Page 3 - Education and Inclusive Growth --Jong-Wha Lee Korea University

Education and Inclusive Growthc149

determinant of economic growth over the long run (Lucas, 1988; Mankiw,

Romer, and Weil, 1992). Education improves the efficiency of individual
workers, by enabling them to perform complex tasks and adapt to the evolving
needs of the production system. A pool of well-educated workers builds up the

nation’s innovative capabilities that help its economy to move up the value chain
and to produce more sophisticated, high-value products. In addition, the level
of educational attainment has a strong positive impact on social and political

outcomes, such as fertility, the education of children, democracy, and the rule of
law, which are major determinants for long-term economic performance (Barro
and Lee, 2015).

In recent decades, rising income inequality has attracted attention. In many
countries, alongside income growth, income inequality has increased (Piketty,
2014). In particular, many East Asian economies once praised as a “miracle of

“growth with equity, have also witnessed the deterioration of income distribution
in the past 10 years (Jain-Chandra et al., 2016; Lee and Lee, 2018).
Educational attainment embodied in a worker is a major determinant of
his or her lifetime earnings, and consequently affects the degree of income

inequality in a society. At household level, educational investment in children
is regarded as a major device to improve their future earnings. Public spending

on education is believed as a highly effective tool for reducing educational
inequality and consequently making income distribution more equal.
The purpose of this study is to assess quantitatively the role of education in
income growth and distribution across economies in the long run. Although the

importance of education is well-acknowledged by the public and policymakers,
the effects that education have for income growth and distribution across the

population over long periods of time is not always clear in empirical studies.
This is largely because identifying the exact contribution of education to