Sri Lanka : Investment in Human Capital
Education is one of the most important determinants of economic performance in the modern world. This is true of both countries and individuals. The main characteristic which distinguishes between advanced economies, middle-income economies and low...
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2014/05/19927371/sri-lanka-investment-human-capital http://hdl.handle.net/10986/20057 |
| Summary: | Education is one of the most important
determinants of economic performance in the modern world.
This is true of both countries and individuals. The main
characteristic which distinguishes between advanced
economies, middle-income economies and low-income countries,
is the knowledge content of their production activities and
processes. Economic activities and products have become
increasingly knowledge and skill-intensive in recent years.
In addition, the importance of knowledge and skills is
growing at an accelerating pace. Education is at the heart
of human capital accumulation and economic growth. Education
increases cognitive skills and soft skills of individuals.
In addition, education improves the capacity of individuals
to be trained for specific occupations and to acquire
job-related skills. These effects of education enable
individuals to accumulate human capital, improve labor
productivity and increase life-cycle earnings. In the
aggregate, this process generates economic growth.
Investment in education produces a broad range of social
benefits. Well-educated individuals, especially women, are
better able to control their fertility and family health,
resulting in reduced child, infant and maternal mortality,
and higher life expectancy. Education also facilitates
social mobility by creating opportunities for poor and
disadvantaged groups to raise their economic and social
status. A broad range of further externality benefits of
education have been identified in the economic literature.
These cover aspects of social well-being such as better
political decision making, reduced incidence of crime, and
higher quality public services. Education also produces
inter-generational economic and social benefits: increased
education in one generation improves schooling, labor
productivity and income in the next. The public goods,
informational imperfections and distributive justice aspects
of education provide the economic justification for state
investment in the education sector. |
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