Challenging the conventional view, there is actually a striking global correspondence between the world economic slowdown since 1973 and ever-increasing levels of educational spending. Comparisons between countries also confound the idea that more education translates into more growth. For example, South Korea is often given as an example of a country that made education a priority since the 1960s and saw significant economic growth. But as Professor Alison Wolf from King's College London points out, Egypt has also prioritised investing in education, but its growth record has been poor (4). Between 1970 and 1998 Egypt's primary enrolment rates grew to more than 90 per cent, secondary schooling levels went from 32 per cent to 75 per cent, and university education doubled - yet over the same period Egypt moved from being the world's forty-seventh poorest country to being the forty-eighth.As Cowen says, "The consumption component of education is commonly underrated. Rich countries spend more on education for the same reason that they consume more leisure."
A retort might be that education isn't the sole determinant of growth - other factors may offset its positive economic role - but it remains a necessary one. But this argument doesn't stand up either. The rapid growth of Hong Kong, another of the East Asian tigers, wasn't accompanied by substantial investment in education. Its expansion of secondary and university education came later, as more prosperous Hong Kong parents used some of their newfound wealth to give their children a better education than they had had.
A study for the World Bank came to similar conclusions....
There you have it. If you work in the "white collar" world, think about how many of your colleagues have pursued advanced degrees because those degrees carry prestige and make them more promotable -- not because they have acquired more skills but simply because they have acquired a piece of paper from a university. Now think about how much more productive those colleagues have become because they acquired their advanced degrees. Oh, you're still waiting to see the results? Fancy that!