Well-educated, healthy populations are of fundamental importance in raising levels of socioeconomic development. Numerous studies now document the positive correlations among, for example, women’s education, reduced fertility, and improved child health, and also between literacy rates and average per capita incomes. The World Bank argues that human resources—which include labor, the returns on educational investments, and social organizations—are one of the most important components of the wealth of most nations [1].

Good education and health do not follow as an automatic consequence of economic growth but depend on government action, especially policies that target primary-level education and health care. The provision of high-quality basic social services benefits the poorer members of society, who cannot afford private alternatives, as well as the economy as a whole.

One multicountry study has indicated that a 10-percent increase in life expectancy raises the national economic growth rate by about 1 percent per year [2]. Other research suggests that increasing the average education of the labor force by 1 year raises the GDP by 9 percent, although this holds true only for the first 3 years of extra education, with diminishing returns thereafter [3].

Investment in basic social services usually has more impact on human development and economic growth than does spending on higher education or advanced medical facilities. It has been estimated that the social rate of return for all developing countries averages 24 percent for primary schooling, 15 percent for secondary schooling, and 12 percent for postsecondary education [4]. Many economists now attribute much of the economic success of the "Asian tigers" to their governments’ commitment to public funding of primary education as the foundation for development. In 1960, Pakistan and the Republic of Korea had similar incomes but quite different school enrollment ratios -- 30 percent in Pakistan and 94 percent in Korea. Over the next 25 years, per capita GDP in Korea grew to three times that of Pakistan. It has been estimated that if Korea’s enrollment ratio had stayed the same as Pakistan’s, its per capita GDP would be about 40 percent less than it is today [5].

Educational achievements worldwide have improved significantly over the past 30 years; the proportion of children attending school has risen, and adult literacy programs have helped to spread basic reading skills. (See More Children Are Attending School and More Adults Can Read.)

References and notes

1. The World Bank, "Expanding the Measure of Wealth: Indicators of Sustainable Development," CSD Edition, Draft for Discussion(The World Bank, Washington, D.C., 1997), pp. 5-15.

2. United Nations Development Programme (UNDP), Human Development Report 1997 (UNDP, New York, 1997), p. 76.

3. Ibid.

4. United Nations Development Programme (UNDP), Human Development Report 1996 (UNDP, New York, 1996), p. 74.

5. Ibid., p. 76.