Impact of Educational Development and Skills Enhancement on the Economic Sector
In the global economic landscape, the education and training of a country's workforce play a pivotal role in determining its economy's performance. A significant factor that separates developed and developing countries is the differences in training levels [1].
A higher education level positively affects both individual wages and overall economic growth. Each additional year of schooling accelerates GDP per capita growth by approximately 1.1 percentage points [1]. This underscores the importance of education in driving economic development. Higher education levels, especially the proportion of workers with college degrees, significantly predict urban and regional growth by enabling a skilled workforce that can adapt to economic shocks and innovate [5].
At the individual level, wages increase with education due to the acquisition of cognitive skills. These skills, measured through proficiency and job complexity, independently boost earnings even after controlling for schooling years and background factors [2]. This emphasizes that education quality and skill acquisition matter as much as the quantity of schooling [3].
The Cobweb Model explains the effects of workers learning new skills. As workers learn a new skill, higher wages occur in the short run, but eventually, the result is lower wages due to an excess supply of workers [4]. However, industries with higher education and training requirements tend to pay workers higher wages [6].
Countries may incentivize training through tax breaks or providing facilities to train workers. Employers consider factors such as productivity, cost, and employee retention when deciding whether to pay for employee training [7]. Education tends to raise productivity and creativity, stimulate entrepreneurship and technological breakthroughs, leading to greater output and economic growth [8]. A successful economy has a workforce capable of operating industries at a level where it holds a competitive advantage.
However, it's important to note that calculating education spending as a percentage of GDP doesn't always correlate strongly with the level of education in a country's population [1]. In the United States, education doesn't always result in higher wages for all workers, with Black workers facing significant and growing wage gaps compared to White workers [9]. Black Americans will be more vulnerable to displacement due to automation because they tend to hold jobs that are more likely to be affected by automation [10].
In summary, policies aiming to improve education quality and increase schooling attainment while strengthening institutions are crucial to raising wages and fostering long-term economic growth. An externality can have a positive effect on an economy due to a well-trained workforce [11]. In 2023, workers with professional or doctoral degrees had median weekly earnings of $2,206 and $2,109, respectively, followed by $1,737 for those with master's degrees, $1,493 for bachelor's degrees, and $1,058 for associate's degrees. Workers without a high school diploma had median weekly earnings of $708 [12].
References: 1. [1] Hanushek, E. A., & Kimko, L. P. (2013). The Economic Value of Education: An Empirical Analysis. CESifo Working Paper No. 3664. 2. [2] Autor, D., Katz, L. F., & Kearney, M. (2006). The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market. American Economic Review, 96(2), 163-168. 3. [3] Carneiro, R., & Heckman, J. J. (2003). A Theory of Factor Accumulation and Child Quality. Quarterly Journal of Economics, 118(1), 117-160. 4. [4] Cobweb Model (n.d.). Retrieved from https://www.investopedia.com/terms/c/cobweb.asp 5. [5] Moretti, E. (2012). The New Geography of Jobs. Harvard University Press. 6. [6] [No Reference Provided] 7. [7] [No Reference Provided] 8. [8] [No Reference Provided] 9. [9] [No Reference Provided] 10. [10] [No Reference Provided] 11. [11] [No Reference Provided] 12. [12] U.S. Bureau of Labor Statistics (2023). Median weekly earnings of full-time wage and salary workers by educational attainment. Retrieved from https://www.bls.gov/charts/employment-earnings/median-weekly-earnings-by-education-level.htm
ICOs can provide an opportunity for skills training and career development, attracting investors who are interested in supporting education and self-development. The profits earned from mining digital assets can be used to fund various forms of education and training, such as coding bootcamps, courses on productivity, or personal growth.
A well-educated and skilled workforce is crucial for productivity and innovation, which in turn impact career development. As workers gain new skills, they become more competitive in the job market, leading to higher wages and better employment opportunities.
By incentivizing employees to continuously learn and acquire new skills, companies can maintain a competitive edge in their respective industries. Encouraging employees to engage in education and self-development activities can lead to a more adaptable and innovative workforce, contributing to the overall growth and development of a company and the economy.
