Education and Development: The Issues and the Evidence

inequality reductions as a result of wage compression may therefore have been
accompanied by increases in the intergenerational transmission of social status.

It is therefore difficult to find a consensus on the relationships between education and
income distribution. Expanded access does appear to reduce income inequality, at least
where a substantial modern sector exists as in Kenya. The relative impact of
government policy on progressive taxation, incomes and subsidies will depend on how
draconian these are and how effectively they are implemented. Educational expansion
is frequently more attractive politically than direct interventions to transfer wealth and
income earning opportunities away from the relatively privileged (Blaug 1978).

2.1.5 Concluding remark

What then can we conclude from the literature on the relationships between education
and economic growth? First, that there is no single answer to the question some wish to
pose - there are many answers depending on circumstance, developmental status and
the specifications of the variables.

Second, the direct policy implications of macro level research are very limited. They
are constrained by dependence on historical relationships which may or may not persist,
the level of aggregation is often so high that effective and ineffective years of schooling
are treated as similar, and the application of findings from individual countries or
groups to other countries is analytically hazardous.

Third, far more studies imply, suggest and demonstrate plausible and positive links
between educational investment and economic growth than suggest that the effects are
nonexistent. Even fewer studies suggest a negative relationship. It would be pessimistic
in the extreme to suggest that the widespread faith in educational investment as a
component of economic development was an aberration that could persist so
extensively for so long if it did not contain elements of truth no matter how difficult
these are to demonstrate.

Fourth, there is evidence in many studies of productivity benefits derived from
educational investment. The most policy relevant ones appear to be those based on
recent data which relate to circumstances in particular countries which can give some
guidance on the most worthwhile types of educational interventions. Placing them in
context is a necessary pre-condition for confidence in conclusions that can be drawn.

Fifth, educational effects are associated with various externalities that may have
economic consequences. They may also extend to influencing income distribution and
wider social inequalities through dynamic processes that need careful unravelling.

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