Economic growth is a diverse process, and there has been a constant process of measurements determining the economic development and growth of the entire nation. As of now, the economists have mainly given the due credit to physical capital which has proved to be the highest factor for the economic growth of a capital and also enhance the living standards of the people. But there have been some changing trends and recent studies have led to new results. In the past three decades, new information has been established and it says that even education plays a major role in the growth of a nation’s economy.
Let us determine the dimensions in which education expands. Studies have shown that it is not restricted to quantitative expansion only; instead, it is the qualitative improvement that has contributed in developing the labor force and contributes effectively to the growth of an entire nation. Jay Eitner sees how modern day world economy considers education as the human capital and expenditure and such an investment is steered only towards a brighter future.
Studying the Comparative Growth of Education and Growth- Jay Eitner Does Not Miss It
Across the globe, there have been several empirical studies carried out to determine the various factors which play a major role in the development of the nation’s economy. And in these studies, it has been seen that apart from physical labor and capital, education also helps in the development of the human capital and contributes significantly to the growth of the nation’s economy.
The United States of America has its own cultural history, and that is rich enough to make a broad study of how history defines the importance of education in the national growth. In between 1909 and 1949, there were two world wars which have already struck the world, and during these two world wars, quite a few innovations have also taken place making the lives better to some respect. Human labor was one of the consistent factors in the Industrial Revolution which was not gone by. While studying in details about it, Jay Eitner pointed out that 57.5 percent of the growth in the hourly output of could be easily attributed to technological change that was taking place. Those who were a constant part of learning these changes could contribute healthily to the entire production and those who didn’t fell apart.
Another effective method applied to measure the contribution of education to the nation’s economic growth is Rate of Return. The investment made in education and the measurement of earnings in the days to come from that education created the expected result. Higher the return, more the growth, and while it was almost 12.5 percent back in the 1950’s, the figure has definitely gone higher with the dawn of the 21st century.
Education is a continuous process, and as people keep estimating the positive effects of education, they get to know how to reap the benefits. Neglecting it would be the biggest fault and the world history has already proved it.