Failed twice: weak learning in school, few skills learned on the job

Education is one of the most powerful drivers of growth and poverty reduction. Around two-thirds of the income gap between high-income and low- and middle-income countries can be accounted for by differences in human capital, and about a third of the reduction in extreme poverty since 1980 can be traced to more years of schooling.

So what does the data from our recent Atlas of Global Development show? Here are some highlights worth diving into: 

Schooling is one of the best investments a country can make

Few economic policies consistently yield double-digit returns at scale. Education is one that can. Each additional year of schooling raises earnings by about 10 percent. This holds across low-, middle-, and high-income countries.

The costs are modest relative to the gains. In Sub-Saharan Africa, public spending averages about $283 per child per year of schooling. Measured against average annual earnings over a 40-year career, the lifetime gains from a single additional year of schooling are roughly ten times that upfront cost.

Failure 1: More kids are in school, but many aren't learning

Enrollment has risen almost everywhere. In low-income countries, the odds of completing secondary school rose from around 50 percent in 2000 to 70 percent in 2020. But rising enrollment is only part of the story.

Those gains look less impressive after accounting for how much is actually learned in the classroom. For the average country, learning-adjusted years of schooling are only two-thirds as high as unadjusted years. And in about a third of low- and lower-middle-income countries, learning-adjusted schooling has actually fallen, even as enrollment has generally risen.

For these students, school is the first place they fall behind. In principle, the workplace could help them catch up, but for many, it's where they fall behind a second time.

Failure 2: Skills continue to grow at work, but many are in jobs where this doesn’t happen

At least 25 percent of the skills people use in their careers are built on the job. Education and experience reinforce each other: better-educated workers start with higher earnings, and their earnings also grow faster over time.

In Brazil, workers with a tertiary degree start out earning 2.5 times more than those without primary education. By the end of their careers, they earn more than six times as much than the workers with less than primary. One reason is that more-educated workers are more likely to have jobs where learning continues. 

Nearly 70 percent of workers in low- and middle-income countries are in farming, self-employment, or micro-firms, where opportunities to build new skills are often limited. This leaves those who already learned the least in school with the fewest chances to catch up.

Schooling is essential, but it is not enough. Too many are failed twice: first in the classroom, then at work. Skills are shaped at home, in neighborhoods, and on the job. To boost human capital, we need progress across all three.

Read the full chapter in the Atlas of Global Development.