Economix: Portugal’s Education Lesson

Another reason not to take to the education naysayers too seriously, via Charles Forelle in today’s Wall Street Journal:

Portugal is the poorest country in Western Europe. It is also the least educated, and that has emerged as a painful liability in its gathering economic crisis. …

The state of Portuguese education says a lot about why a rescue is likely to be needed, and why one would be costly and difficult. Put simply, Portugal must generate enough long-term economic growth to pay off its large debts. An unskilled work force makes that hard. …

There is substantial evidence from elsewhere that education confers broad economic benefits. Ireland was one of the E.U.’s poorest countries a generation ago. But it threw E.U. subsidy money into technical education and remade itself as a destination for high-tech labor, made doubly attractive by low corporate taxes. Ireland is now, even after a brutal banking crisis, among the richest nations in Europe. …

Prof. Hanushek [of Stanford] and a professor from the University of Munich have linked G.D.P. growth with population-wide performance on standardized tests. They calculate that Portugal’s long-term rate of economic growth would be 1.5 percentage points higher if the country had the same test scores as super-educated Finland.

We can all name exceptions to the rule: Bill Gates didn’t graduate from college. Many college graduates have suffered during the Great Recession. Even some people with advanced degrees are struggling to find work or are underemployed.

But the rule remains the rule. Whether you’re looking at countries, regions, states, cities or individuals, those with more education tend to do much better than those with less. Here, again, is the pay of college graduates in the United States, expressed as a ratio of the pay of high school graduates who never attended college:

Bureau of Labor Statistics

As you can see, the value of a college has risen since the recession began in late 2007.

Colleges have a lot of problems, no doubt. But discouraging people from getting more education doesn’t solve any of them.

Article source: http://feeds.nytimes.com/click.phdo?i=823fb37fdbe13ba9a8f6e5dee3182ada