Human capital accumulation and economic growth

The number of children not going to school globally has halved in 10 years

The education explosion in the 20th century

Tertiary education attainment of young adults in Australia, New Zealand, USA, UK and Canada, 2000 and 2011

Figure 1: tertiary educational attainment of adults aged 25 to 34 in Australia, New Zealand, USA, UK and Canada, 2000 and 2011

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Source: OECD Factbook.

The rise and rise of educational attainment

Another gender gap that dare not mention its name

The payoff from investing in education is large in developing countries

There are big differences in educational attainment across Europe

Finishing year 10 of high school was a very much a mid-20th century phenomenon

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Source: Average Years of Education | Clio Infra.

The rising educational attainment of the poor

The Upside of Income Inequality » Gary Becker and Kevin Murphy

Figure 1. Percentage by which the wage of workers with college and graduate school educations exceeds that of workers with high school only.

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F4

via The Upside of Income Inequality » AEI.

Trends in Income Inequality and its Impact on Economic Growth – OECD – is it all about not enough graduates – updated?

The analysis of the OECD published overnight depends crucially upon how greater inequality reduces the ability of the lower income families to invest in human capital.

The OECD theory of inequality and lower growth is there is a financing constraint because of inequality that reduces economic growth because of less human capital accumulation by lower income families.

Proportion of adults aged 25–64 years with an educational qualification of at least upper secondary level and tertiary level, 1991–2009

Figure K4.1 Proportion of adults aged 25–64 years with an educational qualification of at least upper secondary level and tertiary level, 1991–2009

In a nutshell, not enough people are going to university. Apparently,  the explosion in tertiary educational attendance over the last generation, an increase of about 150%  for the adult population aged 25 to 64, was just not good enough.

But what about adults aged 25 to 34, recent graduates, how many of them are there?

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There was an explosion of young New Zealanders in the late 1990s who qualified for a degree from a university or diploma from a Polytech.

Under the hypothesis of the OECD about financial constraints retarding the accumulation of human capital among the lower middle class – the fourth decile of the income distribution –  even more young New Zealanders should have gone to university or Polytech.

Are there many New Zealanders left who are qualified and suited to tertiary education who do not go?

That is the crux of the OECD position: not enough lower-middle-class New Zealanders go on to obtain higher education and upgrade their skills because of financial constraints in a country was in interest free student loans,  means tested student allowances, and the government subsidises for 75% of all tuition fees. Tuition fees only equal 25% of the actual cost  and any one can get a student loan to cover this fee.

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