Tuesday, 20 February 2018

The contribution of education to economic growth, some quick maths

We need a more skilled economy to get more economic growth says everyone.  Some maths to help this out.  According to this nice website, average years of education are as below

With the data being for the UK 0.92 years in 1870, 6.24 years in 1940, 7.01 years in 1960, 9.97 years in 2000 and 12.46 years in 2010.  Since 1960 that's a rise of 0.109 years per year. If the return to education is 7% and the share of labour in value added is 0.66, that's a contribution to GDP growth of 0.005, that is, 0.5pppa.  GDP growth was, 1960-2010, 2.6%.