Education and Economic Development: A Review of Literature

This is a review paper on the impact of education on economic development. From the literature review undertaken, it is clear that the contribution of education to economic development may be positive, negative or nothing. There are three distinctive ways of determining contribution of education to economic development: (a) rate of return analysis: education is an investment which enhances productivity and yield monetary and non-monetary returns; (b) human resource approach: through education future needs workers might be met to attain economic development; and (c) education and economic growth analyses: education has got a major multiplier role in economic analysis growth. There is lack of research on the impact / contribution of education on the economic development of the country. Whatever small amount of research projects are available on it in India; they are unable to convince our policymakers to invest in the education sector. Therefore, there is a need for research on the contribution of education to the economic development of India and convince our policymakers to increase the public spending on education – elementary, secondary and higher education and education research.