Saturday, June 07, 2008

Dismal science, again

Constrained by work, I was unable to attend a roundtable discussion co-hosted by Kompas and Lingkar Muda Indonesia a few weeks ago. I forgot the exact topic -- it was something to celebrate the national awakening.

Through an old friend who attended the forum, I learned that my article three years ago was cited by another friend of mine. Not in a positive way, however, although neither did he directly criticize the facts I quoted in the article. Rather, he criticized the article for being too pessimistic (know what, education doesn't matter for growth!). Young people, he argued, aren't supposed to be that pessimistic. Well, this reminds me on how economist was tagged dismal science.

I wasn't there to clarify the main message of my article. These are what I would have said:
  1. If we define 'level of education' as 'share of population who complete a certain level of schooling (be it primary, secondary or tertiary), then, controlling for other factors, it couldn't explain the variations of growth across countries since the 1960. Some countries grew without big increases in education, but some countries failed to grow despite big increases in schooling rate.
  2. I didn't argue that education is not important (depends on how we define it). Nor did I argue that per capita economic growth is the only outcome variable we should see.
  3. We need to understand more on how education works in improving welfare. Increasing education level is not just about expanding the budget, but also how to make each Rupiah spent more effective.
  4. Also, be aware that increased level of education may increase inequality, at least in the short-run.
On being a 'pessimistic, young economist,' well, your honor and respectful jury, do you think I am guilty as charged?

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