Having a college degree or any formal post-secondary education usually means getting a better job and earning a better salary. A higher education means better opportunities for individuals. But how does this impact overall economic growth?
Assessment studies based on surveys conducted in several countries recently released by Statistics Canada suggest that basic cognitive skills, such as reading comprehension, oral communication, problem solving, task planning and decision making, have a higher impact on economic growth than formal education.
Results from the international survey were presented at IDB headquarters by Scott Murray, Statistics Canada's general director for social and institutional statistics. The survey measures adult literacy, cognitive skills, and the use of information and communications technology.
The findings suggest that information and communications technology skills could be sources of policy interest, said Murray, adding that skills boosting the economy should be included and prioritized in educational systems.
Markets value cognitive and communications skills more than specific knowledge, stated Murray based on the studies. Thus, he suggested focusing on basic skills training, which can be used at all job levels and are fully portable: people carry them from one job to the next. Highly specific knowledge and skills are less versatile and do not travel well.
Average skill levels explain over 55 percent of GDP per capita growth between 1960 and 1995, according to the survey. The analysis also reveals that a 1 percent rise in average literacy will lead to a 1.5 percent increase in GDP per capita and a 2.5 percent rise in labor productivity.
In addition, there is a growing concern about the gap between the “haves” and the “have nots” in the digital era, where some people lack access to information and communications technology, while others benefit by using them, according to the computer literacy assessment criteria in the international survey. Murray highlighted the need for a comprehensive examination of computer use in the workplace, and in home and community settings.
Basic skills, particularly literacy and numeracy, also play an important role in the ability to acquire information and communications technology skills. The most difficult tasks in information and communications technology can be traced back to their cognitive demands, said Murray.
If more relevant, accurate and complete information were made available on this field, Murray concludes, policy makers and development planners could decide more effectively on how to build human capital. This type of assessment study, he adds, could help planning for an adequate skills supply to meet anticipated social and economic demands.
*This seminar was the sixth session in the discussion series on "The Knowledge Economy in Development: Towards Definition of Outcomes, Outputs and Indicators in Bank-funded Projects," which examines information and communications technology as a horizontal tool in support of the different development activities of the Bank.