Education and Economic growth

Topics: Economics, Economic growth, Capital accumulation Pages: 13 (4537 words) Published: January 17, 2014
Relation between education and economic growth in KPK
Concept Note:
My research is about the educational issues in Kp, I want to identify that education have positive or negative impact on growth in GDP. All around the world in now a day’s education is considered as the most important and working tool in controlling the problems like poverty, economic issues etc. Education is playing a vital role in developing human capital by increasing skills and producing/innovating new technology. Education help’s the new generation to tackle the problems like income distribution, gender inequality, inflation, unemployment etc. 1. Introduction

Around the globe in now a day’s world education is considered as one of the most dominant tool in the control of unhealthy economic activities such as poverty and promoting competition etc. Education helps in the promoting of economic growth and developing human capital by increasing skills and developing technology. It plays a great role for the coming up generations to cover up with the difficulties in economic growth. As for poor country like Pakistan education is a key to the economic development and reduction of inequalities in income distribution. The governmental institutions are making a lot of efforts to increase the quality and quantity of education but introducing technology and providing new facilities in the limited possible time, the literacy rate of children 10 y/o and above was forty five 45 % in the year 2001-02, and later the overall literacy rate was fifty five 55% in 2006-07, which indicated a big increase of ten 10% only in six 6 years. In the past few years we have observed that there is a change in real growth due to the changes in education: 3.8% growth in Real GDP (2010 est.) with increase in literacy 66%, 1.7% growths in Real GDP (2009 est.) with increase in literacy 45%. In order to attain a sustainable development and growth, we should tend towards poverty reduction and the development of social infrastructure i.e. education. The purpose of the study is to analyze the different variables that are associated with education and their effect on economic growth and development, over view of the researches conducted in the different countries of the world show an uplift in the economic activities leading to the economic growth, due to increase in education. More we will provide the overview of the effects education on economic growth and which will provide a base to the future policy making. The enrolment rate of (948,364) has been found out in 2009-10 in Higher Education in Pakistan. Newly formed four universities are to boost and promote the higher education. Now days, totally 132 universities with employing 50825 teachers in Pakistan. Education has a vast impact on the economy of a nation by promoting multidimensional issues. For a time it promotes economic growth upwards and for another hand it helps in the reduction of poverty level; and creating such a social and political environment that creates investment opportunities and attract the investors. Education increases the productive capability of a worker and lead to a reasonable positive change in the policies. In economics there are many theories and models, which relate education to economic growth. Due to education a person’s earning potential increases but also produces a ripple effect in the overall economy due to positive externalities. Katharina Michaelowa of the Hamburg Institute for International Economics diagramed the impact of education at both micro and macro levels as follows:

Source: Michaelowa, Katharina. (2000) “Returns to Education in Low Income Countries: Evidence for Africa.” In the above diagram we discussed the effects of education that are caused directly and indirectly as well. This paper focus on the question that if the development in education section would bring a significant change in...
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