IN recent years, a number of critics have questioned whether the quantity of schooling really is a driving force behind economic growth. Some argue that even though there might be a correlation between growth and school attainment, there may simply use portion of their wealth to buy more schooling. Others insist the estimated effects of education on growth are sensitive to the parameters of the underlying statistical analysis, and that it is difficult to distinguish among alternative estimates. Still others argue that the underlying model assumptions lead to very different implications about the schooling-growth relationship. Finally, some point out that the estimates of the effect of schooling on growth differ significantly from what would be expected from the highly positive microeconomic relationship between individual earnings and schooling-possibly reflecting the failure to use education in socially productive ways.

While these studies raise legitimate concerns, their message should not be misinterpreted. First, commonly available measures of school attainment are likely to be very imperfect measures of the human capital that is relevant to growth.

Several authors have shown that a number of the research anomalies disappear when measurement issues are dealt with. Moreover, these authors do not even directly address what is perhaps the most important measurement issue: variations in cognitive skills and measured quality that have been highlighted by recent tests show that the knowledge at a given level of schooling completion in some countries. These measurement problems are reinforced by simple recognition that qualitative skills reflect more than just formal schooling, including family input, cultural norms, health, and other factors.

Second, human capital is important, but it is not the only thing that governs the functioning of an economy. There is no question that basic features such as developed system of property rights, limits on the amount of governmental intrusion through taxes and regulations, and the openness of labor and product markets have an enormous impact. Pushing more school attainment on an economy unable to use it productively is unlikely to have positive effects.

What are the policy implications? Clearly, human capital can be built up by providing more schooling, but policies that fail to consider the quality of schooling risk expanding quantity without truly expanding human capital. Likewise, development policies that fail to take into account the overall structure of economy are likely to expand school attainment with little measurable improvement.
SHERWOOD CLARKE