Higher studies lead to growth

February 21, 2003

Universities in developing countries are struggling to meet increasing demands for higher education, according to a joint report from Unesco and the Organisation for Economic Cooperation and Development.

Policy-makers face tough choices because of the higher costs associated with university education. In Brazil, where the cost per student of higher education is 1,200 per cent greater than in secondary education, the dilemma is whether to fund one more university student or to expand access to secondary-level education for 12 young people.

But the report concludes that the effort is worthwhile because of the impact of human capital, which could have accounted for about a half a percentage point in the annual growth rates of 16 emerging economies over the past 20 years. This is more than anywhere in the developed world except for Greece, Ireland, Italy and Spain.

For Argentina, Chile, Malaysia and Uruguay in particular, high levels of secondary and tertiary attainment were vital in translating human capital into steady growth, the study says.

The study analyses the link between the level of education and economic growth in 16 of the countries taking part in the Unesco/OECD World Education Indicators programme (WEI). Better-educated people fare much better on the labour market. In Indonesia, a man with tertiary education earns 82 per cent more on average than a man with secondary qualifications only.

"Issues of access should be considered relatively more important in countries with high levels of disparities. Low-income families cannot afford higher studies for their children because of the rising cost of such studies and the difficulty experienced by states in investing further," the report says.

While graduation rates in the Russian Federation reach the OECD benchmark of about per cent of the relevant age range, Brazil, China and Tunisia struggle to reach 10 per cent.

Many WEI countries have programmes designed to improve equity in access to higher education, but there are no significant grants in Argentina, Peru, Uruguay and India. In Indonesia, 10 per cent of students receive negligible scholarships of 60,000-75,000 rupiah (£4.20-£5.26) each.

Private contributions and private providers are more prominent in WEI countries than in most OECD countries because governments are unable to cope with the costs. "As the role of private sources is becoming more important in the funding of education, attention is needed to ensure that this balance does not shift so far as to keep potential learners away from education," the report says.

Financing Education - Investments and Returns, Analysis of the World Education Indicators 2002 Edition. Unesco/OECD, Paris, 2002.

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