School GDP – Newspaper Kommersant No. 162 (7363) of 09/05/2022

A greater effect for the economy of the Russian Federation can bring public investment not in higher education, but in secondary education – such a conclusion can be drawn from the study “Public Spending on Education and Economic Growth: Cross-Country Analysis” of the Department of Applied Economics, Faculty of Economic Sciences, Higher School of Economics (HSE). The work was based on World Bank data for 91 countries.

As the authors of the work note, initially economic science proceeded from the thesis of a direct relationship between investment in human capital and the growth of the country’s GDP. However, as different forms of education become more widespread and the gap between poor and rich countries widens, it has been suggested that the correlation may be more complex. Calculations based on WB data for OECD countries showed that for them a positive relationship between spending on education and per capita GDP still exists. For developing countries, the results are more controversial. While there is a positive relationship between spending on primary education and GDP per capita, there is a negative relationship between this indicator and spending on secondary and vocational education.

This, according to the authors of the work, is explained by the fact that in countries where a significant part of the population is illiterate, it is the spending on primary education that is of decisive importance. Spending on higher levels of education turns out to be counterproductive, as there are not enough high-paying jobs for the trained population, as a result, there is a “brain drain” to developed countries, which, in turn, slows down economic growth in developing countries.

The HSE notes that although the Russian Federation cannot be attributed to countries in which investments in primary education could bring the greatest effect (due to universal literacy), it can be assumed that investments in secondary education, rather than higher education due to the relatively small number of high-performance jobs. It should be noted that, according to the HSE statistical collection “Education in Numbers”, expenditures on university students in the Russian Federation are almost three times higher than those for students of vocational schools (see graph).

Anastasia Manuylova