In 1960, countries with an education level of 8.3 years of schooling were 5.5 times richer than those with 2.8 year of schooling. By contrast, countries that had increased their education from 2.8 years of schooling in 1960 to 8.3 years of schooling in 2010 were only 167% richer. Moreover, much of this increase cannot possibly be attributed to education, as workers in 2010 had the advantage of technologies that were 50 years more advanced than those in 1960. Clearly, something other than education is needed to generate prosperity.
Pointer from Tyler Cowen.
Note that this is not necessarily support for the null hypothesis. It could be that the “something other” is quality of education rather than quantity.
Those with 8.3 years of schooling enjoy greater relative bargaining power when surrounded by those with 2.8 years of schooling. If everyone is educated, you get (liberal arts) university grads pursuing waiter “careers”.
Not different from all economic endeavors — if you get lots of oil rigs, returns on oil rigs will fall.
Plus something about the middle income trap seems relevant (late comers don’t easily unseat incumbents in the innovation race)
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Education is an effect.
Presumably length of time at a given education level also matters. As an extreme example, if you magically went from baseline to 8.3 times smarter, you wouldn’t expect GDP to magically climb. It’s not merely being at the higher education level- it’s being at that level for long enough time to let it payoff.
But yea, I also suspect that the bigger issue is using length of schooling as a proxy for education. Far from an ideal metric.