Education, Skills, And Economic Growth Essay Example

Education can pass as one of the most important factors in enhancing economic growth in any country. The type and level of education the citizens of a particular country gain influences among other things the amount one earn. Increased education lead to an increasing amount of earnings (Hanushek, and Wobmann, 2007, p.5), and consequently stimulate economic growth directly and indirectly.
The cognitive skill one gains in schooling also influences the economic growth (Wobmann and Hanushcek, p. 26). A country’s labor acts as a driving factor to an increase in economic activity. Trained workforce is more productive than an untrained workforce. Professionals take more initiatives to invest in different sectors leading to economic growth. Such trickles down to the unskilled laborers in the market who also in turn get employed. The general impacts would be an increased income for both the unskilled, and the skilled. As more people save money, and reinvest, the economy grows. Moreover an increased income availed the market for the goods and services produced.
As noted earlier, the more education one gain, the more the pay one gets. The skills required for the changes would require one to keep training so as to remain relevant. In the event that one does not increase education, or at least get enough education in the first place, the social-economic mobility of the person stagnates. Skill-based changes in technology leads to a bigger premium in wage growth, productivity, and growth (Ferranti, Perry, Gill, Guach, Maloney, Sanchez-Paramo, and Schady, 2003).
In addition, graduates more likely to get the right jobs soon after schooling as opposed to less skilled labor. After getting the job, they can enroll for further education as life-long learning (LLL) is a critical in modern world. Scarcity of the skills in the market at the time of qualification influences the wages, and also the rate of mobility. If the skills are scarce, one can bargain for higher wages as opposed to skills that are readily available.
Education and market skills are more of the same thing than are different. Market skills are derived from the education system of the country. The purpose of education among others is to ensure that it produces people who can solve the existing problems in the market. For example, if the market requires engineers, the education system would adapt to that prevailing need and produce more engineers to meet the market demand.
However, there are fundamental differences in that the education system takes long to adapt to the changing world. To produce the right people to meet the needs of the society is not as easy as the needs arise. For example, it takes up to three years to train graduates who must have gone through preliminary education for a long time.
Developing Countries increase the institutions of higher learning and put mechanisms to ensure that the education quality is high. The developing countries may also send a few of their students to the developed countries to learn skills that are missing in their countries. The quality of education, as mentioned earlier, is critical in the labor market and the economic growth of the country.

Work cited

Hanushek, and Wobmann. The Role of Education Quality in Economic Growth. (2007). WPS4122.
Ferranti, Perry, Gill, Guach, Maloney, Sanchez-Paramo, and Schady. CLOSING THE GAP IN DUCATIONAND TECHNOLOGY. The World Bank. 2003