The Impact of Education on Economic Development
11:23:50 2025-07-08 64

An old Chinese proverb says:
“If you want a harvest in one year, plant wheat. If you want a harvest in ten years, plant a tree. But if you want a harvest that lasts a hundred years, educate the people. The grain you plant once, you harvest once. The tree you plant, you can cut down ten times. But if you educate the people, you will reap the benefits for a hundred years.”

It is well known that education causes a comprehensive transformation in the personality of the learner. Since human beings are the cornerstone, objective, and instrument of development, the changes education brings to a person's character are too vast to be measured by numbers. The benefits are not purely economic; rather, education enhances the quality of life as a whole.

Education has many indirect benefits:
It is the most reliable driver of growth, the catalyst for changing attitudes, and the source of confidence in transformation. Education encourages participation in political life, helps people choose the good from the new, discard the bad from the old, and raises awareness of new ideas and options for organizing life.

One economist described the development gap between the United States and Europe as primarily an educational gap before being a technological one. Europe is weak educationally, and this weakness fundamentally hinders its growth — not just in general education and technical training, but most significantly in administrative education.

Many people view education as a luxury or a symbol of prestige. Many Islamic countries still classify education as a non-productive sector, which has led them to cut its funding during times of crisis and redirect it elsewhere.

The worsening phenomenon of educated unemployment has led many parents in several countries to withdraw their children from school before completing primary or middle school, thinking this would benefit them. This is clearly incorrect economically, and from a civilizational standpoint, it’s a tragedy. Pulling a child out of school at this stage renders them unfit to participate meaningfully in a world that demands open minds and diverse, high-level skills.

Numerous studies confirm that investment in education by states and individuals yields high financial and developmental returns, surpassing those from agricultural or industrial projects. Some key findings:

  1. Education is the best method for nations to compensate for a lack of natural resources. Through knowledge and training, a country can become a global center for services, manufacturing, and advanced sectors like radiology, remote control, electronics, information technology, and genetic engineering — fields that rely on human capital rather than raw materials.
    Today, many countries with limited space and resources enjoy very high per capita incomes. For example:
    • Japan’s per capita income exceeds $21,000
    • Singapore’s exceeds $10,000
    • The annual share per Jewish child in occupied Palestine is around $14,500

In contrast, some countries sit atop vast mineral wealth yet suffer near-starvation — proving that possessing wealth is not enough. What matters is learning, training, and having the systems and technologies to use that wealth effectively.

  1. World Bank studies show that raising the educational level of the workforce by allowing just one additional year of schooling can boost GDP by 9%. Other studies indicate that four years of schooling can increase agricultural productivity by 10%.

A wage comparison study between educated and uneducated individuals found:

    • At age 13, those with qualifications earn 157% more than those without.
    • At age 26, in formal jobs, they earn 110% more monthly than unqualified peers.
  1. Many studies have calculated the return on investment in education:
    • Recovering education-related costs typically takes 9 to 10 years,
    • Whereas natural resource development loans require 12 to 18 years to be recouped,
    • And land reclamation projects may not pay off for 15 to 18 years.

This suggests that borrowing for a child’s education is not risky, and that student loan funds are essential and should not be ignored or delayed.

  1. American states have undergone many studies about how education contributed to their transformation from agriculture-based economies to industrial powerhouses.
    Economist Denison found that 21% of U.S. economic growth from 1921 to 1957 was due to education.
    Solow’s studies showed that from 1900 to 1960, material capital, population growth, and natural resources accounted for only 10% of economic growth. The remaining 90% came from human factors — primarily education and training.

At the start of the 20th century, 90% of Americans worked in agriculture. By 1963, this number fell to under 10%. Yet, agricultural output rose dramatically, thanks to scientific and technological advances.

The impact of education on people’s lives is hard to measure precisely. But all these studies and figures point to one thing: Education strengthens civilization and enhances quality of life.

Education — in all its branches, specializations, and levels — is a fundamental pillar of civilizational development. Yet, as important as it is, education alone cannot transform societies. It must interact with cultural roots, living conditions, and political realities — much like how chemical elements interact to produce results.
Thus, two seemingly identical institutions may have vastly different effects due to the contexts of their societies. This confirms that comprehensive reform is needed to revive education and, in turn, everything else.

 

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