Hi, need to submit a 500 words essay on the topic Education for Economic Development.
The above investment would hand to hand with the necessities for development in most economic theories of development. According to Rostow’s theory, savings and capital formation are vital elements to successful goals of economic development (Smith 96). For a country to move through all the stages of development, a substantial part of GDP must be channel to saving which are used for investment. This is in line with the investment in education since it will lead to the formation of capital inform of human capital and hence, economic development. According to the Harrod Domar Model, the rate of economic development depends on two factors namely. savings (savings ratio) and productivity of investment (capital-output ratio). Investment in education will increase savings because education levels directly correlate with propensity to save. Skilled labor and human capital will lead to higher productivity of capital inputs. Therefore, an investment in the education sector will lead to positive development according to the Harrod Domar Model (Hanushek 611).