Page 11 - Education for Development:George Psacharopoulos University of Illinois at Urbana-Champaign, USA

Education for Development: What Policies?c9

10-percentage-point increase of the primary school enrolment ratio is associated

with a 0.27-percentage-point increase of the growth rate.
Regarding efficiency in the use of resources, spending on human capital is
a good investment. For example, in the United States the long-term 1966–2015

average return on stocks and bonds is 2.4% (Damodaran, 2016) versus a 10.5%
overall private return to investment in education.

Vocational education

Within levels of education, and counter to any intuitive thought, general

secondary education is more profitable than vocational education. The reason is
that whereas general and vocational secondary school graduates have more-or-
less equal earnings after graduation, the vocational track of secondary schools

costs about twice that of the general track (Psacharopoulos and Loxley, 1985;
Psacharopoulos, 1987).
In many countries, the wage returns to academic qualifications are

significantly higher than the returns to vocational qualifications, government
training programs and adult skills training (Blundell, Dearden and Sianesi, 2005;
Dearden et al., 2002; Dickerson 2005; Carneiro and Heckman, 2003).

In a large World Bank follow-up study of students in the technical-
vocational curriculum stream of secondary education in Colombia and Tanzania,
it was found that the graduates did not seek or find employment in the sector

they studied. It was such finding that made the World Bank change its lending
portfolio as late as the 1990s away from secondary vocational schools, an
activity the institution had been engaged nearly exclusively since its inception

(Psacharopoulos, 1985).
Beyond the formal school system, a very robust research finding is that