers with substantially more human capital than those countries that do not do so. Nations that do not have the financial resources necessary or a tradition of education may produce hard workers, but their minimal human capital limits their value. Singapore created a good, competitive public education system and now has a high personal income average because its workers have superior human capital. West African nations cannot afford to build schools and hire teachers and their human capital remains low.

Much of the human capital of a nation's workforce is acquired when people are young and in school. Increasing a nation's human capital will enable its economy to create more wealth. A nation with a largely illiterate workforce with little or no understanding of math or science cannot efficiently convert its land resources or use its capital machinery effectively. Education and training are absolutely essential to the creation of an efficient economy.The United States has emphasized education and training for years and has one of the highest rates of economic growth in the world as a result. Through an increased emphasis on education, the United States hopes to hold onto its economic advantage. Southeast Asian nations such as the Philippines, Malaysia, Singapore, and Thailand have invested heavily in education and reaped the benefits with high economic growth in the 1990s. They continue to invest in their children today.

Ref. PLATO World View

March 23, 2007

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