The Impact of Science and Maths Education on Economic Growth

ACKNOWLEDGEMENTS First and foremost, I wish to express my gratitude to my entire family for their constant support, not only in the write-up of this dissertation, but also for the entire duration of my MSc studies. SECTION 1 INTRODUCTION The link between education and economic growth is an issue that has been investigated for decades. This is because education is essential for the build-up of human capital, which is one of the most essential prerequisites for productivity and growth. Capital can only be put to productive usage if it is combined with human capital. There is a vast literature that examines the contribution of education to growth. However, few studies exist on the benefits of maths and science education to the economy. The aim of this paper is to fill this gap. In doing so, I present an econometric analysis of the impact of science and maths education on productivity and growth. The rationale is that the modern economy of today is driven by technology. Technological breakthroughs through inventions have revolutionized the manufacturing, industrial and service sectors thus enhancing economic growth. To sustain these economies, high technology must be combined with the necessary skilled manpower to produce and operate them. This is where science and maths education is necessary. There must be a sufficient number of manpower skilled in these subjects to enable an economy to " realize the potential of technological change for bringing substantial and lasting benefits " to it (Greenspan 2001). Not surprisingly, countries such as the U.S.A 1 and the UK 2 have expressed concern on the dwindling number and performance of students in science and maths especially at the secondary level. This is because if fewer people were skilled in science 1 See Greenspan (2001). 2 See Green (2004) 2 and maths, then there could be negative implications on long-term growth, especially if the economy is heavily influenced by the manufacturing sector. Nelson and Phelps (1966) stressed that human capital should not be added simply as an additional input in the production process. Rather, human capital affects growth indirectly by giving rise to technological progress. This study aims to assess the impact of science and maths education on economic growth through its effect on technology. To explore this link, two models are employed. In the first model, cross sectional regressions are applied along the lines of Benhabib and Spiegel (1994) using data from the OECD …