Impact of the Duration of Compulsory Education on Economic Growth and Welfare

The human capital model from the basic economic theory considers schooling to be an investment in human capital, and thus the change to mandatory schooling forces the low-educated group to become more productive, raising its wages, with no effect on schooling decisions for others. This paper focuses on the important issue of economic theory approach to education and studies how the duration of compulsory education affects the economic growth and welfare. The economic theory predicts that by investing in education and supporting schooling, governments of developing and less developed countries can improve their labor force and enhance their economic growth and welfare. Our results show that educational policies can become the important tool for the developing countries for catching up with their wealthier counterparts. Therefore, public education policies such as the prolongation of compulsory education should be installed by the governments in less developed countries for improving the quality of their human capital and thence increasing the productivity and innovativeness of their economies. Thus, based on the findings from the economic theory, it would be beneficial for the policymakers in such countries to promote this approach for the sake and benefit of their economic growth and welfare.