Education And Economic Development‐The Canadian Case

This study assesses the relationship of education and economic growth, economic development and economic progress in aggregate, in structural and in micro‐economic terms on the basis of one hundred years of Canadian experience. Education is considered as a factor of input. The contribution made by knowledge resulting from additional education expands the capacity to produce, and increases the demand for goods and services and the desire for greater leisure. The dual function of education is stressed: the demand and supply effect. Education is examined both as a cause and a consequence of economic growth, economic development and economic progress, through its contribution to the quality of the labour force, earning capacity, both individual and national, productivity, the rate of economic growth and the character of economic development. The Canadian experience suggests that educational progress generally occurred in line with economic development during the first eight decades, with the real take‐off in educational advancement only occurring in the last two decades, when the nation reached the stage of technological maturity and high mass‐consumption. Among the reasons for the lower ratio of gross national product devoted to education in the first eight decades were the low priority attached to education, the emphasis on investment in physical capital because of its shorter pay‐off period than investment in human capital, and the heavy reliance on a substantial flow of immigrants who had obtained their education and training abroad. A distinct change occurred, however, in the last two decades, partly as a result of new technological challenges and partly as the result of changes in private and public attitudes, as the recognition of the rewards of education in terms of individual advancement and social progress led to a greater willingness to devote an increasing proportion of the nation's resources to investment in human capital, long pay‐off periods notwithstanding.