Although that relationship will always be hard to quantify, the 1997 edition of the IDB report Economic and Social Progress in Latin America, due out in September, shows just how much of a return the region can expect from investments in education.

The report draws from several recent technical studies to calculate the effect on economic growth of increasing the average level of schooling of the region's workforce, which now stands at a comparatively low 5.3 years (4.9 years if adjusted for population).

"Latin America's potential growth rate could increase substantially during the next 10 years if the average educational level of the workforce was raised by one year (above current tendencies)," according to the report.

The report estimates that such an increase in educational achievement would raise the average potential growth rate for the next decade by a full percentage point. As shown by the chart below, that difference could translate into very substantial improvements in the average Latin American's earning power.

In microeconomic terms, education enables individuals to acquire general skills and assimilate information more efficiently. Educated workers are better able to adapt to changing production processes; they have better communication skills, which allow them to cooperate with co-workers in solving production problems.

Educated workers are consequently capable of taking on more complex manufacturing and service projects. They make better use of technology, become more productive, and ultimately add value to a country's economic output.